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Reduction in sulphur oxides emissions: legislative intervention reaps positive results

The International Maritime Organisation (IMO), which is responsible for overseeing ship safety and security and the prevention of water and sea pollution from ships, decided in 2017 to intervene legislatively with the intent to reduce the amount of sulphur dioxide generated by the shipping industry. The legislative intervention came in the form of the implementation of a sulphur content limit called “IMO 2020”, which ultimately ensures minimal environmental impact by the industry and safeguards human health.

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More new build LNG carriers join the Malta flag

Fenech & Fenech Marine Services Ltd are delighted to have assisted with the reflagging of a series of four 174,000 cbm new build LNG carrier vessels to the Malta flag. These vessels are not only a contribution to the Malta flag in terms of tonnage but also a clear reflection of clients’ confidence in the flag’s technical capabilities with respect to such sophisticated vessels.


The Ship Finance team within Fenech & Fenech Advocates are proud to have also assisted with the financing aspect of this transaction.


We look forward to continue to support owners and managers with all their Malta flag related requirements.


For further information on Malta flag registration matters please contact Rowena Grima or Stephanie Farrugia at Fenech & Fenech Marine Services Ltd by telephone (+356 2124 1232) or email ( and )

Impact of IMO 2023 on Malta flagged vessels

The success of the IMO’s 2020 sulphur cap set the tone for the shipping industry’s decarbonisation goals and the momentum built over the past three years has served as a catalyst for the introduction of new IMO 2023 Regulations. The amendments to the MARPOL Annex VI came into force on 1 November 2022 and were implemented on 1 January 2023, introducing new rules that target vessel efficiency aspects and carbon intensity, which have become mandatory for certain categories of Malta flagged vessels.

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The Corporate Sustainability Reporting Directive (CSRD) finally comes into force

After much anticipation, the Corporate Sustainability Reporting Directive (CSRD) finally came into force on 5 January 2023. The CSRD revises, broadens and strengthens the rules originally introduced by the Non-Financial Reporting Directive (NFRD) by introducing a standardised and common language for sustainability information and bringing sustainability reporting on par with financial reporting. Member States now have 18 months to transpose the provisions of the CSRD into national law (i.e. by 4 July 2024 at the latest).

The CRSD is a significant step towards the goals set out by the EU in the European Green Deal. It will require several companies operating in the EU to publicly disclose and report on environmental, social, and governance (ESG) issues, thereby making them more transparent in their commitments to sustainability. The CSRD aims to achieve this by: (i) extending the scope of mandatory ESG reporting to all large companies and SMEs listed on regulated markets; (ii) requiring independent auditing of ESG reports; and (iii) implementing mandatory ESG standards with more detailed reporting requirements.

The obligations under the CSRD apply to companies listed on EU regulated markets (except listed micro-undertakings) as well as all companies based in the EU that meet at least two of the following criteria: (i) employ more than 250 employees; (ii) have a net turnover which exceeds €40 million; (iii) have total assets which exceed €20 million. The CSRD also applies to non-EU companies that generate revenues within the EU of more than €150 million, as well as those non-EU companies that have large or listed EU subsidiaries or significant EU branches generating more than €40 million in revenues. It is anticipated that these thresholds would capture around 50,000 companies that are currently active.

Companies within the scope of the CSRD will need to report on the impact of their activities on sustainability, as well as how sustainability issues affect their own business – the so-called ‘double materiality principle’. Reporting will have to be in line with European Sustainability Reporting Standards (ESRS) that will be developed by the European Financial Reporting Advisory Group (EFRAG). The first set of ESRS’ (Set 1) is currently being worked on by the European Council with a view to being adopted by 30 June 2023 and will focus on information that is likely to be relevant to all companies regardless of the sector(s) they operate in. Further, more sector-specific standards will be adopted down the line.

The reporting obligations under the CSRD will be rolled out over several years. Companies already subject to the NFRD must produce their first report in 2025, relating financial year 2024. Large companies not presently subject to NFRD will have to abide by CSRD reporting obligations from financial years starting on or after 1 January 2025 and thus first report in 2026. The CSRD will also be applicable to listed SMEs for financial years starting on or after 1 January 2026, although such companies may opt-out of their CSRD reporting obligations until 2028.

The CSRD does not directly stipulate sanctions for non-compliance. However it does provide that Member States should impose administrative pecuniary sanctions and penalties that are ‘“effective, proportionate and dissuasive’” and which take into account the gravity and duration of the breach, the degree of responsibility, the financial strength of the company, the importance of profits gained or losses avoided through the breach, losses sustained by third parties, the level of cooperation by the company, and whether it had any previous infringements.

