THAILAND'S maritime industry is soon to be upgraded by a new law that enables Thai shipowners to mortgage a ship with a financial institution. The Ship Mortgage and Maritime Liens Bill is expected to be introduced at the beginning of next year. A source at the Transport and Communications Ministry said that the House of Representatives has already passed the Bill and the Cabinet will present the Bill to the King for his approval and implementation afterwards, according to the Thai newspaper Nation. The law, which recognises a ship as a fixed asset, will enable financial institutions to accept ship mortgages as they will be confident of receiving repayment if there are any problems with the ship or shipowner. Thailand, which currently has the smallest fleet of any ASEAN (Association of Southeast Asian Countries) members, is also expected to see an expansion in its fleets. Currently more than 90 per cent of import and export goods are shipped by foreign companies. Thai shipowners, who generally have very little capital, will now be able to develop and expand their fleets. The fleet expansion would also help reduce the deficit in international transport, according to a report by the Office of Maritime Promotion Commission (OMPC). Based on the new law, people who may be hurt by sea-going ships will be protected, as they will receive compensation from shipowners in the event ships cause death, damage or other losses. When a Thai ship faces disaster at sea, others will be willing to help it or rescue the crew because they will receive payment. At the same time, Thailand's private maritime law will be upgraded. This is a basic requirement for the development of the country's maritime transport industry. The OMPC report also shows that the new law does not contain any clauses concerning tax and does not require that a working committee be set up to oversee this issue, meaning that it will not affect the government's budget. The Bill, first proposed two years ago, is aimed at boosting the country's small water transport industry. Currently, there is no special law on ship mortgaging and maritime liens, and people have to refer to the Civil Law. However, a ship, if it is considered a liquid asset, cannot be compared to property which is a fixed asset. There is no law which clearly says who will have priority in receiving payment if a ship faces disaster. Thai Ship Law BE 2481 says that a ship is a fixed asset. It also regulates in what cases people will receive payment, but this does not cover all conditions. For example, the law does not say that the shipowner has to pay crew and the people who salvage a ship after it has caused death or loss to others. The ''maritime lien'' has been legally practised in the international maritime transport industry since the International Convention for the Unification of the Certain Rules of Law relating to Maritime Liens and Mortgages was signed in Brussels in 1926. But Thailand did not have such a law. Without a proper law on maritime liens and ship mortgaging, Thai shipowners have suffered from a shortage of financing because they could not mortgage vessels and spend money on their fleets and service development. The OMPC in a seminar a few years ago found that many commercial banks were willing to provide loans to shipowners if there was a law on ship mortgaging and maritime liens.