Insights | 16 December 2023 | Shipping Deputy Ministry

Marina Hadjimanolis , Shipping Deputy Minister

Cyprus is a modern, efficient and integrated maritime centre and is among the largest shipmanagement centres in the world and the largest in Europe. This, coupled with the number of fiscal and economic advantages offered by the Cyprus maritime administration has prompted companies to set up fully fledged offices on the island.

How would you assess the current state of the Cyprus shipping sector? Was 2023 a good year for the industry? 

We live in a constantly evolving environment and shipping due to its international nature is directly affected by the volatile geopolitical developments. The past years have proven unpredictable, and shipping continues to face unprecedented challenges even in 2023. Undoubtedly the war in Ukraine and restrictive measures imposed on the Russian Federation have impacted shipping and seaborne trade, especially with respect to dry bulk and tanker shipments. This has adversely affected the shipping industry worldwide leading to changes in shipping patterns and has increased the distances travelled for commodities, especially oil and grain, with a consequential impact to the environment.  

During these volatile times the Shipping Deputy Ministry has played a leading role to tackle these challenges and overcome any difficulties which it will face. The shipping industry in Cyprus has proved to be resilient and the close cooperation of the public and private sectors have been instrumental in dealing with such problems. We believe that the right way forward is to turn challenges into opportunities and in this respect the Cyprus maritime administration is taking effective measures to support the resilient maritime cluster of Cyprus. We are optimistic that the steps taken to promote Cyprus shipping and enhance the competitiveness of the Cyprus flag will further enhance the position of Cyprus in global shipping. 

How does the Cyprus government plan to enhance the competitiveness of the country's shipping industry on the global stage, especially in light of evolving international regulations and market trends?

We are very proud of the development of shipping in Cyprus in recent years and the primary objective of the Government of Nikos Christodoulides is the further development of the Register of Cyprus Ships and the maritime cluster. Our immediate actions include a targeted action plan to promote the Cyprus flag and the maritime cluster of Cyprus by promoting our advantages both in Cyprus and abroad. Priorities also include the strengthening of the legislative and regulatory framework and safety levels on Cyprus ships. All the above efforts aim to strengthen our role in the international shipping arena and to provide fruitful conditions for the sustainable growth of our shipping industry. 

What initiatives is your Ministry taking to promote sustainable practices in the sector and to mitigate the environmental impact of shipping activities? 

The Cyprus Shipping Deputy Ministry is a leading advocate for sustainable shipping. The Cyprus government fully supports initiatives which contribute to the advancement and the sustainability of the maritime sector. We believe that broad and diverse measures are needed to achieve emission reduction targets and a sustainable future for the industry. This includes the use of cleaner fuels, the deployment of the relevant fuel infrastructure, the electrification of ships, and the use of energy efficiency technologies. A combination of all of these options has the potential to improve the commercial and environmental sustainability of the sector, but shipowners need to be rewarded for investment in sustainable practices to accelerate uptake. In this context, the Cyprus Shipping Deputy Ministry has demonstrated its support to the shipping industry to achieve its decarbonisation goals, by adopting green incentives to shipowners and operators, pertaining up to 30% reduction of tonnage tax for Cyprus ships, encouraging and supporting ships registered under the Cyprus registry to use alternative fuels, such as biofuels and hydrogen. These measures demonstrate the proactive measures taken by Cyprus to reduce its environmental impact. 

How does your Ministry plan to leverage technology and innovation to modernise and improve the efficiency of maritime transportation, and to stay at the forefront of current trends?

One of the main priorities of the Shipping Deputy Ministry is the continuous upgrading and strengthening of the framework of the services that it offers. Technology has a profound impact on the shipping sector and the Shipping Deputy Ministry recognises that innovation and technological advancements, such as automation and digitalisation, provide opportunities and play a crucial role in the evolving world we live in. In this context specific actions have already been taken, such as the ongoing project for the Digital Transformation of the Cyprus Shipping Deputy Ministry, which is funded under the European Union Recovery and Resilience Facility (RRF). This project focuses on digitalising all services provided by the Maritime Administration and will promote a paperless environment leading to simplification of procedures, further contributing to improving the competitiveness of the services offered to the shipping industry. 

