This is the second Annual General Meeting of the Cyprus Shipping Chamber that I attend and the 22nd for the Chamber. Being your Shipping Minister, as you in the Chamber like to call me, I really feel great pleasure and honour to be with you tonight to take stock of Cyprus’ great achievements in merchant shipping and the challenges that lie ahead. I am also here to say once again thank you to each and every one of your members for the trust you have shown to Cyprus and the Cyprus flag over the years.
Since its establishment in 1989, the Cyprus Shipping Chamber has developed into an influential and dynamic body in Cyprus maritime affairs, representing energetically and forcefully the locally based shipping industry, comprising all the shipowning, shipmanagement and shipping related companies. As such, the Shipping Chamber is an invaluable collaborator of my Ministry and of the Department of Merchant Shipping, in the development and implementation of the Government’s maritime policy. Its contribution, support and cooperation in all shipping matters relating to technical and policy issues, as well as in modernising the maritime legislation, promoting the Cyprus flag and Cyprus shipping and in the organisation of the biennial event “Maritime Cyprus” Conference, is extensive and very important and as such I feel once again bound to express the Government’s great appreciation.
Merchant shipping is probably one of the most important sectors of our economy that has been instrumental to the achievement of Cyprus’ economic miracle after the Turkish invasion of 1974, to the point that today Cyprus’ merchant fleet ranks 10th globally and 3rd in the European Union, For a small island state like Cyprus, whose one third of its territory continues to be militarily occupied by Turkey, including its largest 1974 port, the Famagusta Port, as well as one third of its population still refugees in their own country, this booming and flourishing of the shipping sector is more than a miracle. This is why all Cypriots feel extremely proud of these achievements. Beyond the invaluable contribution to the country’s economy, the development of the shipping industry has significant political and economic advantages.
At the same time, the Cyprus Registry has a high reputation worldwide as a “Flag of Progress and Quality”. This is the consequence of a well planned policy of maintaining a high standard and high quality fleet and simultaneously of effectively and scrupulously implementing the internationally applicable safety, security and environmental protection standards.
This is the foundation on which Cyprus builds its reputation as a serious maritime flag and as a base for international operations. The implementation of a series of legislative and administrative measures for the enhancement of maritime safety and security which are in line with the European guidelines and the objectives of the local shipping industry are the measures enabling Cyprus to maintain the “White List” status in the flag assessment systems on port state control. Our aim is not just to maintain Cyprus´ leading role in world shipping but to further develop and upgrade Cyprus shipping. Our ambition is to be a step ahead of competition at any time, both as an international registry and as a base for international shipping operations. Cyprus’ strategic location and a series of other important factors, such as an efficient civil service, an outstanding high level of legal and accounting professionals, an excellent and reliable banking system, state of the art telecommunications and air links to all important destinations in Europe and third countries, constitute firm foundations and the underlying factors for the influential role that Cyprus enjoys in the shipping industry internationally.
The hard work and the excellent long standing coordinated efforts and close co-operation of the public and the private sectors throughout the years remain the key to this success. A recent example of this successful cooperation is the new tonnage tax system for Cyprus merchant shipping. The new Cyprus tonnage tax system was approved by the European Commission and the respective Merchant Shipping Law was enacted and applies as from the fiscal year 2010. The system secures a stable fiscal environment for Cyprus Shipping in the long term. This, in fact, provides new impetus for the whole shipping industry of the island and creates much greater prospects for future growth. The new tonnage tax system provides Cyprus with a competitive advantage and is expected to improve the already strong position of the country in the shipping world and to promote it both as an international ships’ registry and a high quality maritime center. The objective to safeguard the competitiveness of shipowners of Cyprus ships and shipmanagers based in Cyprus, has been fully achieved. In addition, the new tax scheme extended the benefits to shipowners of foreign vessels and to charterers. It is evident that the vast majority of shipping companies already operating from Cyprus will take advantage of the new scheme.
The promotional campaign for the new tonnage tax system has already begun and a number of missions have already taken place since last year, with the participation of my Ministry and the Department of Merchant Shipping, as well as the Union of Ship Owners and the Cyprus Shipping Chamber. As we speak, the Director of Merchant Shipping Mr. Sergiou is in Singapore participating in the SEA ASIA 2011 Conference and Exhibition, which is being attended by more that 9000 shipping executives.
The response of the shipping industry to our new Tonnage Tax system has been very encouraging and promising so far and it is being expected, from the interest shown so far, that a significant number of foreign shipping companies, belonging mainly to European interests, contemplate to establish offices in Cyprus, to take advantage of the new system.
Shipping is an international activity. The free movement of goods and raw materials worldwide is essential for the economic development of mankind. In this respect, the lifting of the Turkish restrictive measures against Cyprus shipping would certainly have a positive economic and political impact. This issue adversely affects European interests and our intention is to seek a solution in line with the European Acquis. Towards this goal, my Ministry, with the close cooperation and assistance of the CSC and the industry in general, has raised the issue and has exercised maximum pressure at various levels within the bodies and the members of the European Union. We hope that the new campaign we started last October will gradually bear fruit.
The global shipping industry and the seafaring community are increasingly concerned of the escalating threat of the aggressive activities of pirates in waters off the coast of Somalia, which have spread in the wider North West Indian Ocean. Today, the biggest problem facing the shipping industry is piracy. In 2010, there were 219 reported incidents in which there were 49 vessels hijacked, 1016 seafarers taken hostage, 13 seafarers injured, and 8 seafarers killed. In just the first two months of 2011 there were more than 60 pirate attacks, 13 hijackings and over 240 seafarers taken hostage by Somali pirates. Currently, more than 31 ships and 700 seafarers are being held hostage by Somali pirates for ransom.
The Somali authorities have not taken, thus far, any effective action against the well organized criminals, who use, and will continue to use, Somalia as their base and safe haven for their operations. As the resolution of the domestic affairs of Somalia and the establishment of an effective Government remain an elusive target, my Ministry, through the Department of Merchant Shipping, has initiated a comprehensive review of the Cypriot policies and legislation relating to piracy. This is being done in the light of the continuously evolving practices of the perpetrators, who have become an unprecedented menace for the world trade. I highly appreciate the valuable inputs the Cyprus Shipping Chamber has made thus far and I am looking forward to continuing the constructive cooperation with the Chamber, with a view to completing this work and putting it into effect the soonest.
Cyprus represents an example of a maritime country constantly adapting to the evolving needs of the shipping industry. A decade ago, by performing a correct analysis of the trends, Cyprus took all necessary measures to transform its flag into a quality and reliable maritime flag. The motto adopted was to transform the Cyprus flag into a flag of progress. We are very proud to say that our goal has been fully achieved. But we are not complacent. We always strive for further improvement and achievements. We are confident that, with the coordinated effort of all the stakeholders in Cyprus shipping, the maritime sector of Cyprus will have an even brighter future.
Concluding, I wish to express the conviction that the excellent working relationship between my Ministry, the Department of Merchant Shipping and the Cyprus Shipping Chamber will continue and be further strengthened.
I extend once again my appreciation for your endeavours and contribution to Cyprus shipping. I wish you every success in the deliberations of your Annual General Meeting.