[]{#flagofconvenience label=“flagofconvenience”}
The second example is the so-called “port of registry.”
Humanity has been crossing seas and oceans far longer than modern states have existed. During this time, various “rules of conduct on water” arose, one of which is the presence on a vessel of certain identification signs. The identification signs on a gentleman’s vessel clearly tell other gentlemen what kind of vessel this is and what consequences await them.
Behind the identification signs stands all the power—or powerlessness—of the organization that issued them. At the same time, if on land one needs to make considerable efforts to change organizations (state, trade guild, or company), at sea it is enough to change flags.
Flag games are therefore a rather popular occupation, especially during war. For example, during the American Civil War, the maritime trade of both the northerners and southerners was conducted under the British flag.
During World War II, before entering the war, American companies for some time used the Panamanian flag for trade with Britain. It is significant that after the war, the American government tried to exert pressure on shipowners to whom such practice appealed. It was precisely after World War II, with the opening of the ship registry of Liberia in 1948, that the flourishing of the use of flag of convenience began.
Interestingly, in Russian this term is most often translated as “port of registry,” although its literal meaning is “flag of convenience.” Indeed, the whole matter lies precisely in convenience. The flag of a vessel means which legislation its owner follows in its operations. Loading-unloading, hiring of crew, repairs, and hundreds more of the factors are regulated by the norms of the flag-states. If you are a shipowner, the possibility of choice among these norms will greatly help you save significant funds and expand your operations. Depending on the specifics of operations, one of your little ships can sail under one flag, another—under another.