What is the 'Maritime Law'

Maritime law is a body of laws, conventions and treaties that governs international private business or other matters involving ships, shipping or crimes occurring on open water. Laws between nations governing such things as national versus international waters are considered public international law and are known as the Law of the Seas. Maritime law is also known as "admiralty law."

BREAKING DOWN 'Maritime Law'

In most developed nations, maritime law is governed by a separate code and is a separate jurisdiction from national laws. The United Nations, through the International Maritime Organization (IMO), has issued numerous conventions that can be enforced by the navies and coast guards of countries that have signed the treaty outlining these rules. Maritime law governs many of the insurance claims relating to ships and cargo, civil matters between shipowners, seamen and passengers, and piracy.

Additionally, maritime law regulates the registration, license, and inspection procedures for ships and shipping contracts, maritime insurance and the carriage of goods and passengers.

IMO Conventions

The IMO was created in 1958 and is responsible for ensuring that existing international maritime conventions are kept up to date as well as develop new conventions as and when the need arises. Today, there are dozens of conventions regulating all aspects of maritime commerce and transport.

The IMO identifies three of these as its key conventions. They are:

The International Convention for the Safety of Life at Sea

The International Convention for the Prevention of Pollution from Ships

The International Convention on Standards of Training, Certification and Watch-keeping for Seafarers

Conventions are regularly amended to keep up with new business practices and technologies. On its website, the IMO has a complete list of existing conventions, their historical amendments and explanatory notes.

Enforcement

The governments of the of IMO's 171 member states are responsible for the enforcement of IMO conventions for ships of their nationality. Local governments enforce the provisions of IMO conventions as far as their own ships are concerned and set the penalties for infringements. In some cases, ships must carry certificates on board the ship to show that they have been inspected and have met the required standards.

Nationality of Ships

A ship's nationality is determined by the country where it is registered. Most ships are registered in the national registry of the country where their owners reside or operate their business. However, often for reasons of tax planning or to take advantage of more lenient local rules, some owners will register ships in countries that allow foreign ships to be registered. These registries are called "flags of convenience." Two common examples of flags of convenience are Panama and Bermuda.

RELATED TERMS
  1. International Maritime Organization ...

    A specialized agency of the United Nations that is responsible ...
  2. York Antwerp Rules

    A set of maritime rules that outline the rights and obligations ...
  3. Bottomry

    When the owner of a ship borrows money and uses the ship itself ...
  4. Admiralty Proceeding

    Any matter that comes before an admiralty court that involves ...
  5. Accounting Convention

    Guidelines that arise from the practical application of accounting ...
  6. Inchmaree Clause

    A clause found in maritime insurance policies which provides ...
Related Articles
  1. Insights

    Is Free Shipping Worth It?

    Should you buy more just so you can save on shipping?
  2. Investing

    Major Companies That Lose Money On Shipping (AMZN)

    We look at some of the big companies in the home delivery business that have high shipping costs and how they mitigate this.
  3. Investing

    Are Shipping Stocks Due For A Rally?

    Several bullish catalysts are lining up in favor of shipping companies. Their current cheapness may not last for long, though, so the time to buy is now.
  4. Insights

    Bulk Shipping Companies Struggle As Markets Soften

    The "soft" dry bulk shipping market that confronts shipping companies is a result of lower demand from China, and an excessive amount of bulk ships.
  5. Personal Finance

    7 Tips For Avoiding Shipping Costs When Shopping Online

    Before clicking on that purchase, make sure you're getting the best deal possible.
  6. Investing

    Bulk Carrier Vs. Container Vs. Tanker: Exploring the 2016 Shipping Market (C)

    Read about the divergent fates of oil tankers, dry bulk carriers, container ships and other seafaring vessels in the 2016 shipping market.
  7. Personal Finance

    Do You Make More Money Than a Cruise Ship Captain?

    As the cruise-ship industry continues to grow, ship captains are in demand, but it's a strenuous and demanding path to the top.
  8. Investing

    Looking to Invest in Oil Tankers? Try These 3 Stocks (NAT, SFL)

    Obtain information on the oil shipping industry, and discover three of the most widely traded oil tanker stocks to obtain exposure to oil shipping.
  9. Personal Finance

    Conventional Mortgage

    A conventional mortgage is any type of homebuyer's load that is not offered or secured by a government entity but rather available through a private lender.
  10. Investing

    Shipping Stocks Encounter Volatility

    Unusually high demand for Capesize vessels to transport iron ore to China means it has not been smooth sailing for all shipping stocks.
RELATED FAQS
  1. What kinds of costs are included in Free on Board (FOB) shipping?

    Find out about free on board shipping, the obligations of parties involved and the costs parties must assume in free on board ... Read Answer >>
  2. What is the difference between cost and freight (CFR) and cost, insurance and freight ...

    Find out about the difference between cost and freight and cost, insurance and freight, two commonly used international trade ... Read Answer >>
  3. If different bond markets use different day-count conventions, how do I know which ...

    A day-count convention is a system used in the bond markets to determine the number of days between two coupon dates. This ... Read Answer >>
  4. What's the Difference Between FHA and Conventional Loans?

    Conventional mortgages require higher credit scores than FHA mortgages. Read Answer >>
  5. Is a person registered for Financial Instruments Business eligible to conduct both ...

    Explore Japan's 2006 Financial Instruments and Exchange Law, and understand how the law affects investment services regulation. Read Answer >>
Hot Definitions
  1. Asset Turnover Ratio

    The amount of sales generated for every dollar's worth of assets in a year, calculated by dividing sales by assets.
  2. Book Value

    1. The value at which an asset is carried on a balance sheet. To calculate, take the cost of an asset minus the accumulated ...
  3. Dividend Yield

    A financial ratio that shows how much a company pays out in dividends each year relative to its share price.
  4. Fixed-Income Security

    An investment that provides a return in the form of fixed periodic payments and the eventual return of principal at maturity. ...
  5. Free Cash Flow - FCF

    A measure of financial performance calculated as operating cash flow minus capital expenditures. Free cash flow (FCF) represents ...
  6. Leverage Ratio

    Any ratio used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to ...
Trading Center