Players can only be in one player run affiliation or be a member of IND or TRN. However every player can also re-flag their player owned positions with a flag of convenience (FoC) which come with their own affiliation profile:

• Priate (PIR) - can attack / be attacked anywhere
  
• Mercenary (MRC) - can only attack / be attacked in developing systems / Borderland systems / Darkspace
  
• Privateer (PRV) - can only attack / be attacked in borderlands / Darkspace + can use anyone's Posted list
  
• Freelancer (FRE) - can not attack (use enemy lists) / can be attacked in Darkspace
  

As the term suggests it is simply a flag raised by a position when using its own affiliation identifier would be inconvenient, potentially fatally so.

Each Flag of Convenience has a profile associated with it and is otherwise treated as a standard affiliation with respect to relations with other affiliations. As such using a Flag of Convenience may not always work out to the benefit of the position.

Freelancer (FRE)
This is for those that simply want to trade and run freighter operations. Uses include using the flag to enter regions of space that would cause issues if flying the affiliation flag.

Example
Bob is in the DEN. He has a few barges which he has flagged FRE. He uses these to contact civilian traders in the Outer Capellan Periphery which is largely controlled by human factions that are belligerent to the DEN. This allows him to wander round the populated worlds buying the various unique trade goods from the civilian populations without getting his ships shot up. The starbases tolerate the presence of the FRE ships because they get to tax the purchases of the trade goods when he buys them while docked.

Example
Bob also runs two bases that are separated by a region of space patrolled by a faction belligerent to the DEN. He uses his FRE flagged ships to move ordnance between the two bases. This is no different to paying a second party to haul the goods in the DEN’s behalf.

Abuse
FRE are law-abiding as such there is potential for abuse with FRE. Where it comes to light that there has been an abuse, the GM will moderate. Coding against all abuses of flags of convenience is exhausting, frustrating and ultimately impossible. Play within the spirit of the game rather than the specific mechanics, see Considerations in Halo for a more extensive example with specific reference to 'take the piss'.

Example of Abuse
A FRE ship lands in a starport and disembarks a GP for an affiliation hostile to the starbase. Further FRE ships land and reinforce the GP. The GP then attacks.

GM Moderation – the GM is perfectly justified in doing anything from making the GP FRE (so it can’t attack) disbanding it or even turning it over to the owner of the base. So don’t do it.
If the GM finds (or is informed) of the presence of FRE ships in suspicious locations/circumstances, the ships will be reflagged without informing the owner. This will generally be to PRV but may be to another FoC as deemed appropriate. If you do not want to be caught out, don't even consider using FRE ships for anything other than open and honest trading and shipping in civilised regions of space.

There are situations which can on the face of it appear abuse but are not. These are adopting a flag of convenience to get out of Dodge. Such actions though permitted have their own failings.

Example of Naivety rather than Abuse
A fleet of HEX ships are maintaining in a starbase in a system that becomes Contested. The HEX opts to reflag the entire fleet as FRE and make a run for it to avoid being attacked by the contesting faction. First of all there is a cost associated with making them FRE (5000 stellars/ship) but more importantly, now that this system is Contested a hostile fleet blockading the world can easily have Everyone on the enemy list and will open fire as readily on FRE as they will HEX. All that this action has achieved is a further cost of 5000 stellars/ship.

FRE and Relations
FRE differs from the other Flags of Convenience in that the affiliation is considered friendly to all affiliations that are friendly to the FRE. This means that any affiliation that is friendly to the FRE can defend them. This is the only Flag of Convenience that has this capability. Amongst GM controlled factions, Halo Execution Fleet (HEF), the Yank Kastorian (KAS) and Civilian (CIV) are friendly to FRE.

Privateer (PRV)
This is low level rogue (Han Solo), operating on the fringes of legality. They can use enemy lists allowing them to hunt Darkspace and Borderlands either on behalf of their true affiliation or as mercenaries. They may however also be used as trading ships as are FRE. As they cannot operate enemy lists in Developing and Core systems, there are quite a lot of systems where they are not considered a threat though again they may be put on system enemy lists or exclusion zones to prevent them doing actions that are considered abuse by FRE.
Privateers can land hostile GP’s into other faction’s bases outside Core and Developing systems but of course there is the risk that PRV are on the base’s enemy list and auto-board list. This GP can be PRV though can be any other faction (basically smuggling in a small rebel team as per the many popular sci-fi films).

Abuse is as for FRE but applied in Core and Developing systems.

Mercenaries (MRC)
MRCs are useful for mounting operations in systems claimed by other factions without the need to raise relations hostility level. They are also good for dealing with individual ships that are hiding behind flags of convenience.

Example
The HEX fleet flying the FRE flags of convenience disperses to various systems. The faction contesting the system can of course hunt them down in Darkspace but cannot touch them in more developed space. They have the option of using raising the MRC flag of convenience on squadrons and then pursuing and attacking the FRE ships in all but Core system. They post the individual ships and add the affiliation posted list to the enemy list of the MRC ships. This allows them to fine grain control of which FRE ships they attack rather than a blanket attack on all FRE ships.

While PRV ships could be used instead of MRC, MRC flagged ships gives greater scope to pursue the FRE ships into all but Core systems.
MRCs can also drop hostile GP’s into all but a Core system base. Again this could be a MRC or any affiliation. This is because factions operating MRCs do so outside of their own territory and as such are likely to treat all MRCs in their territory as hostile.
Abuse is as for FRE but applied in Core systems.

Pirate (PIR)
There are absolutely no restrictions on what pirates can do. They can operate anywhere, attack anywhere and ship in GP’s anywhere. On the downside as people running the PIR flag of convenience tend to do so outside their own territory, most factions have a standard policy to shoot all pirates on sight.