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Commercial overview of the shipping industry

The Cayman Islands is a British overseas dependent territory with a population of approximately 65,000 people. The islands are strategically located south of Florida and Cuba, west of Jamaica and north of Panama in the northern Caribbean Sea.

The pillars of the Cayman Islands economy are tourism (both stayover and cruise) and financial services.

The Cayman Islands has a strong maritime heritage. It has a successful shipping registry and a vibrant cruise tourism industry: approximately 1.8 million cruise passengers arrived in the Cayman Islands in 2019. Because more than 97 per cent of everything consumed in the Cayman Islands is imported by sea, it boasts a very successful port operation. Approximately 700,000 tonnes of cargo passed through its main port at George Town, Grand Cayman in 2019, mainly from the United States, Jamaica, Mexico and the Dominican Republic. The Cayman Islands has no significant goods exports.

The Cayman Islands Shipping Registry was established in 1903 and the ports of George Town, Bloody Bay and the Creek, at which ships may be registered in the Cayman Islands, are recognised as British Ports of Registry. Cayman Islands-flagged vessels have full British Consular Services and Royal Naval assistance and protection worldwide. The Cayman Islands Shipping Registry has Category 1 status, which allows it to register vessels of any size and type as long as they meet international standards, and it provides services to commercial ships and private pleasure yachts. As at February 2020, the flag consisted of approximately 2,200 vessels, representing approximately 6 million gross tonnes and comprising approximately 1,800 pleasure yachts and 400 commercial vessels. The Cayman Islands is the registry of choice for superyachts globally.

The Cayman Islands is white-listed in all major international ports (the Port State Control Memoranda of Understanding), which has led to it maintaining its position on the prestigious United States Coast Guard Qualship 21 programme since 2007.2 The Cayman Islands is a top flag on the white lists of the Paris Memorandum of Understanding on Port State Control 1982 (the Paris MOU) and the Tokyo Memorandum of Understanding on Port State Control in the Asia-Pacific Region 1994 (the Tokyo MOU) and a leading flag on the International Chamber of Shipping's annual Flag State Performance Table.

The continued popularity of the Cayman Islands flag can be largely credited to the service provided by the Cayman Islands Shipping Registry and the experience and technical excellence that has become synonymous with the Registry. Further, because of the stable political, social and economic environment in the Cayman Islands, coupled with a legal system based on English law, the Cayman Islands flag is extremely popular with banks and financial institutions.

General overview of the legislative framework

The Cayman Islands is a British overseas territory and a common law jurisdiction where the legal framework is founded on a mixture of case law and legislation. The Merchant Shipping Act (2021 Revision), consolidating previous statutes, is the key piece of overarching legislation in this field and various regulations have been made under it.3

International conventions that are ratified by the United Kingdom are generally extended to the Cayman Islands and subsequently implemented through domestic legislation. The United Kingdom has either ratified on behalf of the Cayman Islands, or extended and given effect to, most of the major international maritime conventions, including the following:

  1. the International Convention for the Safety of Life at Sea 1974 (SOLAS), as amended (including the International Safety Management Code 1998 (the ISM Code) and the International Ship and Port Facility Security Code 2004 (the ISPS Code));
  2. SOLAS Protocols 1978 and 1988;
  3. the International Regulations for Preventing Collisions at Sea 1972 (COLREGs), as amended;
  4. the Athens Convention on the Carriage of Passengers and their Luggage by Sea 1974 (the Athens Convention);
  5. the International Convention on Salvage 1989 (the 1989 Salvage Convention);
  6. the Convention on Limitation of Liability for Maritime Claims 1976 (the LLMC Convention 1976);
  7. the Maritime Labour Convention 2006 (MLC);
  8. the International Convention for the Prevention of Pollution from Ships 1973 (as modified by the Protocol of 1978) (MARPOL (73/78)) (including Annexes I, II, III and V;
  9. the International Convention on Load Lines 1966 (the Load Lines Convention), as amended;
  10. the Protocol of 1988 relating to the International Convention on Load Lines 1966;
  11. the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers 1978, as amended (the STCW Convention 1978); and
  12. the Nairobi International Convention on the Removal of Wrecks 2007 (the Nairobi WRC 2007).