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NDAA Eliminates Commercial Rules for U.S.-Flag Superyachts

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American-owned, Caymans-flagged yacht of more than 300 GT (video still)

By MarEx 2018-08-17 12:07:43

On August 13, U.S. President Donald Trump signed the National Defense Authorization Act of 2019 into law, providing $717 billion in funding for the armed forces. As in years past, the NDAA for FY2019 also contains non-defense provisions - including a new code of shipping regulations for U.S.-flagged superyachts. 

Since 1920, private recreational vessels over 300 gross tons have been required to register as commercial vessels in order to flag in the United States. Historically, many prominent American yacht owners have chosen to flag with open registries instead, allowing them to avoid the compliance costs associated with American merchant vessel standards.

To remove this barrier and make the U.S. flag more competitive, the superyacht provision in this year's NDAA directs the Coast Guard to develop a non-commercial code of regulations for recreational vessels over 300 GT. In the interim, it allows yachts to register in the U.S. under the standards of the UK Maritime and Coastguard Agency's Large Commercial Yacht Code (LY3) rather than current U.S. rules. 

"This has been a significant issue that the U.S. Superyacht Association (USSA) has spent nearly a decade working to correct," said Kate Pearson, USSA chair and vice president of business development of Safe Harbor Marinas. "We are thrilled to have been an integral part of helping to finally make it a reality and are pleased that yacht owners will no longer be chased from American shores to other countries to flag their vessels."

"I am very pleased that the President has signed legislation that will increase the number of large recreational vessels which fly the U.S. flag," said Congressman Duncan Hunter (R-CA), chair of the subcommittee on Coast Guard and Maritime Transportation. "This will lead to more U.S. jobs in the ship repair and supporting industries."