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Vassilios Demetriades: Cyprus Shipping Deputy Minister

The Cyprus Shipping Deputy Ministry was established on the 1st of March 2018 and is dedicated to the development and implementation of a comprehensive national shipping strategy for the expansion of the Cyprus Register of Ships and the Cyprus shipping cluster

“Cyprus provides a great number of incentives and an EU approved tonnage tax regime for shipping companies which ensures fiscal stability and certainty to international shipping companies. We have also established a mentoring team of 16 young shipping professionals to share knowledge and experiences with the young generation whilst showing the multidimensional character of shipping.”

How does the Cyprus Shipping Deputy Ministry consolidate the island’s position as an advanced maritime cluster?
“Cyprus is taking a proactive approach to ensuring the long-term quality and efficiency of the Cyprus flag. Through our policies and actions, such as the new ‘SEA Change 2030’ strategic vision, Cyprus is creating a new mindset and working culture in the Shipping Deputy Ministry (SDM). It is more than evident that through this strategy we aim to be close to the shipping industry, collecting industry intelligence, seeking consultation with individuals and the shipping industry to make informed decisions while ensuring that our legal framework, policies, incentives, and national positions are fit for purpose and reflect the challenges, the specificities, and the realities of global shipping. The implementation of the 35 Sustainable Actions presented in the Strategy will make Cyprus shipping and our Registry more competitive and resilient to crises.

“Cyprus is continually implementing improvements such as the digitalisation of all services offered by SDM, establishing the legal framework of the Maritime Entity, establishing the framework to promote Cyprus as place for arbitration and mediation on maritime disputes, and strengthening the network of our offices abroad. All these actions, and many more that will follow, demonstrate our determination to support the shipping industry in successfully navigating the challenges ahead, while further enhancing Cyprus as a flag of quality, always striving for excellence, and continuously focused on safety.”

What are the key functions, or main responsibilities of the ministry?
“The Cyprus Shipping Deputy Ministry was established on the 1st of March 2018 and is dedicated to the development and implementation of a comprehensive national shipping strategy for the expansion of the Cyprus Register of Ships and the Cyprus shipping cluster. The Deputy Ministry is also responsible for maintaining, updating, and implementing all shipping legislation in all matters relating to the Deputy Ministry’s competencies, including the registration of ships in the Cyprus Register of Ships, the issuing of relevant certificates and licences, the enhancement of maritime safety as a flag state, port state and coastal state, prevention of marine pollution, seafarers working conditions, training, and certification.

“Cyprus Shipping Deputy Ministry is also committed to education. Through continuous supervision of the marine academies and maritime training providers in Cyprus and Greece, cooperation with academies to improve and expand their offering, granting scholarships to marine academy students, and subsidies to marine cadets for onboard training, we are doing all we can to bring the next generation into the shipping industry and its related sectors. We are even making regular visits to schools all over Cyprus to ensure that even the youngest children understand the exciting opportunities available to them. We fully recognise that commitment to the next generation is central to nurturing the leaders of tomorrow.

“The Shipping Deputy Ministry is also responsible for the coordination of the integrated maritime policy of Cyprus. In our effort to maximise the growth potential of our seas in a sustainable way we are formulating Cyprus’ Maritime Spatial Plan – a key cross-cutting tool of our National Integrated Maritime Policy promoting a holistic approach of all the Blue Economy Sectors.
“The Maritime Spatial Plan (MSP) is the process by which a country analyses and organises human activities in its marine areas to achieve ecological, economic, and social objectives. It is a valuable instrument for sustainable development of marine areas and coastal regions and contributes to the objectives of an ecosystem-based management approach. The MSP covers the whole sea area of Cyprus (territorial sea and Exclusive Economic Zone). It is anticipated that Cyprus’ maritime spatial plan will be ready towards the end of this year. We look forward to sharing our achievements in the years to come.”

Cyprus has successfully built a diversified and robust maritime industry, which offers a unique set of competitive advantages. Why should international shipping companies and investors consider Cyprus as a shipping hub?
“Cyprus provides a great number of incentives and an EU approved tonnage tax regime for shipping companies which ensures fiscal stability and certainty to international shipping companies. Cyprus is a proactive flag which strives to adapt and create policies to meet the needs of the shipping industry. As an example, Cyprus is currently working on a dedicated project funded by European Union Recovery and Resilience Facility Programme to digitalise all services provided by the Cyprus Maritime Administration, creating a paperless environment and the framework conditions necessary to support the integration of all our business units, which will further increase our efficiency and quality of service. The transformation is underway and is expected to be fully implemented by early 2024 – we look forward seeing the progress we can make in the short-term.

“Cyprus is also a leading maritime centre, which is well organised and represented within the shipping industry with more than 3,500 vessels managed from Cyprus with a total net tonnage of around 80 million, which represents about 20 per cent of the world’s third-party managed fleet and 4.5 per cent of the world fleet. Cyprus is known for its strong maritime services infrastructure, spanning the breadth of insurance, legal, accounting and ship management to bunkering and technical services, all offering a professional and reliable 24/7 service.”

What are the specialised requirements and needs of shipping companies?
“Firstly, shipping companies are looking for a stable fiscal environment. Cyprus’ tonnage tax system was renewed in 2019, following approval from the EU, and is prolonged until 2029, increasing Cyprus shipping’s credibility and ensuring stability to the shipping community. It has been a popular benefit, demonstrated by the increase in the number of shipping companies registered under this regime which has increased by 63 per cent since 2018.

