MARSHALL ISLANDS Trends and Developments Contributed by: Brad L. Berman, Berman Legal LLC
Current Developments in Shipping Law in the Marshall Islands The Republic of the Marshall Islands (RMI) contin - ues to be at the forefront of international ship and corporate registries with one of the largest white flag administrations with all international port state control regimes. Most importantly the jurisdiction is a leader for use by publicly traded shipping companies. With effect from 10 April 2023, the Nitijela (Congress) approved significant changes to the RMI Maritime Act with adoption of the Preferred Ship Mortgage and Maritime Liens Act, to reflect the expanded role of flag state legislation in international commercial shipping. These modifications, as described below, represent a significant turn in the direction of efficiency and mod - ernisation of the ship registration business and the worldwide maritime industry. The following sections of the RMI Maritime Act were amended. Section 119 The section represents a significant modification to the law detailing adoption of provisions to permit the electronic filing of documentation to effect the regis - tration of RMI flag ships. This includes filing of docu - ments such as bill of sale, mortgage deed or mortgage discharge which can now be accepted for filing by the Marshall Islands ships registry via electronic means. The expanded statutory language permitted flexibility and the ability to accept manual, electronic and digital signatures. This amendment gives users of the RMI registry the ability to electronically submit instruments and documents to the RMI Maritime Administrator. Therefore, it no longer was necessary to send physical original executed documents to the RMI Administra - tor. This change further brought the MI registry into the digital age permitting the submission of a single electronic or digital copy. In furtherance of this new provision, the Republic of the Marshall Islands passed the Digital Signature Reg - ulations, 2024 (the “Digital Regulation”), which came into effect on 15 February 2024. The new legislation goes to show the Marshall Islands’ commitment to a fully digitalised documentation process with the aim of fast-tracking transactions and removing bottlenecks in the registration of RMI flag ships.
The Digital Regulation made clarification to the mean - ing of “electronic transmitted signature” in Section 3, which provides that, “for the avoidance of doubt, ”electronically transmitted signature” as used in the Associations Law 1 includes a digital signature. “Digi - tal signature” means a signature that is attached to a document by a person with the intent to sign the document where the signature is generated by soft - ware using a digital certificate issued by a Trust Ser - vice Provider or similar authority.” It is now settled that signing documents with software such as Adobe and DocuSign is now recognised under the Digital The amendment contains additional wording which now clarifies that a mortgagor may execute a mort - gage prior to its filing date even though at that point of time, the mortgagor does not yet hold the title to the vessel, provided that the mortgage contains a provi - sion that it shall only become valid and effective upon its recordation. The modification makes it clear that a predated properly executed and acknowledged mort - gage can be legitimate and effective upon recording. Additionally, the updated section guarantees that only instruments that satisfy all recording requirements will be allowed, with careful documentation of the date and time of recording. This change will surely assist in transactions, specifically in the case of sale and purchase of a second-hand tonnage or taking delivery of a newbuild where the new owner or the buyer needs to secure the relating financing by way of a mortgage over the purchased vessel. Section 304 If a vessel is subject to a validly recorded ship mort - gage, it has never been possible for the Maritime Administrator to delete her from the Register unless she has been lost, destroyed or transferred to another registry following a court sale. The Maritime Adminis - trator is always required to notify the mortgagee prior to deleting the vessel in this case. The amendment to Section 304, grants the RMI Administrator the author - ity to immediately strike and withdraw the ability for a shipowner to fly the MI flag, if its vessel is engaged in illegal activity or actions against the interests of the RMI. The amendment seeks to provide the Maritime Administrator with a discretion to immediately strike Regulation. Section 302
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