The ‘no more favourable treatment’ clause is a concept used within the Paris MoU to ensure that, even when a flag state chooses not to ratify a convention (bring it into law in their country), their ships will still be expected to achieve substantial compliance to the regulations, ensuring that the standards of international shipping are maintained.
“The ‘no more favourable treatment’ concept is the absolute building block to safe shipping around the world,” explains Dick Welsh, director of the Isle of Man Ship Registry. “Otherwise you could have flag states circumventing conventions all around the world.”
The concept also reduces the risk of owners and vessels ‘flag shopping’ for the most lenient application of the regulations. For example, should France ratify a new International Maritime Organisation (IMO) convention, then all vessels visiting French waters are subject to that convention, regardless of whether the vessel’s flag state has also ratified the convention.
“One very good recent example of this concept in action in the merchant world is the Ballast Water Management Convention,” says Welsh. “Nobody wants the convention as it will be very expensive for builders to fit the equipment. But once it is ratified, those countries that haven’t signed up will still have to comply because of the ‘no more favourable treatment’ clause.”
But how does the concept apply to superyachts? “All standard conventions apply to superyachts in some form,” explains Welsh. This is where it is important to understand ‘unilateral interpretations of regulations’: the concept of a flag state choosing to interpret a regulation in a certain way and not informing the shipping community through the proper channels at the IMO.
“The ‘no more favourable treatment’ concept is the absolute building block to safe shipping around the world.”
“What this means for the superyacht industry is choosing to register a vessel with a flag that is more leniently applying the regulations is not going to be of benefit when the Paris MOU is inspecting yachts against the regulations to their full extent,” says Jo Assael, lead surveyor at Cayman Registry. “This will lead to an increase in detentions and fines when choosing to operate in this way.”
Trusted Flag States will have developed robust industry recognised standards, or written interpretations, in the form of the Large Yacht Code and the Passenger Yacht Code, which are lodged with the IMO. This ensures that all interpretations are within the scope of the original conventions and correctly documented and approved with the IMO where necessary.
“Vessels and operators should be cautious of the easy fix and being told ‘yes’ by their flag with little or no documentation to back it up,” advises Assael. “Managers and crew should ensure that non-compliances to international conventions are properly documented and insist on them including evidence of the powers under which the flag has issued the dispensation.”
Without these, the flag may be making ‘unilateral interpretations of regulations’, which, although often met with gratitude by the owners, will not be so when the vessel is detained and or fined under ‘no more favourable treatment’.
If you've found this story to be 'a report worth reading', and you would like to enjoy access to even more articles, insight and information from The Superyacht Group, then you may well be interested in our VIP print subscription offer. We are inviting industry VIPs to register for a complimentary subscription to our print portfolio, which includes the most insightful information on the state of the superyacht market. To see if you qualify for our VIP subscription package, please click here to fill in an application form