Flag of Liberia confronts maritime industry's 'flags of convenience' practice
Liberian Ship Registry Challenges "Flags of Convenience" Label and Proposes New Classifications
The Liberian Ship Registry, a high-quality, U.S.-managed international open registry, has taken a stand against the broad "flags of convenience" (FOC) label, arguing that it unfairly lumps reputable registries together with poorly managed or "sham" registries.
In response to the Federal Maritime Commission's (FMC) flag registry fraud investigation and the broader criticism of FOCs, the Liberian Ship Registry and similar reputable registries propose new categories or classifications of ship registries to better reflect varying levels of compliance, governance, and legitimacy.
The FMC's 2025 investigation lumped different registries together despite notable differences in regulatory oversight, safety, and labor standards among them. The Liberian registry emphasizes that it operates under rigorous standards and is not responsible for the fraudulent or illicit activities found in the so-called "shadow fleet" flagged under other registries.
The proposed new categories aim to separate well-managed international open registries, such as Liberia and the Marshall Islands, from those with inadequate oversight or engaged in fraudulent registrations. The goal is to encourage recognition of quality flag states that maintain strict regulatory control, environmental standards, and labor protections, rather than condemning all open registries under a single pejorative term.
The Liberian Registry argues that regulatory scrutiny should be refined to focus on problematic registries, rather than treating all foreign-flagged ships as a uniform category. This nuanced view highlights that some registries provide valuable services to shipowners with institutional credibility and compliance, differentiating them from "flags of convenience" in the traditional, negative sense.
The Liberian Ship Registry has suggested several measures to improve regulatory oversight, including the creation of an office in the U.S. that can coordinate with government agencies, such as the Coast Guard and the Treasury Department. They also recommend becoming a signatory member of the Registry Information Sharing Compact and the use of Long Range Identification and Tracking and Automatic Identification System data in their sanctions compliance assessment of vessels.
The Liberian Flag, along with the Marshall Islands Flag, continues to outperform many national flags on a quality basis. The Paris MoU, a cooperative of 27 countries mainly in Europe, consistently "white-lists" the Liberian Flag's ships, demonstrating Liberia's performance as a high-quality flag state. The Liberian Flag has achieved the Coast Guard's annual "Qualship 21" designation for highest performing flag states nine times between 2011 and 2024, although it will be ineligible for Qualship 21 status through June 30, 2026.
The Liberian Flag recommends a categorization of flag states as International Flag, National Flag, and Flags of Non-Compliance (FONCs). Flags of Non-Compliance are flag states that disregard national and international laws, standards, norms, and responsibilities. The Paris MoU currently has 13 national-flag vessels on its "grey list".
In summary, the Liberian Ship Registry's position seeks to align regulatory and industry perspectives on flag state governance while addressing the concerns raised by the FMC's investigation. The registry argues for a more nuanced approach to the "flags of convenience" term, recognizing that some registries, like Liberia, provide high-quality services and should not be lumped together with those that have poor standards and engage in fraudulent activities.
- The Liberian Ship Registry, along with other reputable international registries, is advocating for new classifications in the finance, transportation, and aerospace industries, as they believe the current broad "flags of convenience" label is unfair and lumps them together with poorly managed or "sham" registries.
- In an effort to encourage recognition of quality flag states that maintain strict regulatory control, environmental standards, and labor protections, the proposed new classifications aim to separate well-managed registries, such as the Liberian and Marshall Islands, from those with inadequate oversight or engaged in fraudulent registrations in the finance, transportation, and aerospace sectors.
