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The Russian Government has submitted to the State Duma a bill to extend until 2037 the period of zero insurance premiums for payments and remuneration to crew members of vessels registered in the Russian International Register of Ships (RMRS). The document has been posted in the legislative support system.
The exception will apply to vessels used for the storage and transshipment of oil, petroleum products and liquefied natural gas (LNG) in Russian seaports.
As stated in the explanatory note, the extension of the benefit will create favorable conditions for the development of the transport fleet and civil shipbuilding in the Russian Federation.
Initially, the law on establishing a zero insurance premium rate was adopted in 20211 for the period 2012-2027. According to the government's calculations, this allowed the number of vessels registered with the RMRS to increase by 2.7 times, and the total deadweight of the fleet increased by more than 4.4 times. Over $3 billion in private investment was attracted to the country's economy during this period for the construction of the transport fleet alone.
The payers of the extended benefits are shipping companies.
"The maintenance of crews in the context of the growing shortage of qualified marine personnel is one of the main components of the operating expenses of shipping companies, reaching 40-50%. Moreover, the presence of mandatory payments to the Pension and Social Insurance Fund of the Russian Federation, as well as the Federal Compulsory Medical Insurance Fund, is one of the decisive restraining factors on the way to registering offshore vessels controlled by Russian shipping companies under the Russian flag in the RMRS. When re-registering a vessel from the flag of a country with open registration to the Russian flag with registration in the RMRS, the shipowners' expenses for the maintenance of the crew increase to 30% in the absence of government support measures," the explanatory note says.
At the same time, unlike other industries, the activities of the maritime fleet are carried out to a greater extent on the international market of transport services, which means that Russia is a supplier of qualified personnel to fleets around the world at a time when these specialists are in great demand in the domestic fleet. "The current tax pressure leads to an outflow of qualified personnel from Russia," the document adds.
"As Russian and international practice shows, sailors choose the flags of those countries that provide not only the minimum level of social security, but also more attractive financial conditions. In this regard, the extension of this benefit until 2037 will contribute to the creation of more favorable financial and economic conditions for Russian shipping companies registering vessels in the RMRS, which, in turn, will stimulate Russian shipowners to place orders for the construction of a new fleet at Russian shipyards and ensure the necessary level of competitiveness of ships under the domestic flag, as well as increase the motivation of shipboard specialists to work on Russian ships," the Cabinet of Ministers noted.
As IAA PortNews reported earlier, the law, which envisaged a number of measures to support Russian shipbuilding and shipping, was signed in November 2011. The document established a norm on a zero rate (for a period of 15 years) of insurance premiums paid by ship owners for crew members of vessels with compensation for these premiums from the state budget of the Russian Federation. Then ship owners were given the opportunity to pay only the tonnage fee, and crew members - only the personal income tax .
Prime Minister Mikhail Mishustin announced his intention to extend the benefit at a government meeting on July 18, 2024.
