CHARTER BOAT FLAGS AND REGISTRATION

I was recently approached for my views on charter boat flagging and foreign vs. domestic choice of flag for charter boats. The registration and flag that any charter boat adopts is usually a function of three factors: cost incl. taxes, safety regulations and restrictions, if any, in the location where the yacht will be primarily chartering. Yes, there is an annual registration fee for charter-yachts and most boats tend to avoid registering in the United States because of the high cost and because the boat will now be subject to USCG standards which are expensive to maintain. This is not to say that they are the best regulations and many countries have more stringent regulations than we do but also many countries have fewer and less complicated regulations - like almost none. Fashionable places where large charter-yachts tend to register these days include the Cayman Islands (because many of the larger yachts are actually owned by Cayman Island Corporations, the British Virgin Islands and St. Vincent.

In order to improve passenger safety, there is a movement under way to establish a uniform standard of safety regulations that port officials in different countries can use to apply to visiting charter-yachts regardless of the flag that they fly. This is encouraging and should be supported. The European SOLAS standards are most likely to apply for this project.

Some further thoughts on US flagged vessels: All vessels that charter in US waters especially those US Built and registered in the US, are subject to the Jones Act of 1916. I don't want to get into the complexities of the Jones Act - suffice to say that it was put in place to protect US shipping interests in the age of the robber barons. In today's world the Jones Act does much to discourage boat owners from registering their vessels in this country and also drives non-US flagged vessels to preferentially pick-up passengers outside the US, say in the Bahamas, or the BVI.

Homeland seurity has been doggedly adding additional restrictions and pre-advise for customs arrivals and movment of paying passengers; all of this is good however what is really needed is a total revision or a "start-from-scratch" project to replace the Jones Act. Don't hold your breath.