The U.S. Virgin Islands open ship registry launched on Feb. 1, 2022. Open registries, often referred to as flags of convenience, refer to registry systems that allows vessel owners to register their vessel under the flag of that country, despite no genuine link existing between the flag state and the vessel. Open registry countries generally allow foreign ship owners to register their ship in their country with minimal or no requirements to show national, social or economic connections to that country.

In contrast, a closed ship registry country requires a genuine jurisdictional link between the country and the ship through requirements, such as, the ship owner and crew sharing the nationality of the flag state and the ship-owning company having headquarters within the flag state. Closed ship registry’s comply with both Article 5 of the 1985 United Nations Convention on the High Seas and Article 91 of the United Nations Convention on the Law of the Sea, which provide a country with the right to fix the conditions for the grant of its nationality to ships so long as a genuine link between the flag state and the ship exists. Nevertheless, there is no agreed upon understanding as to what constitutes a genuine link, which has allowed states freely adopted open registries without observing the foregoing genuine link requirement.

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