Dr. Mostafa El Rouby Answers: Radical Amendments to Egyptian Maritime Legislation in 2025… An Opportunity to Improve Shipping Efficiency or an Additional Burden on Importers?

Introduction

During 2025, Egypt witnessed one of the most significant packages of legislative modernization relating to commercial vessels in recent years, through the issuance of three integrated laws concerning ship safety, the Egyptian nationality of vessels, and the registration of commercial ships.

From a precise legal perspective, this was not a single comprehensive amendment to Maritime Trade Law No. 8 of 1990. Rather, Law No. 2 of 2025 amended certain provisions of Ship Safety Law No. 232 of 1989, Law No. 3 of 2025 amended certain provisions of Maritime Trade Law No. 8 of 1990, and Law No. 4 of 2025 amended Commercial Ship Registration Law No. 84 of 1949.

This development raises an important economic and legal question: do the new requirements represent an additional burden whose cost may ultimately be passed on to shippers and importers, or do they lay the foundation for a safer, more flexible, and more competitive fleet?

Dr. Mostafa El Rouby believes that the answer does not lie in choosing one of these possibilities in absolute terms. The legislation does indeed impose compliance, inspection, and registration costs on shipowners, charterers, and operators, but it also expands the means by which vessels may operate under the Egyptian flag, establishes clearer registration rules, and raises the level of technical supervision, which may positively affect sector efficiency if implemented in a practical and balanced manner.

Three Laws, Not One

When analyzing the 2025 amendments, it is important to distinguish the function of each law:

Law No. 2 of 2025: concerns ship safety and the technical and age-related conditions for flying the Egyptian flag.
Law No. 3 of 2025: amended the rules governing acquisition of Egyptian nationality by vessels and certain provisions concerning formalization of rights in rem over them.
Law No. 4 of 2025: reorganized aspects of commercial ship registration in a manner compatible with the regime for foreign vessels chartered to Egyptians and increased certain penalties relating to registration.

This legislative integration is what should be assessed when examining the impact of the reform on the maritime transport sector, rather than reducing the entire package to amendments to the Maritime Trade Law alone.

First: Law No. 3 of 2025 and Expanding the Possibilities for Flying the Egyptian Flag

One of the most significant changes introduced by Law No. 3 of 2025 was the amendment of Article 5 of the Maritime Trade Law.

In addition to the traditional case where a vessel is owned by an Egyptian natural or legal person, a foreign bareboat-chartered vessel may now acquire Egyptian nationality throughout the charter period if it is chartered to an Egyptian person for a period of not less than two years.

The Law also regulates the case of a foreign bareboat vessel subject to financial leasing to an Egyptian person and permits it to acquire Egyptian nationality throughout the financial lease period in accordance with the prescribed conditions.

Where there are multiple owners or charterers, the legislature requires the majority of owned or leased shares to be held by Egyptians.

What Is Meant by a “Bareboat Charter”?

In this context, a bareboat-chartered vessel means a vessel chartered without crew and operational outfitting from the original owner, allowing the charterer to undertake its outfitting and operation in accordance with the agreed legal structure.

This system – internationally known in forms of Bareboat Charter – enables a shipping company to operate a vessel without bearing the full capital cost of purchasing it from the outset.

This reveals one of the most important opportunities created by the 2025 amendments: the possibility of expanding the operational capacity of the Egyptian fleet through chartering rather than ownership alone.

The Egyptian Charterer Bears the Responsibilities of the Shipowner

The legislature did not grant the benefit of flying the Egyptian flag without corresponding legal obligations.

The amended Article 5 provides that – without prejudice to the ownership rights over the foreign vessel – the Egyptian charterer in cases of bareboat charter and financial leasing assumes the responsibilities of the shipowner in accordance with the regime established by law.

This is an important point for companies that view chartering merely as a means of reducing the cost of purchasing vessels, because the transfer of operational control may be accompanied by the transfer of a significant range of legal and technical responsibilities.

Accordingly, the maritime charter agreement, insurance, operation, and registration should be reviewed as one integrated framework rather than as separate contracts.

Possibility of Suspending Egyptian Registration When Chartered Abroad

The legislature also introduced flexibility in the opposite direction by permitting suspension of the registration of an Egyptian bareboat vessel where it is chartered for the purpose of registering it under a foreign flag throughout the charter period.

This rule provides greater flexibility in managing maritime assets and operating them under different registration regimes, subject to compliance with the legal procedures of both the flag State and Egypt.

Fees for Formalizing Transactions over Vessels

Law No. 3 of 2025 also amended the first paragraph of Article 11 of the Maritime Trade Law.

It retained the fundamental rule requiring transactions creating, transferring, or terminating ownership or other rights in rem over a vessel to be executed in an official instrument, otherwise they are void.