“In addition, shipping companies rely upon access to a 24/7 service of the highest quality. We pride ourselves on the quality of our services, the relationship we have with our clients, and the readiness with which we can respond to queries and resolve any issues. We are currently in the process of further simplifying procedures for our Registry by integrating all our services in a single automated system, as well as insuring a one-stop service through a single point of contact.

“Lastly, adaptability has never been more important. Cyprus is taking a proactive approach to helping the shipping industry achieve its decarbonisation aims by creating new policies and initiatives that incentivise shipowners and operators by providing green tax incentives. Shipping companies are expecting Shipping Administrations to support the sector in difficult times as Cyprus, throughout the Covid-19 pandemic and since the beginning of the Ukraine war, demonstrated its strong support to shipping companies by responding positively to numerous requests facilitating smooth shipping operations, to the extent possible. We are proud of our collaborative approach and will continue to adjust our offering as the industry evolves.”

What are the challenges facing the shipping industry now?
“Unsurprisingly, the shipping industry has been significantly affected by the Covid-19 pandemic and from the Ukraine war. In response to these challenges, Cyprus was one of the first countries worldwide that recognised seafarers as key workers. Cyprus implemented a formal crew change process, assisting with the repatriation of thousands of seafarers. The SDM also formulated and proposed a practical, global approach to delivering Covid-19 vaccinations to seafarers, which was then adopted by the International Labour Organisation (ILO). Further recognising the urgency of seafarer vaccination, and the role this would play in easing the crew change crisis, Cyprus then committed to vaccinating all crew onboard Cyprus-flagged and managed vessels with the adoption of a national vaccination plan to provide protection to over 40,000 seafarers.

“In addition, in response to the conflict between Russia and Ukraine, Cyprus facilitated the opening of bank accounts for both Ukrainian and Russian seafarers to enable them, and their families, to easily access their wages. We also believed that shipowners and crew managers required an effective solution from flag states to a challenge that many were facing.

“Coupled with these serious issues, we have the ongoing challenges relating to decarbonisation and digitalisation. It is essential that we remain constantly adaptable in managing these changing environments – being ambitious but at the same time pragmatic.
“Cyprus is taking many proactive steps to support the decarbonisation of shipping. For example, encouraging and supporting shipowners flying the Cyprus flag to trial alternative fuels such as biofuels and hydrogen. And working together with the Cyprus Research and Innovation Foundation to establish a “Research Innovation Shipping Environment” (RISE), aiming to provide funding tools and programmes that encourage research and innovation for cleaner shipping.

“In addition, we are also looking for ways to promote common projects within the industry, supporting collaboration to accelerate decarbonisation. For example, Cyprus is contributing to the testing and discussion about the potential for the use of alternative fuels and how to accelerate its use. We also actively participate in debates on both a global and European level where decarbonisation agenda is high on the agenda.

“We look forward to highlighting these current challenges at Maritime Cyprus 2022 in October, which focuses on the theme of ‘Shipping’s response to the three Cs: Crises – Challenges – Competitiveness’. As an industry we must collaborate, discuss how we respond to these issues, and then take positive, collective action to transform the industry together.”

‘SEA…YOUR HORIZON’ is a campaign that aims to create a long-term strategic vision for Cyprus shipping. What was the inspiration behind this exciting initiative, and how do you intend to use the campaign to bring about positive change in the industry?
“We launched an interactive online campaign ‘SEA…your Horizon’ aimed at secondary school children. We believe that our children using information technology could find it more interesting and entertaining in becoming more acquainted with the shipping sector. The Shipping Deputy Ministry has recently launched a new campaign which relates to ‘SEA…your Horizon’ in cooperation with the entire shipping industry. Through ‘Let’s DISCO’ we invite students and parents to get into the rhythm and Dive Into Shipping Career Opportunities! We have also established a mentoring team of 16 young shipping professionals to share knowledge and experiences with the young generation whilst showing the multidimensional character of shipping. During the last two years we held – with great success – the ‘THALASSA’; a two-day event where all organisations associated with shipping and the blue economy present their activities to the civil society to promote shipping as well as sea and maritime culture amongst the younger generation. We fully recognise that commitment to the next generation is central to nurturing the maritime leaders of tomorrow.

“At the Maritime Cyprus 2022 Conference, Cyprus will host a session specifically aimed at young shipping executives of the industry. This forum has been a key part of the conference for years and creates a platform for younger people to discuss and share their vision of the industry. We listen carefully to the prospects that stimulate them and challenges that affect them, taking away key learnings which then inform our future direction.”

“The ‘SEA…YOUR HORIZON’ campaign is attracting attention from other nations outside the European Union. It is fantastic to see our campaigns being mirrored in other countries and we are proud to be creating a blueprint for change. This collaborative strategy creates a new mindset on how to approach shipping. We want to be closer to the industry, to collect intelligence, evaluate data and adapt policies which benefit not only Cyprus but shipping.”

How do you see the future of shipping in Cyprus, and what role will the ministry play in the future, especially with increasing environmental, social and governance (ESG) requirements?
“Cyprus is committed to creating positive action in the short-term with the long-term aim of building a healthy, prosperous, and sustainable future for shipping. Our long-term national strategy provides a visionary approach – a new framework with clear direction that is underpinned by 35 tangible actions. Some of the outcomes and results of these actions will materialise soon, and some of them will take some time. It is all about a new way of thinking, a rejuvenated culture, and fresh tactics for success.”

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