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  • Mayank Jain and Varun Agrawal

The Genuine Link Conundrum

This article is authored by Mayank Jain and Varun Agrawal, Students of Law, BA. LL.B (Hons.) at Jindal Global Law School.


Introduction

In a world where seaway is the most preferred route for international trade, it is important to ensure the safety of vessels on the high seas. Here, the concept of the nationality of ships and the consequent flag State jurisdiction acts as the main catalyst for the maintenance of order on international waters. Art. 91 of the United Nations Convention on the Law of the Sea (UNCLOS) and Art. 5 of the Convention on the High Seas states the requirement for States, as per their national legislations, to elaborate the conditions necessary for the grant of its nationality to ships, and for the right to fly its flag. However, this provision also contemplates a limitation, i.e., the requirement of a genuine link between a State and the ship which flies its flag. However, the term ‘genuine link’ is not defined in either of the Conventions. This lack of definition leads to ambiguous interpretations which, in turn, complicates the enforceability of the flag State regime on the high seas.


Furthermore, with the advent of open registries and the Flag of Convenience (FoC) - the positioning of the requirement of genuine link gets further convoluted in the context of international maritime law. Therefore, from a policy perspective, there is a need to reimagine the meaning and role of the concept of ‘genuine link’ in the flag State jurisdiction regime to tackle these newfound issues, which the current regime falls short to address. This piece tasks itself with the same objective.


Current understanding of the term – Genuine Link

Out of the limited number of cases in International Courts and Tribunals, that have discussed the issue of genuine link, the M/V Saigacase is of considerable importance. Here, the International Tribunal for the Law of the Sea (ITLOS) held that the purpose of ‘genuine link’ is only ‘to secure more effective imple­mentation of the duties of the flag State, and not to establish criteria by reference to which the validity of the registration of ships of a flag State may be challenged by other States’. In other words, the Tribunal observed that the existence of a genuine link was not relevant to the question of the nationality of a ship but only for the exercise of the effective flag State jurisdiction. The grant of nationality was a question within the ‘exclusive jurisdiction’ of a State and not a question to be decided in international courts.


However, this interpretation is difficult to accept, given that the requirement of a genuine link is mentioned in Article 91 of UNCLOS which deals with the nationality of ships, and not under Article 94 dealing with the exercise of effective flag State control over the ship. This position was continued in several later judgements by the European Court of Justices and thus, is open to the same criticism and comments.


Genuine Link as a Pre-condition

Given that genuine link does not have established meaning in international law, using general rules of interpretation under Article 31 of the Vienna Convention on the Law of Treaties (VCLT) to interpret the meaning of the term becomes redundant, at best uncertain. In light of this uncertainty, it becomes pertinent to employ the supplementary sources of interpretation stated under Article 32 VCLT - the preparatory work of the treaty (travaux preparatoires) and the circumstances of its conclusion- to ascertain genuine link as a pre-condition.


However, the travaux preparatoires of UNCLOS shed very little light on the meaning of the term ‘genuine link’ as it had no draft articles or body of experts to decide upon the provisions. Therefore, one can instead make use of the travaux preparatoires of theGeneva High Seas Convention 1958, where the phrase ‘genuine link’ was in fact first codified and subsequently repeated in Article 91 UNCLOS. Here, during the ILC discussions, the requirement for a minimum set of conditions to ensure the effective exercise of jurisdiction over the ship was emphasised. The Commission suggested that the nationality of the crew members or the ownership of the ship by the State should be a criterion to ensure some link between the ship and the State at the time of registration. However, many States objected to this fixed and specific set of conditions for the registration of ships given the variance in State practices and apprehensions pertaining to open market economy principles.

Considering this, the Netherlands, instead, proposed the use of the phrase ‘genuine link’ between the State and the ship as a general formula for deciding on the ship’s nationality which received wide acceptance. This proposal came in light of the Nottebohn case, where the International Court of Justice (ICJ) held that the recognition of the nationality of an individual by other States is contingent upon a ‘genuine connection’- a legal bond having in a social fact of attachment between the individual and the State whose nationality it is claiming.


