Global Electronic Communications Speed Ship Financing Process
The maintenance of an orderly regime for financing the construction,. purchase and operation of ships is a prime function of flag states, but it is a process which has begun to change because of the application of global electronic communications, as well as a more flexible legal approach to ship registration. With the exception of a small core of specialists, the technical procedures of ship registration and the recording of mortgages are gene ally not well known. They can " very burdensome, as a scrutiny the Norwegian or Japanese sh sale forms, or a Memorandum Agreement (MOA) will indicat The legal and technical snares ship and mortgage registration a brought into play by the need expeditiously secure the financi rights of those parties with interest in the transaction. Ship registries offer the on internationally recognized syste for securing a loan by means recording a mortgage, using t vessel itself as collateral. Su financings follow forms prescrib by the national law of the ship re istry, with mortgages, bills of sa and other recordable instrumen conforming to the 1993 Conventi on Maritime Liens and Mortgage An earlier international agre ment dating from 1926, states th the mortgage must be "register ... in a public register at the port registry of the vessel or at a centr office." This usually requires a tr ditional form of legal proceduknown as a closing. The nature this will be governed by the complexity of the transaction, th degree of preparation, and th legal systems of the registri involved. A bad closing can co sume considerable additional ti and money, as well as participant Each ship delivery brings with its own rigorous commercial an financial deadlines. This has led a demand for virtually consta access to recordation and regist facilities, for the sake of efficien and to eliminate unnecessar expense. This demand is growin along with the industry's need fi the large sums that are being, an will be, advanced to replace th world's aging tonnage. The Worl Bank estimates that approximat ly $350 billion or more will required by the year 2000.