The Greek Ministry of Shipping and Island Policy is the competent Greek maritime authority and mainly performs its duties through the Hellenic Coast Guard. The ministry is the central registry office, but all the major ports in Greece are authorised to register vessels and record mortgages. The majority of vessels are registered with the Piraeus Ship Registry.
In terms of filing requirements, these depend on the relevant entity. For example, foreign (non-Greek) shipping companies with an established branch office in Greece are required to make annual filings, in accordance with Article 25 of Law 27/1975 (filing, inter alia, a list of employees, bank confirmation of imported foreign exchange, a declaration evidencing the distribution of imported capital etc). Non-compliance with these filing obligations may result in the branch office’s licence being revoked.
However, filing requirements do not extend to any group of shipowners – rather, these are obligations of the relevant shipowner.
The maritime shipping sector has been one of the last industries to face the application of European competition rules.
There are a number of EU Council Regulations (with direct effect in Greece) governing the maritime shipping sector, which aim to promote the fair process of competition and ensure compliance of the maritime industry with Article 81 of the Treaty on the European Union (Nice consolidated version), including the following:
According to Lloyd’s List Intelligence data for 2019, Greece is ranked among the top ten flag states (in ninth position) and has the second-largest fleet in Europe with 40.3 million registered gross tonnage and 1,545 commercial vessels registered under the Greek flag.
Greece has directly ratified the following major international maritime conventions in relation to liability for carriage of goods, arrest for security and pollution:
The Greek government recognises the following classification societies:
Under Greek law, there are two possible methods of registering a ship with a Greek flag:
One of the main reasons for the worldwide development of Greek shipping is the favourable legal framework that Greece offers for conducting shipping business and especially the very attractive taxation regime.
Law 27/1975 provides that Greek-flagged vessels and foreign-flagged vessels managed from Greece are only subject to a fixed tonnage tax (depending on the tonnage, age and category of the vessel). The provisions of Law 27/1975 on the taxation of ships are constitutionally protected (Article 107 para 1 of the Greek constitution).
Law 27/1975 offers, inter alia, discounts on tonnage taxation, the most important of which are the following:
In order to register a vessel under the Greek flag, more than 50% of the shares in the vessel must be beneficially owned by either:
Until 1999, Greece maintained strict cabotage restrictions in the cruise sector. As a result, only cruise ships under the Greek flag were permitted to offer cruise services in Greek ports.
EC Regulation 3577/1992 introduced the principle of freedom of services in maritime cabotage trade within member states. Cruise services were extended to cruise ships flying European flags in 1999, in accordance with the EC Regulation, however, Greece maintained cabotage rules for cruise ships flying non-EU flags until August 2010. In 2010, Greece passed Law 3872/2010 according to which cruise companies with cruise ships flying the flags of non-EU registries could obtain the right to provide cruise services in Greece if they fulfilled certain requirements.
The last cabotage restrictions were abolished by Law 4072/2012 and Law 4150/2013 with a view to increasing cruise homeport services in Greek ports.
Historically, the main ship finance markets have been centred in London, New York, Germany and the Nordic countries. More recently, ship finance markets have shifted to Asia (China, Singapore, Hong Kong), with the emergence of Far Eastern leasing companies and financial institutions.
As a number of international banks have sought to reduce their exposure to the shipping industry, Greek banks have started to increase their presence in the sector, recording an increase in shipping finance activity, despite the financial depression in Greece over the last decade.
Ship mortgages are the only documents related to ship finance which are required to be registered. These must be recorded in the mortgage register maintained at the port of the vessel’s registration in order to be effective. The mortgage must be in the form of a notarial deed and in the Greek language. If a mortgage is executed abroad, a certified Greek translation of the mortgage must be submitted together with the original document.
Unlike in some other jurisdictions, only ship mortgages are registered with the Greek Ship Registry. Greek law provides for three different types of ship mortgages:
Besides ship mortgages, the most commonly encountered securities for ship finance transactions are the following:
The port of the vessel’s registration maintains two main registers:
The Greek Ship Registry does not yet have a full online platform. However, documentation for the registration of a vessel under the Greek flag can be submitted electronically.
A full “e-registry” for Greek-flagged private and professional leisure boats, professional boats under foreign flags and daily cruise ships is expected to be up and running from 31 December 2021.
The purpose of the planned electronic registry is to create complete electronic profiles of all the registered vessels (including owner data, outstanding issues and payments, ship status, number of charter days, vessel specifications and dimensions, seaworthiness certificates, insurance etc) in an effort to make the Greek Ship Registry more attractive to third parties by upgrading and modernising its services.
