211
CONFIDENTIAL
2.
Mr JD F Holt, Private Office
MR E P TAYLOR
then P/A
Stadfellow
With reference to my brief of 16 February for Mr Taylor's call this afternoon, the Secretary of State has asked
1.
in what way a Dependent Territory would benefit from setting up as a port of registry for international shipping.
2. The immediate benefits would probably be in the form of an initial registry fee for each vessel and annual dues based on tonnage. If the maximum figures proposed in Mr Ludwig's memorandum ($1.20 and $0.10 respectively) were accepted, and if the whole of Mr Ludwig's fleet were Liberian-registered and were transferred to a Dependent Territory's register, there might be an initial payment of about $2.5 million and an annual income of approximately $150,000. In addition, revenue would be derived from the registration fees of companies which shipowners would have to establish in the territory, and a certain amount of "spinoff" might be obtained from such companies setting up offices, holding board meetings etc in the territory and from legal fees; but unless a large number of shipowners became interested, these additional benefits would not amount to very much.
3.
Against these benefits must be set off the administrative costs of establishing and running a register. The necessary expertise would normally not be available locally and expatriates would have to be hired to man the register (as, eg, the Liberians have done); this would involve a certain capital outlay even before the register was set up. The new register would have to provide a world-wide consular service and a proper ship inspection system. the case of a dependent territory these would presumably be provided by HMG, and this would place a considerable extra burden upon our ship inspection and consular services.
The overall economic benefits to HMG of setting up an international port of registry in a dependent territory will therefore need careful consideration. The DTI take the view that, even if there is a clear financial advantage to the dependent territory when all direct and indirect expenses have been set against receipts, it would still be outweighed by other factors, notably
4.
a) the damage to Britain's reputation as a maritime
nation which would be caused by any lowering of
T
CONFIDENTIAL
1.
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