What is meant by the term "flag of convenience"?

The term "flag of convenience" refers to a practice where a ship registers under a foreign country's flag, often to take advantage of more favorable regulations, tax benefits, or lower operating costs compared to the shipowner’s home country. This can be appealing as it allows shipowners to avoid stricter international regulations, safety requirements, or labor laws that might be enforced in their own country.

By using a flag of convenience, the ship can operate within a legal framework that may have few or less stringent requirements, making it a cost-effective choice. This practice is common in the shipping industry and has implications for labor rights and environmental protection, as it can lead to a lack of accountability regarding working conditions and adherence to safety standards.

While the other options discuss aspects related to ship registration, only the concept of registering a vessel in a country with less regulatory oversight accurately captures the essence of what a flag of convenience entails.