Therefore, the drafters intended to use a ‘genuine link’ as a precondition to the registration process of a ship. However, the phrase in the Article regarding the same (‘genuine linkfor purposes of recognition of the national character of the ship by other States’) was deleted in the final draft due to the vague nature of the term ‘genuine link’ and hence, it never got codified. At the same time, various State parties to the Convention agreed to further develop and elaborate the concept of ‘genuine link’ on a subsequent occasion. This occasion came in 1986, with the drafting of the United Nations Convention on Conditions for the Registration of Ships, whose provisions try to strengthen the ‘genuine link’ requirement by adding criteria of the nationality of manning staff and ownership of the ship. The Convention has still not come into force, showing the reluctance of various nations to create a system where there is a proper link between the ship and the flag State.


The FoC Menace

FoC refers to a practice whereby vessels carry the flag of a sovereign state that is different from the State of origin of the owners. The reason for adopting this common practice is mostly to evade regulations and escape administrative fees. States like - Panama, Liberia, and the Marshall Islands are said to have the most ships registered under their name which allows the owners to easily avoid liabilities.


Ghana’s 2002 Fisheries Act aimed at securing the fishing benefits solely for its nationals, whereby it banned foreign ownership in the trawl sector. Only Ghanaian nationals were allowed to operate and consequently, this ‘nationality criteria’; underpinned by the said Act was able to somewhere meet the ‘genuine link’ requirement as postulated in Art. 91 UNCLOS. However, the said legislation failed to prohibit ‘fronts’ and ‘shells’ operating in Ghana. An investigation by China Dialogue has found that nearly seventeen trawlers belonging to local companies, acting as ‘fronts’ for the Chinese State enterprise, Dalian Mengxin Ocean Fisheries are registered under the Ghanaian flag. This organisation has committed multiple illegal fishing offences, however, the Ghanian sanctions are only applicable to the registered owners, i.e., the local companies, and not the beneficial owners, i.e., the Mengxin enterprise. Resultantly, despite repeated violations, Mengxin was able to renew its licenses and usurp the benefits that were secured for the Ghanaian nationals due to the practice of FoC.


If the ‘genuine link’ requirement is seen only as a duty for the effective control and jurisdiction of the vessel and not a pre-condition while granting a ship its flag, the menace of flag hopping will never be curbed. Various instances such as that of violations by the Wisdom Seafarer have highlighted the problem of flag hopping. This vessel was originally flying the flag of Honduras and when the State began legal proceedings against the vessel, the Fearer changed its flag to Bolivia, Moldova, etc., due to which enforcement proceedings were delayed. All these issues have arisen merely because of the lack of a condition stipulating a ‘genuine link’ while exercising FoC,


Since there exists no ‘genuine link’ between the shipping vessel and the State that grants its flag as mentioned in Art. 91 UNCLOS, such States are conveniently able to shrug off any legal responsibility. Recently, the British Royal Marines impounded a vessel, Grace 1, for carrying Iranian crude oil to Syria, thus violating the sanctions imposed by the European Union. This vessel was registered under the flag of Panama. What followed the impoundment was the delisting of the ship by Panama. Resultantly, no State was now accountable for the actions of Grace 1 on the high seas, thus, defeating the objective stated in Paragraph 4 of the UNCLOS Preamble, i.e., to maintain law and order on the high seas. Since Grace 1 and many other vessels that were delisted by Panama post the UK-Iran feud was registered under the FoC, there existed no ‘genuine link’ between the vessel and the Flag state, thereby, creating a defence mechanism for such a nation to easily evade liability.


Conclusion

The current understanding of ‘genuine link’ is the triumph of formality over substance. Interpreting ‘genuine link’ as a mere formality of ensuring the effective exercise of control post the registration process and not as a pre-condition to it, defeats the patent purpose with which the concept was incorporated. Given the widespread and ravaging practice of FoC and open registries, the more sensible approach would be to sync the concept in line with the holding of the Nottebohn case as has been done by the Registration Convention. Using genuine link as a precondition to the registration of a ship with a State and providing a standard criterion for the same, would provide stability on international waters by creating greater accountability for both the States and the vessels flying the flag of such State.

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