The Greek authorities (ie, the Greek Ship Registry, companies’ registry, tax authorities etc) issue their certificates in the Greek language. However, the majority of a vessel’s certificates issued by the Ministry of Mercantile Marine (ie, the certificate of nationality, certificate of measurement, document of compliance, safety management certificate etc) are issued in both Greek and English.
The Greek Ship Registry mainly certifies the following information: details of the vessel, title/legal ownership and the existence of any encumbrances (mortgages/recordable liens/arrest/restriction of sale) over the vessel.
The Registry of Shipping Companies in the Ministry of Mercantile Marine certifies the establishment of a Greek shipping company or the branch office of a foreign company in Greece, according to Article 25 of Law 27/1975, as well as its good standing, the details of the legal representative, the details of the board of directors of such company, and the registered address.
The timeframe for the issuance of a certificate depends on the workload of the relevant authority. As a result, a certificate may be rendered within the next business day of the request, or else within ten business days of the request.
The reflagging proceedings of a ship are undertaken by the interested party/ies and there is no direct contact or co-operation between the Greek Ship Registry and the new registry.
No registration fees or stamp duties are payable for the registration of a ship mortgage with the Greek Ship Registry. However, fees will be due to a Greek notary public for preparation of the notarial mortgage deed.
Besides mortgages, only orders prohibiting a vessel from sailing and vessel arrests are registered with the Arrest Register maintained with the Greek Ship Registry. No registration fees are payable for the registration of these encumbrances.
Several mortgages can be registered over a ship without the requirement of consent of a prior mortgagee (unless such consent is required according to the mortgage). If there is more than one registered mortgage, the order of priority of the mortgagees is determined according to the date and time each mortgage was recorded in the register.
Pledge agreements are not subject to registration in Greece.
The date and time of registration of a mortgage over a vessel secures and ranks the mortgagee’s claim in priority over any other claims (see 2.9 Multiple Mortgages). However, Article 205 of the Greek Code of Private Maritime Law recognises the following claims as maritime liens which take priority over a mortgage:
However, a first preferred mortgage on a Greek-flagged vessel registered as a foreign investment, in accordance with the provisions of Legislative Decree 2687/1953, ranks in priority to all maritime liens of Article No 205 of the GCPML, save for the ones which are also recognised as maritime liens in Article No 2 of the Brussels Convention in relation to liens and mortgages of 1926.
Following the registration of a mortgage over a vessel, any sale or deletion from the ship registry without the prior written consent of the mortgagee is null and void.
If a duly registered mortgage expires, the mortgagor is entitled to request a notarial declaration from the mortgagee, which must also be registered in order to take effect.
The authority of the Greek government to requisition vessels under specific circumstances is prescribed in Article 17 of the Greek constitution. This constitutionally protected power of the Greek government cannot be altered, even by act of parliament. Article 17 of the Greek constitution provides, inter alia, the following:
According to Article 17 of the Greek constitution, the following three conditions must be met in order for the requisition to be considered permissible:
In this regard, the Greek parliament has issued Law 4442/1929 (as further amended by Law 2006/1939) in relation to maritime requisitions, while in 1954 Greece passed Legislative Decree 3098 on the settlement of disputes between the Greek state and Greek shipowners deriving from the requisition of vessels during the Second World War period 1940–1945.
The ministerial decision setting out the conditions for the registration of a vessel under the Greek flag, pursuant to Legislative Decree 2687/1953, Article 13 (see 1.6 Types of Registrations), also provides for compensation to be paid to a shipowner in cases of requisition of a vessel (Article 13 para 2 (g) of LD 2687/1953).
Traditionally, ships have been financed through banks and financial institutions using conventional debt finance. Greece is no exception and the dominant form of ship finance remains a term loan facility secured by a registered ship mortgage.
Alternatives to traditional ship finance in Greece now include sale and leaseback structures (both from Western and Far Eastern leasing companies and financial institutions), export credit financing and builder credit or hire purchase arrangements. In particular, international private equity funds have shown a significant interest in providing direct credit and "traditional" debt finance to shipowners in Greece, albeit at higher interest rates and shorter loan terms (at least when compared with banks or institutional lenders).
Over the last few years, the syndicated shipping loan market has shown signs of robust growth due to the upward trends in ship values and the volatile behaviour of the shipping market. The main reason behind such increase is the spread of the risk of large loans among several participating banks.
The confidence of a bank in the flag state is an important factor when considering the financing of a vessel. This is due to the importance of the ship mortgage as the lender’s main security for the finance transaction. No banking institution would be willing to finance a vessel registered with a flag state which could create problems and difficulties for the registration of the ship's mortgage and, most importantly, to the enforcement of the lender’s security.
