Flags of convenience have long been the go to tool for those looking to operate shipping outside the law. A flag of convenience is when a company for example based in the United States, establishes a tiny office in another state, Mongolia, the largest landlocked country in the world, for example, and uses that office to register their ships in that country thereby allowing them to fly that countries flag. Under international maritime law, your vessel is subject to the laws of the nation it is registered in. States like the United States have strict laws governing vessels flying their flag of course in ranging from safety standards, to environmental standards, and all applicable laws of the host nation so anything illegal in the US would be illegal on a US ship even in international waters. A landlocked country like Mongolia, has little concern about maritime affairs and as such has very minimal if any legislation on such, and even less interest in enforcing it, but as a recognized …show more content…
It's a huge combination of things, taxes for one. American taxes are some of the highest in the world. In a choice between a country with a 30%+ tax rate like the US or 10%~ like Mongolia the choice is easy. America has the absurd requirement that for major repairs you use union American shipyards if you fly an American flag, even if it means limping back to that port. American ports are some of the costliest in the world so that's another reason to avoid an American flag. America also requires you to use all American sailors which in as global of a business as literally going port to port around the world is antiquated. It should be mentioned that American union standards make American sailors some of the most expensive in the world as well. America has regulated itself out of the shipping industry almost entirely and it's not the only one, most of Europe flies flags of convenience as well from the Danish based Maersk to Japanese companies as