Primarily one is to note that foreign mortgages are recognised and granted the same status as mortgages under the Maltese Shipping Act provided such foreign mortgages are validly recorded in terms of the relevant foreign law and certain other conditions are fulfilled.

With regards to Malta, the registration, transfer, amendment and discharge of mortgages may be effected immediately on the presentation of the relative documents to the Registrar (the 1986, 1988, 1990 and 2000 amendments introduced important safeguards in respect of registered mortgages thus making financing of Maltese ships more attractive.)

Maltese mortgages provide good security for banks and other financial institutions because they enjoy a high ranking position and furthermore a ship-owner may not delete a vessel from the Maltese register without the mortgagee’s prior written consent and for a vessel to be struck off the register 1 month’s notice is to be given to the mortgagee and ship-owner by the Registrar of Shipping.

A mortgagee may take over and complete registration formalities himself in order to protect the status of the ship and the validity of its registration and the law also binds the Registrar of Shipping upon the transfer of a vessel to new Maltese owners, to inform the mortgagee of such transfer and the vessel may not be sold to foreign nationals without the mortgagee’s consent.

Further advantages in Malta are that mortgages may be enforced without the need of lengthy Court proceedings and that the mortgage attaches to any insurance proceeds and with regards to subsequent mortgages a mortgagee may prohibit the registration, without his prior written consent, of second or subsequent mortgages by including a relevant clause in the registered Mortgage Deed.