A flag state that enforces international safety and environmental standards and complies with international rules and regulations, with a low casualty record, is more appealing and acceptable to a bank for finance purposes than a flag state with low standards causing increased risk of exposure to environmental pollution, casualty or port state detention which might affect the operation of the vessel and the borrower’s ability to repay its loan.
A relevant guide as to the status of a flag state is the annual “White, Grey and Black (WGB) list” published in the Paris MoU Annual Report which ranks the flag states’ performance in complying with international safety and environmental standards.
Securitisation can provide an effective means of raising additional finance (or refinancing existing bank debt), although it is not commonly encountered due partly to an aversion to such structures following the sub-prime mortgage crisis and the high costs associated with such transactions. Greek law expressly provides for and promotes the use of modern securitisation (asset-backed) structures for the purposes of funding and enhancing the liquidity of private sector entities, by transforming illiquid financial assets into marketable securities.
Over the last few years, Greek banks have tried to access international capital markets, and securitisation is considered an alternative source for raising funds and funnelling liquidity into new loans.
Alpha Bank is one of the main Greek lenders that has utilised modern securitisation (asset-backed) structures for the purposes of funding and enhancing the liquidity of shipping entities. More specifically, Alpha Bank completed its second financing transaction of USD250 million through shipping securitisation with Citi in 2017, following the inaugural shipping securitisation issuance of USD500 million in 2014.
The HAPS (Greek securitisation guarantee programme) introduced recently by the Greek government is expected to play an important role in banks' efforts to restructure their balance sheets.
Capital markets are not a major source of finance for the shipping industry. In 2018, USD7.9 billion was raised globally by the shipping industry through capital markets, which accounts for a very small percentage of the funding required by the industry and is approximately 1% of the global fleet value. Raising finance in capital markets is a notoriously difficult and expensive process which requires the convergence of a number of factors. Not least of these is a macro-economic climate for shipping and a positive investment climate for the relevant shipping sector. In addition, a successful offering usually requires a long and established track record of paying profits to shareholders, the active support of institutional investors and exceptional timing. For this reason, traditional bank loan financing remains more appealing to Greek shipowners, especially due to the size (small to medium) of the shipping companies, which excludes them from public equity finance and the volatility of earnings and asset values.
The main sources of applicable labour law in Greece are the following:
The composition of the crew on board vessels under the Greek flag (and more specifically, the number of Greek seafarers that have to be employed per level of crew) is determined either by a presidential decree or by a ministerial decision.
Greek-flagged vessels are required to employ at least five Greek seafarers of any ranking (including the master) and a student of the Mercantile Marine Academy if the vessel does not exceed 4,000 GRT and at least six Greek seafarers of any ranking (including the master) and a student of the Mercantile Marine Academy if the vessel exceeds 4,000 GRT. Under specific conditions, the remaining crew can consist of foreign seafarers.
The terms of minimum wages are determined by the respective applicable seamen’s collective bargaining agreement signed between the Union of Shipowners and the relevant seafarers’ labour union. The wages are a matter for agreement between the parties. However, the agreed wage cannot be below the minimum wage provided for in the relevant seamen’s collective bargaining agreement.
Hours of work and overtime during which a seafarer is obliged to perform his/her duties on board the ship are stated in the seafarer’s employment contract and the relevant seamen’s collective bargaining agreement. Typically, the hours of work are eight hours per day, five days per week. Any work in excess is considered overtime.
The causes for justified dismissal are a matter for agreement between the parties to the seafarer’s employment contract, having regard to the relevant seamen’s collective bargaining agreement.
According to Article 66 of the GCPML, a seafarer is entitled to full medical treatment and to their wages in the event of an occupational injury or sickness. If the employment contract is terminated due to the injury (or sickness), the seafarer will be entitled to wages and medical costs for up to four months from termination of the contract.
Under Greek law, a seafarer is entitled to compensation if he/she becomes temporarily or permanently, partially or fully unable to work.
According to Law 551/1915, there are two compensatory regimes according to which an injured seafarer or his/her family, in the event of death of the seafarer, will be entitled to compensation from the shipowner:
Labour disputes (as defined in Article 614 of the Code of Civil Procedure) are subject to the exclusive jurisdiction of single-member courts (first instance/appeal).
According to Article 591 of the Code of Civil Procedure, labour disputes are governed by a special proceedings’ regime (the main objective being the speed of these proceedings).
Greece had ratified the ILO Repatriation of Seamen Convention 1926 (ILO C23), which was replaced by the ILO Maritime Labour Convention 2006 (MLC), implemented in Greece by Law 4078/2012.
