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Laws and logistics: Jamaica in the shipping industry
Jamaica's current legislative framework is such that the State has the potential to experience significant economic growth if it becomes a major logistics hub with immense marine traffic.
Business, Business Observer
February 12, 2025

Laws and logistics: Jamaica in the shipping industry

THE experience of judging at the World Universities Debating Championships 2025 in Panama was a refresher on Jamaica’s potential for growth, firstly because the topics debated challenged participants to configure and analyse policies that could foster a nation’s improvement, and secondly because seeing the famous Panama Canal was a reminder of aspirations for Jamaica to be a global logistics hub.

Unlike Panama, Jamaica is not the isthmus linking Central and South America and therefore a convenient passage for ships to significantly shorten the journey between the Atlantic and Pacific oceans. Without that advantage Jamaica needs to create the kind of environment that attracts ships and commerce to be a major logistics hub in the shipping industry. That kind of environment depends heavily on our legal framework and the ease with which stakeholders can traverse and do business in Jamaica, including in the nation’s waters.

Contrary to popular belief, Jamaica is no longer an island. Jamaica was declared an archipelagic state under Section 3 of the Maritime Areas Act, and the State of Jamaica is comprised of multiple islands. Jamaica’s archipelagic baselines are depicted by drawing an imaginary line linking the outermost point of the main island of the State and that of the outermost islands of Morant Cay and Pedro Bank Cay. The area of the Caribbean Sea that is within the baselines of the State is the State’s archipelagic waters. Jamaica’s territorial sea then extends to 12 nautical miles from the State’s archipelagic baselines. Ships in Jamaica’s archipelagic waters and territorial sea are subject to the State’s laws and jurisdiction.

The Shipping Act is among several pieces of legislation relevant to ships in waters subject to Jamaica’s sovereignty. This statute established the Maritime Authority of Jamaica and entrusts the authority with the duty to

(a) administer the registration of ships;

(b) regulate the certification of seafarers;

(c) regulate the safety of shipping as regards the construction of ships and navigation;

(d) administer policy for the development of shipping in general;

(e) inspect ships for the purpose of maritime safety and prevention of marine pollution;

(f) establish maritime training and safety standards; and

(g) make enquiries as to shipwrecks or other casualties affecting ships, or as to charges of incompetence or misconduct on the part of seafarers in relation to such casualties.

A great number of ships that go through a logistics hub may just be in transit but it can be lucrative for foreign ships to trade in a jurisdiction that has heavy marine traffic. Jamaica may be considered an ideal location to provide bunkering (or fuelling) services, for example, for foreign ships since it is close to the Panama Canal and has deep enough waters to accommodate large ships. A foreign vessel that engages in local trade in Jamaican waters is required to have a local trade certificate issued under the Shipping (Local Trade) Regulations. “Local trade in Jamaican waters” is defined as the transport locally of passengers or goods or the carrying out of any other operation or activity, locally, within Jamaican waters for the purposes of trade, profit or reward.

While it plays a major role, Maritime Authority of Jamaica is just one of several other regulators or government agencies relevant to Jamaica’s shipping industry. That authority works with Spectrum Management Authority to assist ship operators have access to spectrum, which they may need to transmit wireless signals in using communication devices on their vessels. Ships that enter Jamaica’s harbours and ports are subject to legislation such as the Harbours Act, Harbour Fees Act, and Pilotage Act. Harbours and ports are controlled spaces that are regulated, developed, and maintained by The Port Authority of Jamaica and Marine Board. Another significant player in the State’s shipping industry is the Jamaica Customs Agency, which monitors goods imported and exported and collects duties and fees with respect to such goods.

The Jamaica Special Economic Zone Authority is also relevant as logistics and supply chain management is one of the priority industries in the context of establishing special economic zones. A geographical area may be designated a special economic zone within which certain persons (namely, “developers” and “occupiers”) would be allowed to benefit from tax incentives. Such incentives include a reduced corporate income tax rate and exemptions from customs duty, transfer tax and General Consumption Tax, subject to conditions. Foreign investors can take advantage of these benefits, provided they comply with all the prerequisites to obtaining such advantages. Technically, a vessel floating on water could be designated a special economic zone, if it can be deemed a fixed geographical area such as by affixing the vessel to the seabed.

Jamaica’s current legislative framework is such that the State has the potential to experience significant economic growth if it becomes a major logistics hub with immense marine traffic. Sources of revenue could include registration and renewal fees under the Shipping Act and its regulations, applicable fees for use of ports and harbours, spectrum licence fees, fees and duties payable to the Jamaica Customs Agency, and the annual licence fees payable by a developer to Jamaica Special Economic Zone Authority. Increased employment and business opportunities for Jamaicans would also be a likely outcome.

With that in mind, our legal infrastructure can be improved. In addition to reviewing and strengthening current legislation, Jamaica could take steps such as signing and ratifying the United Nations Convention on the International Effects of Judicial Sales of Ships. This could help to prevent occurrences such as a ship properly sold by judicial sale in a Jamaican court being unlawfully rearrested in another jurisdiction, in relation to the same debt that the Jamaican court had already ruled on. Taking such actions would further demonstrate that Jamaica is serious about being a global logistics hub and a safe space for foreign ships and commerce.

 

Kimberley Brown is an associate at Myers, Fletcher and Gordon and a member of the firm’s commercial department. She may be contacted at kimberley.brown@mfg.com.jm or through the firm’s website www.myersfletcher.com. This article is for general information purposes only and does not constitute legal advice.

Kimberley Brown.

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