The British Virgin Islands (BVI) is currently a tax neutral Category 2 Red Ensign port of British Registry operating under the authority of the Merchant Shipping Act, 2001. In May of 2005, the BVI government took a significant step in realising its aim of achieving Category 1 vessel registration status. Subsidiary legislation designed to complement the Merchant Shipping Act, 2001, in the form of the Merchant Shipping (Adoption of United Kingdom Enactments) Order, 2005, took effect on 26 May 2005. The effect of this statutory instrument was to adopt United Kingdom legislation in the context of merchant shipping, subject to relevant modifications. The adopted enactments included 5 United Kingdom Acts, 189 pieces of subordinate legislation and 3 statutory codes of practice to govern and/or regulate, inter alia, marine safety and security, carriage of goods, administrative matters, crew generally (including, crew accommodation), carriage of dangerous goods, diving and submersibles, fire prevention and protection, high speed craft, lifesaving, load lines, marine pollution, navigation and collision, occupational health and safety, radio and navigational equipment, vessel construction and equipment, tonnage, oil recovery operations and small vessel safety. This development paved the way for the BVI’s move to Category 1 registration status by solidifying the statutory framework under which its merchant shipping regulatory regime operates, thus forming a robust legislative platform from which to deal effectively with, and facilitate, the impending change.

The change in the BVI’s vessel registration status from Category 2 to Category 1 is imminent. To this end, the BVI government launched the Virgin Islands Shipping Registry (VISR) in 2006. VISR was created out of a merger of the Shipping Registry Division of the BVI Financial Services Commission with the Marine Services Unit of the Ministry of Communication and Works, and represents the fulfilment of one of the final conditions required for the territory to operate as Category 1 Shipping Registry within the Red Ensign Group. The consolidation of the two marine-related regulatory bodies of Government into VISR, and the fact that VISR falls administratively under the authority of the Chief Minister’s office, are testament to the BVI government’s commitment to the achievement of Category 1 status for the territory. Under its 2003-2007 legislative agenda, the BVI government pledged to devote the resources necessary to create the infrastructure required for the change in status, and it is anticipated that the new status will officially be launched before the end of this year.

A change of registration status to Category 1 would lift the current tonnage restrictions on vessels that may be registered under the BVI flag, and open the territory to a world of new possibilities in the merchant shipping arena benefiting, among others, owners, financiers and crew of BVI registered vessels. The BVI will join the ranks of Bermuda, the Cayman Islands, Gibraltar, Isle of Man and the United Kingdom once the new status has been formally conferred.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Johann E. Henry
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