Greece issued the Regulation for the implementation of the requirements of the International Maritime Labour Convention 2006 of the ILO (Ministerial Decision 352/2013).
Seafarers are entitled to repatriation in accordance with the provisions of the Regulation and any additional conditions more favourable to them according to the applicable Maritime Collective Agreement or their engagement contract. The Regulation provides for the right of repatriation of the seafarer at the shipowner’s expense.
The shipowner is responsible for making the following arrangements for repatriation:
The Panhellenic Seamen’s Federation (PNO) is the highest trade union organisation in Greece for seafarers, with 14 individual affiliates and is also affiliated with the International Transport Worker’s Federation (ITF). ITF agreements only apply to ships flying a flag of convenience (FOC), while non-FOC and national flag ships are covered by national seamen's collective bargaining agreements.
Law 3276/1944 provides that a seamen’s collective bargaining agreement that will set out the terms of seafarers’ labour contracts can be agreed between shipowners’ organisations and seafarers’ trade union organisations. Seamen’s collective bargaining agreements ratified by the minister and published in the Government Gazette have the force of law and are binding on every Greek seaman and shipowner of a vessel under the Greek flag. However, different agreements are concluded depending on the vessel’s category (seagoing cargo vessel, passenger ferry vessels, tugs, liner vessels etc).
The main issues regulated by the collective bargaining agreements are:
Article 51 of Law 2172/1993 provides for the establishment and operation of a special maritime division within the Court of First Instance of Piraeus and the Court of Appeal of Piraeus.
The maritime division of the Court of Piraeus has exclusive jurisdiction in the Attica region and concurrent jurisdiction all over Greece.
Greece is a party to the Arrest Convention of 1952 ratified by LD 4570/1066. According to Article 1 of the Convention, the following claims are defined as maritime claims:
Under Greek law, maritime claims are in personam claims. A party may apply (summary proceedings) before the Single Member Piraeus Court of First Instance for the arrest of a vessel as security for a maritime claim. Usually, these applications are heard within a few days and a decision is issued within one month.
Although the Greek legal framework offers several alternative dispute resolution mechanisms for conflict resolution, parties are still quite reluctant to resort to ADR in Greece. Practically, the only alternative form of litigation is arbitration, while mediation is not commonly used, despite the fact that more than 2,000 accredited mediators have registered with the national register over the last few years.
The provisions of Articles 867–903 of the Code of Civil Procedure apply to domestic arbitrations, while Law 2735/1999 (adopting UNCITRAL’s Model Law) governs international commercial arbitrations.
In Greece, there are two main arbitration bodies for maritime claims:
Mediation was introduced into the Greek legal system through Law 3898/2010, which implemented EC Directive 2008/52. Currently, the mediation process in civil and commercial cases is regulated in detail by the provisions of Law 4512/2018 (chapter B, Articles 178–206) that replaced Law 3898/2010.
In addition, the Code of Civil Procedure provides for out-of-court settlement (Article 214A) and judicial mediation (Article 214B).
Under Greek civil procedural law, auction proceedings in Greece generally take place without the involvement of a court. The main authorities involved in auction proceedings are a court bailiff and a notary public duly accredited by the Ministry of Justice to conduct electronic public auctions.
All public auctions are conducted exclusively through electronic (online) procedures (e-auctions) under the supervision of an appointed, accredited notary public (http://www.eauction.gr).
Although the court does not supervise auction proceedings, the court may participate during the auction proceedings following the filing of objections by any interested party in the course of the auction procedure.
The Greek Code of Civil Procedure provides that such objections may take place only at two stages: one before the auction and one after.
The potential objections may be summarised as follows:
The most common types of security permitted by Greek law include:
The amount and type of security are determined either by the agreement of the parties or by the court.
Foreign judgments can be enforced in Greece irrespective of the country where they were issued.
According to Regulation 1215/2012 of the European Parliament and Council on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, judgments issued in any other EU member state may be enforced in Greece under the provisions of this Regulation. No exequatur is required for the enforcement of such foreign judgment. An EU foreign judgment (accompanied by a certificate in the form annexed to the Regulation) is directly enforceable following service on the defendant without the requirement for any prior application for recognition of the foreign judgment as being enforceable in the Greek courts.
However, a foreign judgment issued by a non-EU member state (in order to be enforceable in Greece) must first be recognised/declared enforceable following an application before the Single Member Court of First Instance in accordance with the provisions of the Code of Civil Procedure (Articles 904 ff).
