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) con - tinues 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 (Con - gress) 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 inter - national commercial shipping. These modifica - tions, as described below, represent a significant turn in the direction of efficiency and moderni - sation of the ship registration business and the worldwide maritime industry. The following sec - tions of the RMI Maritime Act were amended. Section 119 The section represents a significant modifica - tion to the law detailing adoption of provisions to permit the electronic filing of documentation to effect the registration of RMI flag ships. This includes filing of documents 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 flexibil - ity and the ability to accept manual, electronic and digital signatures. This amendment gives users of the RMI registry the ability to electroni - cally submit instruments and documents to the RMI Maritime Administrator. Therefore, it no longer was necessary to send physical original executed documents to the RMI Administrator. 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 Signa - ture Regulations, 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 docu - mentation 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 meaning of “electronic transmitted signature” in Section 3, which provides that, “for the avoid - ance of doubt, “electronically transmitted signa - ture” as used in the Associations Law 1 includes a digital signature. “Digital 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 software using a digital certificate issued by a Trust Ser - vice Provider or similar authority.” It is now set - tled that signing documents with software such as Adobe and DocuSign is now recognised under the Digital Regulation. Section 302 The amendment contains additional word - ing which now clarifies that a mortgagor may execute a mortgage 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 provision that it shall only become valid and effective upon its recor - dation. The modification makes it clear that a predated properly executed and acknowledged mortgage 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 trans - actions, specifically in the case of sale and pur -
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