An extract from The Shipping Law Review, 7th Edition

Commercial overview of the shipping industry

The shipping industry in Paraguay has grown steadily in the past decade, mainly as a consequence of the significance that agribusiness has for the local economy and the need to transport these commodities overseas.Paraguay's economy is dependent on foreign trade – it is one of the five largest soya exporters in the world; in the past 20 years the major international agri-commodity companies have settled in the heart of South America and, with them, their shipping arms. Traditional international carriers, such as MSC, P&O Maritime, Imperial Shipping and CMA CGM, and South American shipping companies such as ATRIA (formerly UABL) and Hidrovias, have invested heavily and are fully operational in Paraguay. Likewise, local carriers, led by Navemar and Copanu, play their role in meeting the continuous demand for hold space for Paraguayan products.The registered fleet size currently authorised by the Merchant Shipping Authority of Paraguay is of approximately 2,012 vessels, of which 1,741 are barges. From that total fleet, 90 per cent of the vessels and 80 per cent of the barges have Paraguayan flags, while the rest of the ships operating in Paraguay are registered under Argentinian, Bolivian, Brazilian and Uruguayan flags. The Paraguay–Paraná waterway, a system of rivers that starts in Puerto Cáceres (Brazil), passes through Bolivia, Paraguay and Argentina, and ends in Nueva Palmira (Uruguay), is the regular route used by the Paraguayan fleet.Paraguay's most important ports are concentrated in Asunción, Villeta, San Antonio and Encarnación, cities strategically located for river connections to the sea through Argentina, Uruguay and Brazil. Virtually all the cargo that leaves Paraguayan ports through the waterway in river carriers is transshipped to Argentinian, Uruguayan and – to a lesser extent – Brazilian ports, and from there transported by sea carriers to their final destinations.With the investment of carriers, the shipbuilding industry has flourished in Paraguay in the past few years. Japanese giant Tsuneishi arrived in the country in 2012 to join local companies Astillero Chaco SA, La Barca and Astillero Aguape SA. They remain a valid alternative to Argentinian and Brazilian shipyards, and the most frequently requested by shipowners in recent times. 

General overview of the legislative framework

Book III of the Code of Commerce, 'Rights and obligations arising from navigation', was the only one in this old Argentinian statute (1889) not repealed by the current Paraguayan Civil Code. It was adopted by Paraguay in 1903 and contains the legal framework for private maritime law. Both dry and wet domestic shipping is controlled by this law, which contains provisions related to ships, shipowners, charterers, captains, crew, contracts of affreightment, charter parties, bills of lading, collisions, shipwrecks, salvage, cargo claims, general average, ship mortgage and maritime liens.

The Paraguay–Paraná River Transport Agreement adopted by Law No. 269/1993 is an international agreement entered into between Argentina, Bolivia, Brazil, Paraguay and Uruguay to regulate international river transport through the most important waterway in South America. The agreement contains five additional protocols related to customs matters, navigation and safety, insurance, equal opportunities for increasing competitiveness and dispute resolution.International carriage of goods by sea is governed by the UN Convention on the Carriage of Goods by Sea 1978 (the Hamburg Rules), adopted in Paraguay by Law No. 2614/2005.In the administrative sphere, the most important statutes are the Code of Fluvial and Maritime Navigation, adopted in Paraguay by Law No. 476/1957, and the Capitanias Rules, adopted by Law No. 928/1927.Other key international legislation adopted by Paraguay include:

  1. the Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels 1910 (the Collision Convention 1910);
  2. the International Convention on Civil Liability for Oil Pollution Damage 1969, replaced by 1992 Protocol (the CLC Convention);
  3. the International Convention for the Unification of Certain Rules relating to Penal Jurisdiction in Matters of Collision and Other Incidents of Navigation 1952 (the Criminal Collision Convention 1952);
  4. the International Convention Relating to the Arrest of Sea-Going Ships 1952 (the Brussels Convention);
  5. the United Nations Convention on the Law of the Sea 1982 (UNCLOS);
  6. the International Convention for the Safety of Life at Sea 1974 (SOLAS); and
  7. the Convention for the Suppression of Unlawful Acts of Violence Against the Safety of Maritime Navigation 1988 (SUA).