Question about 'flag of convenience' and fees/taxes

[miamouse]

While poking around wikipedia, I came across this article which states

A specific example of the type of advantage flying a flag of convenience offers is bypassing the 50% duty the United States government charges on repairs performed on American-flagged ships in foreign ports. The accumulated advantages can be significant, for example in 1999, 28 of Sea-Land’s fleet of 63 ships were foreign flagged, saving the company up to 3.5 million dollars per ship per year.

Why would the US penalize it’s own ships for docking for repairs? It seems it would be a disincentive to making necessary repairs.

Also: are there any other examples aside from duty fees on foreign repairs that cause many ships to fly flag of convenience? Because looking at the bottom of that article, it seems like the flag of convenince is an export on it’s own for more than a few countries.

incidentally I am also amazed at how I ended up on that page. I was just looking for the ending for ‘anna and the king’ and ended up at anna leonowens, then uncle toms cabin, then liberia, then flag of convenience…

[Vorpal_Blade]

@miamouse

While poking around wikipedia, I came across this article which states Why would the US penalize it’s own ships for docking for repairs? It seems it would be a disincentive to making necessary repairs.

Also: are there any other examples aside from duty fees on foreign repairs that cause many ships to fly flag of convenience? Because looking at the bottom of that article, it seems like the flag of convenince is an export on it’s own for more than a few countries.

WAG that it has to do with saving US union jobs; i.e., if you don’t do the repairs in the US (which would be done by US workers) then you pay extra. A disincentive to avoid doing the work in the US.

Now, let’s wait for someone who knows what they’re talking about…