Under Article 905 of the Code of Civil Procedure, the following requirements must be satisfied in order for a foreign judgment to be declared enforceable in Greece:
Greece is also party to a number of bilateral international conventions which include provisions on the enforcement of non-EU foreign judgments.
Foreign arbitral awards can be enforced in Greece by virtue of:
Article 205 of the GCPML defines the claims that are considered maritime liens under Greek law and, as a result, have priority over registered mortgages.
A Greek ship mortgage, in the form of a notarial deed registered with the ship register in accordance with Articles No 195–204 of the GCPML, ranks in priority over any unsecured claims, subject however to any maritime liens.
However, a preferred ship mortgage on a Greek-flagged vessel registered as a foreign investment in the form of a notarial deed which has been duly registered in the mortgage register in accordance with the provisions of LD 2687/1953 ranks in priority over all maritime liens of Article No 205 of the GCPML, save for those which are also recognised as liens in Article No 2 of the Brussels Convention of 1926 in relation to liens and mortgages.
For foreign-flagged vessels, a claim is considered to be a maritime lien if both the law of the flag and Greek law recognise such claim as being a maritime lien. In this case, the priority of the maritime liens will be determined in accordance with Article 205 of the GCPML.
The arrest of a sistership or an associated vessel is very difficult under Greek law, except in very limited cases where the court is prepared to pierce/lift the corporate veil of the shipowning companies involved.
Limitations of Liability
Greece has ratified the 1976 Convention on Limitation of Liability of Maritime Claims (LLMC) of London by virtue of Law 1923/1991, and the 1996 Protocol by virtue of Law 3743/2009.
In line with Article No 2 of the LLMC, Law 1923/1991 (as amended) provides that the following types of claim may be subject to limitation of liability:
It must be noted that Article No 2 sub-paragraphs 1 (a) and (c) of Law 1923/1991 refer to “the exploitation of the ship” differing from the corresponding sub-paragraphs of LLMC 76, which use the phrase “the operation of the ship”.
It has been decided by high authority (Piraeus Court of Appeal, decision number 228/2016, with recent Supreme Court approval, decision number 1470/2017) that the term "exploitation" adopted by the draftsmen of Law 1923/1991, does not do justice to the original text of LLMC 76. Accordingly, the phrase “exploitation of the ship” in Article No 2 of Law 1923/1991 should be read in line with the English text of LLMC 76 (ie, “operation of the ship”) so as to include technical aspects and not only the commercial operation/exploitation of the ship.
Exemptions from Limitations of Liability
In line with Article No 3 of LLMC 76, Law 1923/1991 (as amended) provides that the following types of claims cannot be subject to limitation of liability:
Calculation of Claims
Article 16 of Law 4504/2017 ratified the increase of the LLMC limits according to the IMO “tacit amendment procedure”. Therefore, liability may be limited as follows:
It must be noted that Greece is a member of the International Monetary Fund (IMF) and, therefore, the resulting SDR is given its euro value (depending on the establishment date of the limitation fund), by using the method of valuation applied by the IMF for its operations and transactions. The SDR value is determined daily based on the spot exchange rates observed around noon London time, and posted on the IMF website.
There is no single answer to the question of which exceptional actions are provided for by Greek law for ending a maritime claim, and different provisions should be considered depending on the court proceedings initiated.
In 2019, the Greek government enacted the new Law 4670/2019, introducing a series of important amendments in the taxation of ships, which can be summarised as follows:
Greece follows a universal tonnage tax system (see 1.7 Types of Discounts).
Due to tonnage tax, individual and corporate shipowners are exempt from any income tax on the profits from the operation of the vessels. Also, shareholders are not subject to tax on the dividends deriving from the distribution of shipping profits of the Greek/foreign shipping company.
Shipping companies are exempt from any tax, duty, levy, contribution or deduction in respect of income obtained from shipping activities.
In addition, the transfer of any shares of a Greek/foreign shipping company and any shares of the holding (intermediary or not) company and the relevant capital gain is exempt from any tax (irrespective of the cause of transfer).
The new amendments on shipping taxation are set out in 7.1 New Corporate or Tax Legislation.
Under Greek law, it is possible in certain circumstances to reinstate companies which have been dissolved. The law does not expressly provide any particular timeframe, however, during which it is possible to reinstate a company. Advice should be sought in each case in order to determine whether a suit may be brought against such a company.
Greece is not a signatory to any international tax treaty relating to the taxation of shipping income. However, Greece is a party to more than 50 bilateral tax treaties with a view to eliminating the harmful effects of international double taxation, eg, the bilateral treaty between Greece and the USA which provides relief from double-income taxation on shipping profits of Greek-flag vessels which are owned by Greek legal entities and make calls on US ports.