The Bahamas is in a unique position for the offshore industry, particularly those intending to operate in the Brazilian offshore sector. 

The Bahamas is a signatory of the Convention of Private International Law of 1928 (Bustamante Code), a regional convention of American states. The Bustamante Code is a treaty intended to establish common rules for Private International Law in the Americas. 

The code was solidified during the 6^th Pan American Congress in Cuba in 1928, with the treaty of Havana being attached as an annex to the Bustamante Code.  The treaty is a set of rules which seek to regulate the legal relations of foreign trade among the countries party to the treaty.

The importance of being a signatory to the Bustamante Code became firmly established after the Sao Paulo Court of Appeal held in 2016 that the Liberian mortgage over the OSX3 FPSO Unit was not valid (and accordingly would not be recognised) under Brazilian law. The basis for this decision was that Brazil would only recognise the validity of a mortgage where it is registered in the BMR or in order to give effect to Brazil’s international obligations for the recognition of mortgages which are registered under the laws of a country which is a signatory to either of the Codes.

The Brazilian court’s decision alarmed the Banks and Financial institutions all over the world. The shipowners of the offshore units operating in Brazilian waters scrambled to find a Registry who would provide them relief from the mischief of the famous ‘OSX3 litigation’.  

Currently only two major open registries are signatories of the Bustamante Code. The Bahamas Registry is proud to be of one of them.

The Bahamas Registry, as a responsible flag state, reached out to rescue its clients from the dire consequences of ‘OSX3 litigation’ in an unprecedented manner. The Bahamas Government put into force all the machineries at its disposal, particularly the parliamentary procedures and diplomatic steps that were expedited to sign the Code. On January 23, 2017, the Commonwealth of The Bahamas deposited with the General Secretariat of the Organization of American States the original copy of the instrument of accession to the Convention of Private International Law of 1928, (Bustamante Code). On February 22, 2017, the Convention of Private International Law of 1928 entered into force for the Commonwealth of The Bahamas, as stated by its articles 4 and 6.  

Currently only two major open registries are signatories of the Bustamante Code, The Bahamas Registry is proud to be of one of them. All other major open registries who are currently not a signatory, are unlikely to be qualified in future as well, as one of the preconditions of accession to the treaty is that the flag state must be a member of the OAS  (Organisation of American States). This puts the Bahamas in a unique position for the offshore industry, particularly those intending to operate in Brazilian offshore sector.