A merchant flag is a flag flown by a state’s merchant ships, which often resembles the state or national flag. The right to fly the merchant flag is granted by the flag certificate issued by the state in which the ship is registered, and it must be flown by every merchant ship entered in the ship register. Consequently, the merchant flag may only be flown by vessels that are not warships, government or auxiliary vessels, or yachts. The key distinction here is that a vessel does not constitute an extraterritorial area; it belongs to a private individual or similar entity as a merchant vessel and does not represent the state itself. Thus, the use of the national or, indeed, state flag is normally precluded. The merchant flag was created precisely to give these private individuals the opportunity to declare their nationality. Declaring one’s nationality is particularly necessary when entering and leaving a port. In the English-speaking world, the merchant flag is referred to as the 'Civil Ensign' or 'Merchant Ensign'.