The Law also regulates the fees for formalizing such transactions on the basis of the vessel’s registered gross tonnage, at one Egyptian pound per ton, subject to the minimum and maximum amounts prescribed by law.

The importance of this amendment lies in providing greater clarity regarding the cost of registering transactions concerning vessel ownership and rights in rem over vessels.

Second: Law No. 2 of 2025 and Stricter Safety Requirements

In contrast with the flexibility introduced by the Maritime Trade Law, Law No. 2 of 2025 strengthened the technical requirements relating to vessel safety.

For a newly built vessel or marine unit, the Law requires, for approval to fly the Egyptian flag, that its drawings and specifications be approved by the competent authority and that construction take place under its supervision or the supervision of an entity entrusted by it for that purpose.

For vessels or marine units registered in a foreign State and intended to fly the Egyptian flag, the legislature established a maximum age limit.

25 years as the general maximum age for foreign vessels and marine units.
20 years for passenger vessels.

The age is calculated from the date of construction recorded in the permanent registration certificate issued by the flag State.

Inspection Before Purchase or Charter

The new regime is not limited to reviewing the vessel’s age.

Before purchasing or chartering a foreign bareboat vessel, a foreign vessel subject to financial leasing, or a marine unit for the purpose of registration in Egypt, the Law requires submission of its drawings and relevant documents to the competent authority.

The vessel is then inspected and surveyed at the expense of the interested party to determine its suitability for the purpose for which it will be used.

This rule effectively prevents compliance with the age limit alone from being sufficient for acceptance. A vessel may fall within the permitted age limit but still be technically unsuitable for the intended operation.

Is the Age Requirement a Burden or a Safeguard?

From the perspective of a vessel owner or operator, the age requirement and technical inspection may increase costs because they limit the ability to purchase or charter older and cheaper vessels.

From the perspective of the shipper, importer, and insurance company, however, the issue has another dimension.

A vessel with greater technical efficiency is, in principle, less exposed to breakdowns and certain forms of delay and accidents. A company may also be better positioned to obtain insurance and deal with ports and international service providers where its fleet complies with technical requirements.

However, exaggeration should be avoided: a vessel’s age alone does not guarantee safety, and an older vessel is not necessarily unsafe if it is properly maintained and technically classed. The legislature therefore appropriately combined the age requirement with an actual inspection of seaworthiness and suitability.

Third: Law No. 4 of 2025 and Reorganization of Registration

Law No. 4 of 2025 completed the framework by amending Commercial Ship Registration Law No. 84 of 1949.

Among the most notable institutional changes was the substitution of the Egyptian Authority for Maritime Safety for the former authorities referred to in the Law in relation to registration and supervision functions.

The Law also regulates the procedures required for registration of a foreign bareboat vessel chartered to an Egyptian or subject to financial leasing throughout the charter period, in accordance with the amendment to Article 5 of the Maritime Trade Law.

Temporary Registration Is Linked to the Charter Period

Where an Egyptian charterer applies to register a foreign bareboat vessel for the purpose of flying the Egyptian flag, registration is linked to the duration of the charter.

Where renewal is sought, the required procedures and documents must be submitted within the prescribed time limits, together with the new charter agreement or other documents required by law.

This point is of practical importance because expiry of registration without proper renewal is not merely a minor administrative violation but may expose the operator to the stricter penalties introduced by the 2025 amendment.

The New Penalties… A Clear Message Regarding Registration

Law No. 4 of 2025 increased the penalties associated with operating vessels under the Egyptian flag without valid registration.

Operating an unregistered vessel under the Egyptian flag is now punishable by imprisonment for a period of not less than three months and a fine of not less than EGP 100,000 and not exceeding EGP 1 million, or either of these penalties, with the possibility of ordering confiscation of the vessel.

The Law also establishes a separate penalty for operating a vessel on the basis of a registration certificate that has expired or become invalid, reaching imprisonment for a period not exceeding one year and a fine ranging from EGP 50,000 to EGP 500,000, or either penalty.

This stricter approach demonstrates that the legislature does not regard registration as a mere formality, but as a fundamental element in determining the vessel’s identity, flag State, and legal responsibilities.

Do Stricter Penalties Benefit the Importer?

The benefit to the importer is not direct. An importer does not become more protected merely because the fine imposed on the shipowner has increased.

However, a more disciplined registration system reduces the risk of dealing with vessels whose legal status is unclear or which operate on the basis of expired certificates.

This is important in international contracts because the flag State, registration, owner, operator, insurance, and technical classification are all matters that may become relevant in the event of an accident, damage, arrest, or compensation claim.

Will the Amendments Reduce Shipping Costs?

None of the three laws provides for a reduction in freight rates, and such a result cannot be guaranteed either legally or economically.