Furthermore, the ‘One-Stop-Shipping Centre’ is among the measures that the government has announced with the aim of putting Cyprus at the forefront of the shipping industry worldwide and is being implemented in close cooperation with the Civil Registry and Migration Department of the Ministry of the Interior. The one-stop-shipping framework will provide direct service to the shipping industry in relation to services that fall under the purview of other government departments and ministries so that transactions with the state can be carried out from a single point. This project has recently been implemented following the commencement of its operations at the headquarters of the Shipping Deputy Ministry on 20 November 2023. The forthcoming digital transformation of the Ministry and the establishment of a framework for a one-stop-shipping centre are only some of the actions recently taken by the Shipping Deputy Ministry aiming to increase the efficiency and effectiveness of its services.

Cyprus is a top maritime hub globally. What key factors make Cyprus an attractive location for shipping companies? And what is the current size of the resident shipping industry?

Today, Cyprus is considered a global maritime nation and over the years it has become one of the largest and most widely known shipping centres in the world. The Register of Cyprus Ships ranks amongst the top registries worldwide. The Cyprus merchant fleet is ranked 11th in the world and third in the European Union. Cyprus is a modern, efficient and integrated maritime centre and is among the largest shipmanagement centres in the world and the largest in Europe. It has a large resident shipping industry with over 250 companies based on the island covering the full range of shipping activities and related services. The number of shipping companies that are part of the Cyprus Tonnage Tax System currently exceeds 350. More than 55,000 seafarers are employed on Cyprus ships and about 9,000 people are employed by shipping companies based in Cyprus.

There are many factors which have contributed to the steady growth of shipping in Cyprus. Cyprus’ strategic location at the crossroads of three continents – Europe, Africa and Asia – has played a prominent role in the success of Cyprus as a major international centre as it provides easy access to markets and the ideal time zone for international operations. 

In addition, Cyprus combines a simple and effective regulatory structure where English is widely spoken by its highly skilled and specialised workforce, an efficient civil service and excellent banking and telecommunication systems. Cyprus also offers a family friendly environment, excellent weather conditions and high standard international schools. In addition, a number of fiscal and economic advantages are also available such as the favourable tonnage tax system which has been approved by the European Union, zero registration fees and exemption from income tax of seafarers on board Cyprus ships. Furthermore, the full protection afforded to financiers and mortgage lenders, the 24/7 service all constitute a competitive and attractive framework of advantages and services offered by the Cyprus maritime administration and these coupled with the low operating costs has prompted many companies to set up fully fledged offices on the island.

What have been the key developments and milestones for the sector in 2023? 

Cyprus, being an island nation with a long tradition in shipping, is particularly sensitive to issues such as climate change and the protection of the marine environment. In this respect, we consider that the adoption at MEPC 80 of the 2023 IMO Strategy on Reduction of GHG Emissions from Ships undoubtedly represents a milestone for shipping as it is a step towards the decarbonisation of international shipping and a possible roadmap for 2050. At a local level, the commencement of the one-stop-shipping centre from the headquarters of the Shipping Deputy Ministry is also a milestone in 2023 as it fulfils the long-standing requests of the shipping sector and implements the policies and actions of our government for provision of quality services.

Following my appointment as Shipping Deputy Minister, one of my priorities was to take the necessary steps to relocate the premises of our Administration to a single, ergonomic and energy-efficient building in order to enable the smooth and efficient operation of the Shipping Deputy Ministry. The Shipping Deputy Ministry is now located in three different buildings, and this creates operational and practical problems. This year is indeed a milestone year for the shipping sector, as after many years and intensive efforts, a suitable piece of state-owned land has at last been found and the necessary steps have been initiated, in cooperation with the Public Works Department, in order to proceed with the construction of a new building that will befit a maritime nation like Cyprus and satisfy both the existing and future needs of the Shipping Deputy Ministry of Cyprus.  

