Flag of Registry. The flag which is displayed usually on the stern of the vessel is like an indicator or “badge” of the vessel’s national identity or nationality.
The term is also used to indicate the country, under the laws of which the ownership of the vessel is registered or recorded. The country of registry provides some protection of the ship and the ownership in the vessel and also exercises some control over tile vessel such as to ensure that it complies with international safety and pollution prevention regulations. In chartering, the nationality of the vessel may be crucial, for example, if a vessel registered in some “openregistry” country is chartered or ordered to call in a port where industrial and union action may cause delay because of the nationality. One example is a vessel registered in an open registry country such as Panama or Liberia with a crew on board who are not employed under an ITF agreement calling in a country where the maritime unions are affiliated with the ITF.