Maritime freight rates are affected by many global factors, including:

Supply and demand for vessels.
Fuel prices.
Geopolitical risks.
Port and canal charges.
Insurance rates.
Voyage lengths and routes used.
Container prices and the carrying capacity of the global fleet.

However, if greater flexibility in chartering and registration results in an increase in the number of vessels available to Egyptian companies and strengthens their competitiveness, it may have a positive effect on transport costs or service quality in the medium term. This is a possible outcome, not an inevitable legal consequence.

Where Might Costs Increase?

Conversely, maritime companies may incur additional costs as a result of:

Technical inspection before registration.
Exclusion of certain older low-cost vessels.
Maintenance and outfitting requirements.
Registration and renewal procedures.
Insurance and compliance with flag State rules.

Some of these expenses may ultimately be reflected in the cost of services, particularly if the legislation is not accompanied by a genuine expansion in supply and competition.

The more accurate question is therefore not: “Will the cost rise or fall?” but rather: Does the cost of compliance generate a return in the form of greater safety, efficiency, and reliability?

Ship Registration Law Alone Does Not Protect the Shipper or Importer

It is important not to confuse legislation regulating the vessel itself with rules governing the carrier’s liability for cargo.

Laws Nos. 2, 3, and 4 of 2025 focus primarily on safety, nationality, registration, and rights in rem over vessels.

The rights of the shipper and consignee in cases of loss, damage, or delay in delivery of cargo are governed – depending on the applicable scope – by the rules of maritime carriage contracts, foremost among them the United Nations Convention on the Carriage of Goods by Sea, 1978, the “Hamburg Rules”, in cases where the Convention applies.

Egypt is a party to the Hamburg Convention, which entered into force for Egypt on 1 November 1992.

An Important Court of Cassation Judgment Concerning the Hamburg Rules

One of the most significant Egyptian judgments in this field is the Court of Cassation ruling in Appeal No. 18493 of Judicial Year 83 – Session of 23 February 2021.

The dispute concerned a shipment discharged at Alexandria Port, and the carrier relied on a clause in the bill of lading exempting it from liability for delay.

The Court of Cassation held that the bill of lading was subject to the Hamburg Convention because the agreed port of discharge was located in a Contracting State, and that the Convention renders void any clause excluding its application or exempting the carrier from liability for loss resulting from loss of or damage to the goods or delay in delivery in violation of its provisions.

It is important to emphasize that this judgment predates the 2025 amendments and does not constitute an application of them, but it complements the legal framework protecting cargo interests within the Egyptian maritime transport system.

Why Does the Court of Cassation Judgment Matter to Importers?

The significance of the judgment lies in demonstrating that a carrier cannot always include a clause in a bill of lading and treat it as sufficient to exclude liability imposed by an applicable international convention.

At the same time, the Hamburg Rules do not mean that the carrier is liable in every circumstance without limitation. The carrier has defenses and limits of liability under the Convention, and each incident must be examined according to its circumstances and documents.

Accordingly, protection of the importer begins with reviewing the bill of lading, the applicable law, and the applicable convention, rather than simply assuming that every clause imposed by the carrier is either valid or invalid.

The Amendments Are More of an Opportunity for Maritime Investors Than a Direct Benefit for Importers

A reading of the three laws shows that the principal direct beneficiary of certain forms of new flexibility is the maritime company or investor seeking to expand its fleet.

Instead of purchasing the vessel outright, it is now possible to use bareboat charter and financial leasing structures in accordance with the legal conditions and to fly the Egyptian flag on such vessels.

The importer benefits indirectly if this flexibility leads to increased choice, improved services, greater competition, and reduced operational risks.

This distinction is important so that the legislative reform is not presented as a direct incentive for importers when, in reality, it is a reform of the legal structure governing the fleet and registration.

Marine Insurance Remains a Critical Element

Even where the vessel is properly registered and inspected, insurance remains one of the most important risk-management tools.

Companies transporting high-value cargo should review:

The cargo insurance policy.
The scope of coverage.
Exclusions relating to war and geopolitical risks.
The method for notifying incidents.
Survey procedures and proof of damage.

Legislation that raises the vessel’s safety standards does not replace cargo insurance, just as insurance does not replace review of carrier liability.

What Should a Shipping Company Review After the 2025 Amendments?

Dr. Mostafa El Rouby believes that practical compliance with the legislative package requires review of a number of fundamental matters:

The legal status of each vessel: ownership, charter, financial lease, and flag State.
The vessel’s age: and whether it complies with the statutory limits upon new registration.
The technical condition: without relying solely on the age requirement.
Validity of the registration certificate: and renewal deadlines before expiry.
Charter agreements: particularly where foreign bareboat vessels are operated.
Insurance: and whether the policies correspond to the nature of the operation and the charterer’s responsibilities.
Transactions concerning the vessel: and ensuring that rights in rem are formalized in the legally required form.

