2873
Views

Danish Shipping Says Plan to End International Registry Would be Disastrous

Danish flag
Danish shipping group says ending International registry would be the end of Danish seafarers (Danske Rederier)

Published Feb 20, 2024 8:04 PM by The Maritime Executive

Danske Rederier, one of the oldest and most influential shipping trade groups, has come out swinging against a proposal that would eliminate tax benefits for Danish seafarers as part of a broader scheme to overhaul the government support provided to businesses. The group called the proposals that were presented to the Minister for Industry, Business and Financial Affairs Morten Bodskov a “disaster for Danish shipping.”

A committee of experts was tasked with examining the benefits and cost-saving alternatives for the government. Among the steps they listed in the proposal that they believe could save the government more than $300 million in direct subsidies, they called for the elimination of the Danish International Ship Registry. The scheme was launched in 1988 with broad government support to ensure the future of the Danish seafaring tradition says Danske Rederier highlights. Among the provisions, seafarers whether Danish or foreign citizens, do not pay taxes on their wages earned on Danish ships.

"It will be a disaster for Danish shipping to abolish the DIS scheme," said Anne Steffensen, CEO of Danske Rederier. “It is basically about maintaining Denmark as a large maritime nation with thousands of employees in Denmark. Abolition of the DIS scheme will lead to significant and massive flagging of Danish-flagged ships to neighboring countries and other maritime nations around the world.”

The group recently highlighted that Denmark remains among the top ship-owning and operating nations in the world. As of the start of 2024, they reported while slipping slightly both in operated tonnage and the number of ships under the Danish flag, the country is still ranked tenth worldwide. Danish companies they calculated operated a total of approximately 57.2 million tons, including 22.5 million tons under the Danish flag. This includes 748 ships and more than 100,000 people employed in the maritime cluster, including 7,500 Danish seafarers.

The group cites that the report did not establish a cost saving for the elimination of the benefits for seafarers. They also contend that it did not consider the broader effects for employment ashore and businesses supporting the shipping industry.

“Denmark is a small country, but a maritime superpower,” said Steffensen. “Danish owned or operated ships transport goods to and from all corners of the world.” 

The abolition of the benefits would result in significantly fewer Danish sailors and fewer ships under the Danish flag. Danske Rederier further concludes that without the DIS scheme, the Danish flag would not be competitive compared to other countries, such as Norway, Germany, and Singapore. They predict in the short-term Danish sailors would continue to sail under the flag of a neighboring country. In the longer term, they however said there will be fewer and fewer Danish sailors until they disappear completely.

“The DIS scheme is a crucial part of the framework conditions that make it possible for Danish shipping companies to fly the ships under the Danish flag, employ Danish seamen, and at the same time be competitive on the global market," says Steffensen.

They are calling strongly on the government and parliament not to implement the proposal to eliminate the DIS scheme. In addition to jeopardizing the maritime industry, they conclude it would also undermine Denmark’s role in setting the agenda on key issues such as the fight for ambitious global climate rules.