According to the Merchant Shipping Laws 1963 (Ship Registration, Sales and Mortgages), as amended, which are the main laws for all matters relating to the registration of ships and related transactions in the Cypriot Ship Register, a mortgage on a Cyprus flag vessel can be registered at any time after the completion of the registration (provisional or permanent) of the vessel in the Cypriot vessel register or in the special parallel registration book.
Through a registered mortgage, the shipowner can obtain a loan or other financial benefits, subject to the conditions agreed between the contracting parties, without the need for an exchange control authorization. The creation of a mortgage under Cypriot law is not allowed on vessels registered alongside the Cypriot Ship Register.
Once created, a mortgage must be submitted to the Registrar of Cypriot Ships or to a consular official on the instructions of the Registrar. Whether deposited with the Registrar or with a Consular Officer, the Mortgage will subsequently be entered in the Register, from the date and time of its deposit, and will remain a charge on the vessel until that it is released by the mortgage creditors.
A mortgage can be created regardless of whether the vessel is registered provisionally or permanently. If the vessel, against which a mortgage has been created, is owned by a Cypriot company, the mortgage will also need to be registered with the Registrar of Companies within a maximum of 42 days after its creation.
In this way, the safety of mortgage creditors is protected in the event of liquidation of the company that owns the vessel. The transfer of a mortgage can be made by completing the statutory transfer form and submitting it to the Cypriot Ships Registrar or a consular official, together with the relevant deed of pact. The statutory mortgage and the deed of commitments must be duly certified or notarized.
A duly certified or notarized power of attorney from the registered owner / mortgagor and the mortgagee, authorizing the conclusion of the mortgage and the signing of the mortgage documents, is normally submitted to the Registrar of Cyprus Ships.
To discharge a mortgage, a release memorandum must be duly signed by the mortgagee. The same must be subsequently attested and handed over to the Registrar of Cypriot Ships or to a consular officer on the instructions of the Registrar.
Under the Merchant Shipping Acts 1963 (Ship Registration, Sales and Mortgages), as amended, there is full protection for financiers and mortgagees and there is no stamp duty on deeds. mortgage or other security documents.
Documentation
-Documents required for registering a mortgage on a Cypriot vessel
1. Written request from a local lawyer with 30 € lawyer fees.
2. Resolutions of the directors on behalf of the shipowners.
3. Power of attorney duly signed on behalf of the shipowners.
4. Mortgage and deed of pact (duly signed).
5. Certificate of directors and secretary (in the case of a company registered in Cyprus).
6. Duly signed official certificate (in the case of companies registered abroad).
-Documents required for discharge of a mortgage on a Cypriot vessel
1. Written request from a local lawyer with 30 € lawyer fees.
2. Power of attorney duly signed on behalf of the mortgage creditors (if the documents are not duly certified by notarial means).
3. Duly signed discharge receipt (separate or endorsed on original mortgage documents).
-Documents required for the transfer of a mortgage on a Cypriot vessel
1. Written request from a local lawyer.
2. Mortgage transfer instrument (duly signed).
3. Power of attorney duly signed on behalf of the mortgage creditors (if the documents are not duly certified by notarial means).
-Documents required for the transmission of a mortgage on a Cypriot vessel
1. Written request from a local lawyer.
2. Declaration of transmission of interest in a mortgage (duly signed).
3. Power of attorney duly signed on behalf of the mortgage creditors (if the documents are not duly certified by notarial means).
Source: Karitzis & Associates LLC
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