The reporting obligations introduced by the CSRD are considerably onerous and detailed, as businesses will need to comply with more demanding transparency obligations on their commitment to sustainability. This will also extend to companies that are not directly captured by the scope of the CSRD but who are in business with such companies, as they will likely face increased pressure to also provide sustainability information in view of the CSRD obligation for captured businesses to consider the entire value chain. It is thus crucial for all businesses to take the time to consider the implications of the CSRD and to prepare well in advance for the moment when the CSRD requirements are eventually transposed into national law.


Luca Amato is a senior associate within the Corporate and Commercial Law department of Fenech & Fenech Advocates.


FFMS is delighted to have assisted with the delivery and registration under the Malta flag of the two latest additions to the MSC Cruise fleet: MSC World Europa & MSC Seascape. Whilst contributing over 200,000 gross tonnes to the Malta Registry, the MSC World Europa is also the first in her class to be equipped with Liquified Natural Gas (LNG) propulsion systems. With the intent of setting new standards for the cruise industry, this vessel has also been designed to include advanced waste management systems, anti-fouling paints and underwater-radiated noise control, making her the most environmentally sustainable cruise ship in the MSC cruise fleet. MSC are fully committed to provide a luxurious yet sustainable experience for their passengers.

The delivery of MSC World Europa has coincided with the 2022 World Cup event and owners have coordinated the vessel’s maiden voyage to Doha, where she was employed as a floating hotel for FIFA world cup fans. The Malta flag flying high above this spectacular vessel has attracted the attention of many visiting the country including Malta’s Minister for Foreign and European Affairs and Trade who was invited on board to tour the vessel.

Less than three weeks following the delivery of MSC World Europa, Fenech & Fenech Marine Services Ltd were once again busy assisting with the delivery and registration of the MSC Seascape. This is the second Seaside EVO vessel to join the fleet this year and aside from its remarkable dimensions, she boasts the latest marine technological innovations. Once again, MSC are setting a fine example for the industry by designing a vessel with the most innovative technology with a goal to reaching net-zero emissions.

Fenech & Fenech Advocates’ Ship Finance department are also delighted to have once again assisted MSC with the financing aspects of these two vessels.

A Bill seeking to amend the Employment and Industrial Relations Act

A Bill seeking to amend Chapter 452 of the Laws of Malta, the Employment and Industrial Relations Act (‘the Act’), has been tabled before the House of Representatives. The Bill seeks to partially transpose Directive (EU) 2019/1152 on transparent and predictable working conditions, most notably as regards the probationary period of fixed-term contracts.

The Bill seeks to impose proportionality between the length of the probationary period and the length of the fixed-term contract, as well as the nature of the role.

The proposed law clearly stipulates that in the case of a renewal of a fixed-term contract for the same function and task previously assigned to the employee, such employment relationship shall not be subject to a new probationary period.

The Bill proposes the following most noteworthy amendments:
1. No fixed-term contract shall be shorter than six (6) months unless a shorter period is justified by objective reasons based on precise and concrete circumstances characterising a given activity.
2. Whenever an employer intends to enter into an employment contract for a fixed term with a prospective employee for a period shorter than six (6) months, the employer must provide for the objective reasons for which the contract is entered into for less than six (6) months within the employment contract.
3. In a fixed term contract of between six (6) months and fifteen (15) months duration, the probationary period shall be calculated on the basis of two (2) months probationary period per six (6) months contract duration.
4. If the fixed term contract is shorter than six (6) months, the probationary period shall be one-third of the duration of the same fixed term contract.
5. In a fixed term contract exceeding fifteen (15) months duration, the probationary
period shall be of six (6) months maximum.
6. Workers holding technical, executive, administrative or managerial positions and whose wages are at least double the national minimum wage established that year shall be on probation for a period of twelve (12) months.
7. The employer and employee may always agree to a shorter probationary period than that set out in terms of law.
8. The probationary period shall be suspended in the case of any two (2) weeks or more of approved leave, in which case the probationary period shall be extended to a corresponding duration of the leave. Indeed, it shall be unlawful for an employer to dismiss a worker during the period of suspension of probation.

The newly proposed rules will therefore disallow the common practice of imposing a probationary period for the full period of the fixed-term contract. This common practice has had the effect of vitiating the penalty imposed at law on the terminating party in a fixed-term contract for the payment of half of the wages that the employee would have otherwise been due for the remaining period of the fixed-term contract, in case of no good and sufficient cause for termination.

The Bill is still being discussed at a legislative level and further amendments to such Bill may therefore be implemented. We shall continue to monitor developments on this front and shall be issuing further updates on the subject.

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