Answer
A flag of convenience refers to practice of merchant ships, registering in country different from that of its owners, to take advantage of favorable regulations.
Reasons for opting a FOC (Flag of Convenience)
1.Simpler registration process.
2.Lower registration and administration costs
3.Ship owner can avoid taxes
4.Less stringent requirements
5.Choice of Cheaper crew from International Labor Pool E.g. Marshall Islands, Liberia, Cook islands etc.
Disadvantages of FOC
1.Lower Wages, delayed payment of wages
2.Lower living and working conditions
3.Risk to People and shore.
4.More susceptible for PSC detentions
5.Unsafe vessels, Lower safety standards
6.Less Rest hours.
7.Inadequate quality/ quantity of food/water.
8.FOCs are usually beyond the reach of any single seafarer’s trade unions and ITF.
Open Registry – Allows registration of ships of its own as well as foreign owned ships.