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Research Project Report

Research Project Report 상세보기
Legal and Institutional Improvement Measures for Cruise Ship Operation
Report No. 2013-01 Research Manager Hwang Jin Hoi
File


Legal and Institutional Improvement Measures for Cruise Ship Operation


1. Purpose
○ The study analyzes legal obstacles to entry or departure of national flag cruise ships.
- Compared to high interest in and plans for emerging international cruise market and cruise, level of relevant infrastructure, policy and the rule of law in Korea remains low. 
- It is necessary to improve regulations and institutions on national flag cruise ships. operation, preparing for domestic cruise industrial development and constant increase of national flag cruise ships.
○ The study helps development of the Korean cruise industry with its measures for institutional improvement.
- The recent launch of the national flag cruise ships company highlighted problems in cruise ship operation, which required improvement measures.


2. Methodologies and Feature
1) Methodologies
○ To analyze preceding studies on cruise
○ To conduct comparative analysis on relevant regulations and institutions of other countries, such as the US, Japan and China 
○ To interview executives and staff in the cruise industry and to consult with outside experts
2) Feature
○ This policy study is focused on upgrading regulations and institutions for cruise ship operation, the core component of the cruise industry.
○ The study presents practical policy measures by involving experts in the cruise industry.
- The study referred to interviews with legal experts while reviewing legal obstacles to cruise ship operation and developing improvement measures. It also interviewed executives and staff in the domestic and international cruise industry to identify the current cruise operation and other problems.


3. Results
1) Summary
○ The study presented legal and institutional improvement measures for cruise ship operation.
- For conversion of foreign merchant ships to coaster ships: to minimize procedures over entering inner/outer ports by cruise ships based on characteristics of cruise ship operation
- For commodity within cruise ships: to regard such commodity as ‘articles for ships’
- For upgrading of the Immigration Control Act: to apply the uniform landing permission system to ship crew of cruise ships
- For upgrading of the Seafarers Act: employment standards for foreign crew cannot be applied uniformly under the current Seafarers Act.
○ Since cruise ships are more expensive than general merchant ships, outside capitals are often borrowed. Therefore, financially supportive measures are necessary to secure cruise ships.
- According to the current operation of the Tourism Promotion Development Fund, large cruise companies which don’t require loan necessarily are enjoying supportive measures, while small and medium-sized cruise companies which are desperate for loan are shunned.  
- Therefore, the Tourism Promotion Development Fund should be revised to correspond to current practices of shipping industry.  
- Governmental financing organizations need to prepare foundations in which collateral values of ships can be recognized according to the Bare Boat Charter with a Hire-Purchase (BBCHP) contract. BBCHP contract are generally used for ship purchase.
○ The study suggested legislative measures and policy tasks for better service within and outside of cruise ships.
- Legislative improvements (as for casinos): If relevant laws are under review to upgrade the Korean cruise industry and its competitiveness, legal foundation which allows casino operation within cruise ships should be prepared, along with system for regulations and policy tasks.
- Policy tasks: Roadmaps to establish and operate training centers for cruise professionals; foundation for operation cost supports for cruise terminals
2) Policy contribution
○ The study can be used as basic material in setting policy direction for legal and institutional improvements for cruise ship operation.
○ It can be referred to when  the Special Act on Cruise Industry Development is enacted.
3) Expected benefits
○ The study encourages enactment of the Special Act on Cruise Industry Development.
- Relevant laws on cruise were kept in order, preparing legal foundation for cruise business permission. However, they lacked detailed provisions about cruise businesses and had complex regulations, raising difficulties for companies.
- Therefore, a master plan should be prepared on development of national cruises. For their effective operation, relevant regulations scattered over the Marine Transport Act, the Tourism Promotion Act and the leisure and Ferry Business Act should be unified. Moreover, procedures involving subsidiary facility permits should be streamlined under law.
○ The study will upgrade supports for national cruise company development.
- For development of national cruise companies, their higher market share and cost reduction, financially supportive measures should be prepared to help them secure ships. The tonnage tax system and temporary supply of tax free oils are also required for cruise companies.