The year 2023 also marks another important milestone in the history of shipping as we celebrate 60 years since the establishment of the Registry of Cyprus Ships. This year we celebrate the excellence and quality of the Cyprus flag, which despite the difficulties and challenges it faces, continues to be considered as one of the highest quality and most competitive flags worldwide.

What steps is your Ministry taking to foster collaboration and strengthen relationships with international partners and organisations, with the aim of furthering the interests of Cyprus as a prominent maritime hub? 

As shipping is an international industry, Cyprus, being a member of the European Union and the International Maritime Organisation (IMO), attributes great importance to its cooperation with other maritime nations and organisations.  Cyprus relies on policies based on principles and values governing the IMO, which we consider to be essential in our endeavours to develop and maintain and consolidate a comprehensive regulatory framework, ensuring at the same time a level playing field. In this respect, Cyprus fully supports the work of the IMO and ILO.  Since 1973, when Cyprus became a member of the IMO, Cyprus has played a positive role in the endeavours of the IMO to achieve the objectives of maritime safety and environmental protection and to improve the living and working conditions of our seafarers. The contribution of Cyprus with respect to the work of the IMO has been extensive and consistent. Since 1987 Cyprus has been elected as a member of the IMO Council, reflecting its important role in the international community as it actively participates in the deliberations for regulating international shipping. The attendance of the IMO Secretary General Kitack Lim as well as the IMO Secretary General Elect Arsenio Dominguez Velasco at both the Cyprus event, which was organised in London on the occasion of London International Shipping Week, as well as in Cyprus on the occasion of the Maritime Cyprus Conference 2023, highlights the excellent relations and outstanding cooperation between the IMO and Cyprus.

The importance placed by the Cyprus government in shipping is also highlighted by the active participation of the Shipping Deputy Ministry in the activities and work of international partners such as the ICS, WISTA, and others. Such an example is my upcoming participation at a Ministerial Panel at the Shaping the Future of Shipping High-Level Conference during COP26 which will be held in Dubai in December 2023, and which provides an excellent opportunity to foster collaboration with international partners and organisations. Since my appointment, I have had the opportunity to also participate in many bilateral discussions with representatives of other nations both in Cyprus and abroad, strengthening the relations of Cyprus with other countries. The participation of Cyprus in the London International Shipping Week and the Maritime Cyprus Conference 2023 was also an excellent opportunity to meet representatives from other maritime nations and strengthen the bilateral relations of Cyprus in the field of shipping.  

What are your expectations for the sector for 2024?

The primary objective of the President of Cyprus Nikos Christodoulides is to provide top quality services to the shipping industry and the achieve the further development and improvement of the Register of Cyprus Ships and the maritime cluster. Our immediate actions include a targeted action plan to attract new quality ships to the Register of Cyprus Ships and the establishment of new companies in Cyprus. Our priorities are focused on enhancing the competitiveness of Cyprus shipping and on the effective response to the challenges. We are committed to this goal and our efforts at the Shipping Deputy Ministry are focused on ensuring a competitive sector, laying a solid foundation for a favourable future. 

Maritime training is also an area to which great importance is attached as it contributes to improving the safety levels of ships.  Our immediate objectives include promoting maritime studies and blue professions and strengthening partnerships with educational institutions. We hope that the maritime culture will be established among young people so that more people will choose the maritime profession and that the increasing trend in the number of students attending maritime schools will continue in 2024.

Within 2024, we hope to have achieved our goals for the completion of the digitalisation project in order to increase the efficiency and effectiveness of the services provided to the shipping sector.  Furthermore, in 2024 we intend to proceed with the implementation of the Shipping Limited Liability Company Law following the recent completion of the secondary legislation, which will simplify the procedures and operating regime of Cyprus shipping companies that own Cyprus ships and increase the competitiveness of Cyprus shipping. 

We look to the future with optimism, and we are confident that our actions and continuous cooperation with the shipping cluster will further increase the attractiveness of Cyprus shipping and enable us to achieve our goals. We are confident that Cyprus shipping will develop and expand even further leading the way forward towards a new era which the next generations will be proud of.

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