KYIV. Jan 18 (Interfax-Ukraine) – Ukraine’s Verkhovna Rada has passed at first reading a bill amending the Merchant Shipping Code of Ukraine. The document would contribute to development of ship navigation in Ukraine and cargo shipment by rivers.
A total of 234 lawmakers backed bill No. 2712 on Tuesday.
The document is intended to provide for government support of ship navigation, expansion of tonnage of the navy under the flag of Ukraine, attraction of investment in the navigation business and help to improve investment climate in the country.
According to an explanatory note to the bill, the Merchant Shipping Code of Ukraine was approved in 1995. After analyzing its provisions it was established that some of them have become out of date and not efficient. They do not suit the economic develop and do not help to develop ship navigation in the country.
According to Article 32 of the Code, the right of navigation under the state flag of Ukraine is given to a vessel being the state property or in the ownership of a person who is citizen of Ukraine, or resident company. Article 131 sets a restriction for coastwise transportation for vessels under foreign flags. They can navigate between ports of Ukraine only if they have permits from Ukraine’s Infrastructure Ministry.
“It is clear that the current requirements create a serious obstacle not only for attracting foreign investors to the Ukrainian ship navigation market, but also for ship owners who often are interested in full or partial attraction of foreign partners,” reads the explanatory note.
In practice the above-mentioned restrictions result in bringing the navigation market to the shadows, as ship owners have to select flags of the states for their ships that have more flexible legislation. This creates additional difficulties for ship owners and affects the Ukrainian economy in general, as this is the outflow of money outside the country.
According to the note, from year to year the number of ships under the flag of Ukraine is falling. In 1991 there were 375 ships with deadweight of 5,000 tonnes and more, in 2000 – 155, 2005 – 91, 2008 – 75, 2012 – 60 and 2014 – 46, while over 200 medium and large ships belonged to Ukrainian companies are operating under foreign flags.
The adoption of the bill would help to settle the issue of providing the right to navigate under the flag of Ukraine to ships that belonged to companies created with the participation of foreign capital. The bill would permit coastwise transportation to foreign ships. These steps would help to attract foreign investment to the development of ship navigation in Ukraine.