What Should the Importer or Shipper Review?

The cargo owner does not need to conduct the same regulatory inspection performed by the shipping company, but should conduct appropriate commercial and legal due diligence on the carrier, particularly for high-value shipments.

It is useful to review:

The identity of the actual contractual carrier.
The bill of lading and its terms.
The voyage route and transshipment ports.
Cargo insurance.
The applicable law.
Limits of carrier liability.
Time limits for notices and claims.
The jurisdiction or arbitration clause.

A vessel may be safe and properly registered while the transport contract itself is drafted in a manner that creates substantial commercial or legal risk for the cargo owner.

Maritime Contracts Need to Be Updated

Companies should not limit their response to the 2025 amendments to completing administrative files before the competent authorities.

If a company’s legal status changes from owner to bareboat charterer, or if a financial leasing structure is introduced, the contracts associated with operation, insurance, technical management, crew, and services require review.

It is also important that transport contracts and bills of lading be free from provisions that conflict with mandatory rules or applicable international conventions.

Will Egypt Become More Attractive as a Flag State?

One objective of the new flexibility is to increase the ability of Egyptian companies to operate vessels under the Egyptian flag without always requiring full financing for the outright purchase of the vessel.

However, the attractiveness of a flag does not depend on nationality law alone, but on a broader framework including:

Speed of registration procedures.
Efficiency of inspection.
Operating costs.
Taxation and financing.
Ports and maritime services.
Availability of qualified crews.
The flag’s reputation in international regulatory oversight.

Accordingly, the success of the 2025 amendments should be measured in the coming years by the number and quality of vessels that the system actually succeeds in attracting, not merely by the issuance of the legislation.

Dr. Mostafa El Rouby’s Recommendations

Dr. Mostafa El Rouby believes that the best use of the legislative reform requires moving from “compliance after violation” to proactive compliance.

Among the most important recommendations are:

Conducting legal and technical due diligence on the fleet to identify vessels requiring regularization of their status.
Reviewing bareboat charter and financial leasing agreements and linking them to the charterer’s new responsibilities.
Establishing an internal system for monitoring registration dates and certificates to prevent operation of a vessel under an expired document.
Reviewing marine insurance coverage following any change in flag, ownership, or operational management.
Formalizing transactions creating or transferring rights in rem over vessels in the official form required by law.
Reviewing bills of lading and transport contracts to ensure their compatibility with the Hamburg Rules where applicable.
Training legal and operational departments on the new amendments, because registration errors now carry significant criminal and financial consequences.

The Role of the Office of Dr. Mostafa El Rouby – Attorneys and Legal Consultants

The Office of Dr. Mostafa El Rouby – Attorneys and Legal Consultants believes that the 2025 package requires an approach combining vessel law with maritime transport law, because proper registration of a vessel does not by itself determine its liability for cargo, just as a well-drafted transport contract does not remedy a vessel’s violation of registration and safety rules.

Legal support in this field includes:

Reviewing vessel ownership and charter structures.
Drafting and reviewing Bareboat Charter and financial leasing agreements.
Reviewing registration documents and procedures for flying the Egyptian flag.
Formalizing transactions and rights in rem over vessels.
Reviewing transport contracts and bills of lading.
Assessing the application of the Hamburg Convention to maritime disputes.
Managing cargo damage and delay claims.
Reviewing insurance policies and liability coverage.
Representing clients in litigation and arbitration relating to maritime transport and trade.

Conclusion: Opportunity or Burden?

A reading of Laws Nos. 2, 3, and 4 of 2025 shows that the Egyptian legislature adopted two parallel approaches: greater flexibility in structuring and operating the fleet, in exchange for stricter supervision of safety and registration.

On the one hand, the Law permits foreign bareboat vessels chartered to Egyptians, as well as financially leased vessels, to acquire Egyptian nationality subject to specified conditions, providing companies with a model less dependent on direct ownership.

On the other hand, the Law imposes age limits and technical inspection requirements and increases penalties for operating without valid registration.

This means that transport companies face a genuine compliance cost, but that cost is not necessarily negative if it leads to the exclusion of unfit vessels, improved fleet reliability, and expanded investment options.

For shippers and importers, the amendments should not be presented as a direct guarantee of lower prices or prevention of cargo damage, as such outcomes depend on numerous operational and economic factors.

However, legally and technically more disciplined vessels, together with clear rules governing carrier liability and protection of cargo interests, can in the long term create a more predictable and trustworthy transport system.

Accordingly, Dr. Mostafa El Rouby believes that the success of the 2025 amendments should not be measured merely by their strictness, but by their ability to achieve a precise balance: expanding the fleet without compromising safety, and raising the level of compliance without turning regulatory costs into an obstacle to competition and investment.

Written and Prepared by: Dr. Mostafa El Rouby