Research Project Report 상세보기
Legal and Institutional Improvement Measures for Cruise Ship Operation
Report No. 2013-01 Research Manager Hwang Jin Hoi
File


Legal and Institutional Improvement Measures for Cruise Ship Operation


1. Purpose
○ The study analyzes legal obstacles to entry or departure of national flag cruise ships.
- Compared to high interest in and plans for emerging international cruise market and cruise, level of relevant infrastructure, policy and the rule of law in Korea remains low. 
- It is necessary to improve regulations and institutions on national flag cruise ships. operation, preparing for domestic cruise industrial development and constant increase of national flag cruise ships.
○ The study helps development of the Korean cruise industry with its measures for institutional improvement.
- The recent launch of the national flag cruise ships company highlighted problems in cruise ship operation, which required improvement measures.


2. Methodologies and Feature
1) Methodologies
○ To analyze preceding studies on cruise
○ To conduct comparative analysis on relevant regulations and institutions of other countries, such as the US, Japan and China 
○ To interview executives and staff in the cruise industry and to consult with outside experts
2) Feature
○ This policy study is focused on upgrading regulations and institutions for cruise ship operation, the core component of the cruise industry.
○ The study presents practical policy measures by involving experts in the cruise industry.
- The study referred to interviews with legal experts while reviewing legal obstacles to cruise ship operation and developing improvement measures. It also interviewed executives and staff in the domestic and international cruise industry to identify the current cruise operation and other problems.


3. Results
1) Summary
○ The study presented legal and institutional improvement measures for cruise ship operation.
- For conversion of foreign merchant ships to coaster ships: to minimize procedures over entering inner/outer ports by cruise ships based on characteristics of cruise ship operation
- For commodity within cruise ships: to regard such commodity as ‘articles for ships’
- For upgrading of the Immigration Control Act: to apply the uniform landing permission system to ship crew of cruise ships
- For upgrading of the Seafarers Act: employment standards for foreign crew cannot be applied uniformly under the current Seafarers Act.
○ Since cruise ships are more expensive than general merchant ships, outside capitals are often borrowed. Therefore, financially supportive measures are necessary to secure cruise ships.
- According to the current operation of the Tourism Promotion Development Fund, large cruise companies which don’t require loan necessarily are enjoying supportive measures, while small and medium-sized cruise companies which are desperate for loan are shunned.  
- Therefore, the Tourism Promotion Development Fund should be revised to correspond to current practices of shipping industry.  
- Governmental financing organizations need to prepare foundations in which collateral values of ships can be recognized according to the Bare Boat Charter with a Hire-Purchase (BBCHP) contract. BBCHP contract are generally used for ship purchase.
○ The study suggested legislative measures and policy tasks for better service within and outside of cruise ships.
- Legislative improvements (as for casinos): If relevant laws are under review to upgrade the Korean cruise industry and its competitiveness, legal foundation which allows casino operation within cruise ships should be prepared, along with system for regulations and policy tasks.
- Policy tasks: Roadmaps to establish and operate training centers for cruise professionals; foundation for operation cost supports for cruise terminals
2) Policy contribution
○ The study can be used as basic material in setting policy direction for legal and institutional improvements for cruise ship operation.
○ It can be referred to when  the Special Act on Cruise Industry Development is enacted.
3) Expected benefits
○ The study encourages enactment of the Special Act on Cruise Industry Development.
- Relevant laws on cruise were kept in order, preparing legal foundation for cruise business permission. However, they lacked detailed provisions about cruise businesses and had complex regulations, raising difficulties for companies.
- Therefore, a master plan should be prepared on development of national cruises. For their effective operation, relevant regulations scattered over the Marine Transport Act, the Tourism Promotion Act and the leisure and Ferry Business Act should be unified. Moreover, procedures involving subsidiary facility permits should be streamlined under law.
○ The study will upgrade supports for national cruise company development.
- For development of national cruise companies, their higher market share and cost reduction, financially supportive measures should be prepared to help them secure ships. The tonnage tax system and temporary supply of tax free oils are also required for cruise companies.

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