I am considering the purchase of a foreign-built yacht that I would like to operate as a charter yacht in California. The boat is now U.S.-flagged with a MARAD waiver to allow it to operate in U.S. waters as a “six-pack” charter vessel. I have an MCA 200-ton Master of Yachts license and have been running large BVI- and Cayman-flagged charter yachts for more than 15 years. I am a U.S. citizen, but I have never needed a Coast Guard license, since I have never run charter yachts in U.S. waters. The seller of the boat that I am considering told me that for a foreign-built yacht that operates under a MARAD waiver, the captain can command the yacht under an MCA license without the need to acquire a U.S. Coast Guard license. Is he correct?
Our reader raised a question with a lot of charter business “shop talk,” so we should probably provide a little background before answering his specific question. We have discussed chartering regulations quite a few times in this column — addressing issues such as operator licensing, vessel construction and vessel inspection — but a brief review will be helpful.
A vessel that carries passengers for hire in U.S. waters must be built in the United States and U.S.-flagged with a “coastwise endorsement” on the Coast Guard Certificate of Documentation. It must also be owned and crewed by American citizens. And, if the vessel carries more than six passengers for hire, it must pass a rigorous inspection by the Coast Guard.
Some of the vessel requirements may be waived under certain circumstances, and our reader mentions two of those circumstances. As noted above, Coast Guard vessel inspection is required only for vessels that carry more than six passengers for hire. These operations are often referred to as “six-pack” charter boats, and our reader is interested in this option.
He also indicated that the boat has a “MARAD Waiver,” which may be issued to certain foreign-built boats by the United States Maritime Administration (MARAD) to allow those boats to carry passengers for hire in U.S. waters. The waiver is permanent and stays with the boat when it is sold, so our reader’s foreign-built boat may be used in his charter business.
Our reader provided some background on his new boat, but his principal question concerned operator licensing. He holds an MCA license, and he is hoping that he can use the license to operate charter boats in U.S. waters.
Unfortunately, an MCA license is not sufficient, and he will need to obtain a master’s license issued by the U.S. Coast Guard.
The MCA Master of Yachts license held by our reader is issued by the British Maritime and Coastguard Agency, and it authorizes the license holder to operate charter yachts in British waters. The license is somewhat limited when compared to a U.S. Coast Guard master’s license, since the U.S. license is not limited to yacht operation. But to address our reader’s question, the MCA license has no application at all in U.S. waters.
A vessel that carries passengers for hire in U.S. waters must be under the command of a captain who holds a master’s license issued by the U.S. Coast Guard. The fact that the boat in question in this case is a foreign-built six-pack charter boat does not change that requirement. A license is required even if the boat only carries one passenger for hire.
Our reader did not include this as a part of his question, but licensing and vessel inspection requirements are often set by marine insurance companies, and those requirements may exceed the actual legal requirements in certain jurisdictions.
Charter industry licensing and vessel inspection regulations vary substantially around the world, and an experienced maritime attorney should be consulted in the jurisdiction in which a particular charter boat will be operating.