Shipping & Transport - Portugal
Economic Study and Draft Navigation Law Seek to Boost Shipping Sector
Author
October 07 2009
Mateus Andrade
Dias
A report has recently been presented on research into the related aspects of maritime
economic activity. Research by a well-known economist into what is termed the
"economic hyper-cluster of the sea" has led to several proposals to government to
enhance sea carriage, shipbuilding and many other commercial activities related to the
sea. Among other things, the study found that the income tax system that applies to the
Conventional Registry is impeding the growth of the Portuguese merchant fleet. The
report argues that it should be replaced by a tonnage tax, which would remove the need
for the annual discretionary state aid given to Portuguese shipowners that operate
vessels within the legal framework of the Conventional Registry.
This is by no means the only area of change in the sector. Decree-Law 8/2009 has
amended the ranking of priorities for claims over ships sailing under the Portuguese
flag. The change in favour of mortgagees is intended to enhance the competitive
position of the Portuguese merchant fleet and increase the crewing of ships with
Portuguese nationals. The revised wording of Article 578 of the Commercial Code
moves mortgagees' claims from 15th position (below court costs, salvage awards,
wages, repairs, cargo damage and certain other claims) to third, behind court costs
and salvage rewards (for further details please see "New Regime for Ranking of
Priorities Benefits Mortgagees").
A draft navigation law has been prepared and submitted to Parliament for consultation,
modification and approval. The draft law has not yet been published or put to a vote.
However, it is expected to revoke several old provisions of the code and consolidate
existing legislation on the shipping sector in a single codified text. It is also likely to
introduce new provisions. For example, it is understood to propose (i) broadening the
list of claims that can form the basis of an arrest application under the Civil Procedure
Code to include insurance claims, and (ii) releasing creditors from the burden of
proving a well-founded fear of losing security for their claims. This will facilitate ship
arrest in Portugal and will bring the national regime into line with the 1952 Arrest
Convention.
For further information on this topic please contact Mateus Andrade Dias at Andrade
Dias e Associados - Sociedade de Advogados R L by telephone (+351 21 346 8134),
fax (+351 21 347 3746) or email (mateus@diaslawyers.com).
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