The concept of “Genuine Link” is a highly controversial, political, economic and legal issue. The requirement of a genuine link between a State and a ship registered therein has caused problems greatly in the study of International Maritime Law. The discussion has created difference of literature and opinion but has left this issue still unsettled. There are various views concerning the concept of “Genuine Link.” They may be divided into two big groups – for and against (pro and con). However, it should be noted that even inside of these groups does not exist compromise regarding of the meaning of the genuine link. There are different factors governing the choice of flag by the shipowner. Shipowners are operating in highly competitive markets and as a consequence, the factors determining choice of flag for their vessels are basically economic factors, which usually form an integral part of their corporate and financial policy. However, this should not be done at the cost of safety standards and seafarers’ welfare. A flag State ensures how to make this link between a vessel and its nationality genuine and exercise its jurisdiction and control over a ship.