Swiss Federal Council Approves Guarantee Regulation for Ocean-Going Ships

The Swiss Federal Council has decided on an amendment to the regulation on the guarantee of loans for Swiss ocean-going ships. In 2019, there were detentions of Swiss ocean-going ships, and this should be prevented in the future to avoid a devaluation of the Swiss flag.

(Bern) The Federal Council decided on September 11, 2020, to amend the regulation on the guarantee of loans for financing Swiss ocean-going ships. This is a response to the currently high risk of devaluation of the Swiss flag at sea and the associated risks. The revised regulation will come into force on November 1, 2020.

In 2019, the economic difficulties of a Swiss shipping company led to an above-average number of temporary detentions of Swiss sea vessels in European ports. Therefore, it must be expected that for at least the next two years, the Swiss flag will be downgraded to a list of flags with risky ships in the European area (including Russia and Canada). This classification would affect all ships under the Swiss flag and would have extremely negative consequences. Shipping companies would have to deal with numerous restrictions and ultimately significant financial losses. The risk for the federal government that further guarantees will be drawn would increase further.

Ships without federal guarantees can already avoid the negative consequences of being blacklisted by changing flags. Thanks to the new guarantee regulation, this will now also be possible for ocean-going ships equipped with federal guarantees.

The federal government retains a primary lien on its guarantee even under a foreign flag and continues to have all claims from the usual ship insurances assigned to it. The use of the ships for national supply in case of need is also contractually secured.

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