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USCG Certificate of Documentation: What’s In Your Endorsement

We feel compelled to point out that when a USCG-documented vessel leaves Caribbean waters for charter hire during the summer months to the continental United States, the “rules of the road” dramatically change.  If you do not have the proper USCG endorsement, you run the risk having your vessel seized and forfeited. 

If your vessel is a yacht documented only for recreational purposes it may NOT carry paying passengers.  If you are recreational endorsed and go to pick up a charter hire in the States, you are engaging in a protected (coastwise) trade.  You may be liable for civil penalties for carrying passengers without the necessary safety certificates and licensed personnel as required under SOLAS (safety of life at sea).  Consideration for passage is not defined as strictly monetary.  Consideration also includes any anticipated future financial gains, such as business meetings and entertainment of prospective clients.

Your charter vessel, to have a valid coastwise endorsement (under the coastwise laws of the United States) must be U.S. built, manned, owned and controlled by a U.S. citizen.  You may NOT employee any foreign crew on board a U.S. flagged vessel.  It does not matter that an Immigration or Coast Guard official told you “it’s okay” in the Caribbean.  This is incorrect information that might be working for your vessel here but is certainly not going to work for you in stateside waters.  Your charter hire guests are not going to be thrilled when the vessel is seized during the middle of the charter hire.

A vessel of less than 100 gross tons carrying more than six passengers is required to be inspected by the Coast Guard.  An uninspected vessel less than 100 gross tons carrying six or fewer passengers is not required to be inspected.  But remember, uninspected or inspected, the vessel can not be documented “pleasure” and is required to be under the command of a Captain licensed by the USCG and to comply with the Title 46 Code of Federal Regulations for commercial vessels.

Another type of charter is the bareboat or demise charter.   A bareboat charter has evolved into highly complex contractual agreements between the vessel owner, charterer and captain/crew.  Even with a valid bareboat charter in place, it does not necessarily absolve the vessel owner of certain risks and responsibilities.  The conduct of the parties involved must be consistent with the written bareboat charter agreement and the burden with establishing the existence of a valid bareboat charter rests with the owner.  If the charterer improperly uses the vessel (smuggling) the vessel may be subject to seizure and forfeiture and the owner may remain responsible for any violation irrespective of charter status.

Any owner considering a bareboat charter arrangement should consult an experienced and competent maritime law firm.  For proper legal advice, we would suggest visiting www.moore-and-co.net.

Gail Wasserman is Senior Director of Ashmead & White Consulting, Inc., a maritime and aviation solutions company based in the Virgin Islands.  Previously, Gail was Director of Paralegal Services in a law firm based in South Florida which served these industries.

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