
Article 1 

1. With a view to establishing flag State performance within the meaning of Directive 2009/16/EC, flag States shall be classified into black, grey or white lists, adopted in accordance with the Paris MoU on the basis of the total inspections and detentions over a three year period. Additionally, flag States listed in the black list shall be divided into very high, high, medium to high or medium risk depending on their detention rate. The classification shall be updated yearly.
2. Classification of a flag State into the black, grey or white list requires a minimum of thirty port state control inspections.
3. The methodology and formulas to be used to categorize the flag States shall comply with the flag State criteria as set out in the Annex.
Article 2 
The compliance referred to in point (c) (iii) of Part I.1 of Annex I to Directive 2009/16/EC required for ships to be considered as posing a lower risk, shall be regarded as demonstrated when the Commission receives a written confirmation from the flag State that a final audit report has been completed and where relevant, a corrective action plan submitted. Audits carried out before 17 June 2009 shall be taken into account equally.
Article 3 
This Regulation shall enter into force on the 20th day following its publication in the Official Journal of the European Union.
It shall apply from 1 January 2011.
This Regulation shall be binding in its entirety and directly applicable in all Member States.Done at Brussels, 13 September 2010.
For the Commission
The President
José Manuel BARROSO
ANNEX
Flag State Criteria  1. μblack_to_grey = N · p + 0,5 + zN · p1 – pμwhite_to_grey = N · p – 0,5 – zN · p1 – p
Where:

Nis the number of inspectionspis the allowable detention limitzis the critical value of the normal distribution (1,645 for certainty level of 95 %)
 2. The formulas set out in point 1 shall provide the allowed number of detentions for either the black or the white list. A number of detentions above the black to grey limit means worse than average and is to be subsequently listed under the black list, while a number of detentions below the white to grey limit means better than average and is to be subsequently listed under the white list. When the amount of detentions for a particular flag State is positioned between the two, the flag State shall be listed under the grey list.
 3. In order to compare the performance of flag States listed on the black, grey or white lists, the calculation is repeated adjusting p in the formulas set out in Point 1.
 4. EF = Flags’ Detentions – μwhite_to_greyμblack_to_grey – μwhite_to_grey 5. 

 EF = 4,01 and more means very high risk
 EF = 3,01 to 4,00 means high risk
 EF = 2,01 to 3,00 means medium to high risk
 EF = 1,01 to 2,00 means medium risk.
