The Kriegsverdienstwimpel was instituted on 16th May 1941 and could be awarded to captains of ships, not sailing under the Reichskriegsflagge, showed an outstanding merit for the conduct of war.
It could be awarded for a specific action or for a contact with the enemy in which the whole ship and its crew had to be in action. The captain could take and carry the flag on any ship under his command. The criteria were changed on 15th April 1942 in such way that the flag could be awarded to and non-commissioned officers from navy and merchant navy, as well as to foreigners.