Flag of Convenience (FOC)

The Flag of Convenience is a practice in which the owner of a ship registers the vessel in a country other than their own. The ship then flies the civil ensign of that country - this country is known as the flag state. This is a tactical business decision as vessels that are registered under ‘flags of convenience’ are able to cut operating costs or bypass stricter regulations in the owner’s country. Not all countries allow this practice so a shipowner will need to find a country that has an open ship registry, or a nation that allows vessels owned by foreign entities to be registered. Some countries are well-known for this; Panama is one.