The new Cyprus-India agreement on merchant shipping

The new reciprocal agreement on merchant shipping between Cyprus and India entered into force on 29 November 2017, replacing an earlier agreement dated 11 February 1997. The most significant provisions of the new agreement are summarised below.

  • Each country will treat the other country’s vessels in the same way as it treats its own vessels engaged in international voyages in respect of free access to ports, use of ports for loading and unloading of cargoes and for embarking and disembarking of passengers, payment of dues and taxes based on the tonnage or otherwise, in accordance with the national laws and regulations, exercising normal commercial operations and use of services related to navigation (Article 5).
  • Each country will recognise the identity documents issued by the competent authorities of the other country to crew members who are nationals of that country (Article 7).
  • While a vessel of one country is in a port in the other country, all of its crew will be permitted temporary shore leave in the territory of the municipality to which the port belongs, as well as in the territories of adjacent municipalities, without any visa being required, provided they can show the relevant identity document mentioned in Article 7 and provided the master of the vessel has submitted a crew list to the appropriate authorities at the port, in accordance with the regulations in force in that port (Article 8).
  • If a vessel of one country is shipwrecked, runs aground, is cast ashore or suffers any other accident off the coast of the territory of the other country, the vessel and the cargo are entitled to the same benefits and privileges and subject to the same liabilities as apply to the host country’s ships and their cargo. The crew and passengers are entitled to the same level of assistance as are available to the crew and passengers of the host country’s ships (Article 10).
  • The taxation of income of any kind derived from the use of vessels in international traffic will be governed by the double tax agreement between the two countries (Article 11 (1)).
  • Residents of one country who are employed on board vessels of the other are subject to tax on income from that employment only in the country in which the vessel is registered and whose flag it flies (Article 11 (2)).
  • The freight income obtained from the operation in international traffic of vessels of one country by enterprises established in accordance with its national legislation, will be exempt from fees and taxes of any kind in the territory of the other country (Article 11 (3)).
  • Shipping enterprises of one country may use income and other revenue deriving from maritime transport operations obtained in freely convertible currency within the territory of the other country for the purpose of making payments in the territory of the other country, and may remit any surplus funds abroad (Article 11 (4)).