How to Start a Charter Boat Business

We buy a boat made in the USA, but it was brought to Mexico when it was first bought and was always under the Mexican flag. Suppose we transferred the boat to US records after handover, would there be any statutory limitations on the operation of the boat in a charter business?

Swiss Confederation legislation stipulates that a ship must receive a Coastwise Certificate of Documentation on its Coast Guard Certificate when transporting passenger or rented freight within the United States. However, a boat is generally not suitable for coastal recognition unless it has been constructed and licensed in that state.

United States is one of many countries that protect their inland transport industry through "cabotage" legislation. Those statutes stipulate that transport of passenger or freight between U.S. harbors must be conducted on U.S. flagged ships that are also built in that state.

According to the above described scenarios the boat seems to be charterable, as it was build in the USA and it is operated under the US flag before it is chartered. Under the U.S. Code of Federal Regulations, a ship that is otherwise considered for coastal assistance loses that entitlement if it is incorporated in another state.

In practice, however, the National Velvet Documentation Center (NVDC) periodically grants the Coast Guard coastal recognition for ships that are surrendered to U.S. records after registration abroad if the ship is less than 200 tonnes Gross. According to the NGÜ, an alteration to the Federal Act of 1996[46 USC 883] has caused an uncertainty which should make it possible to give coastal confirmation in these conditions and they are applying the Act accordingly.

A further way, which is available to our readers and somewhat less unclear, is the request for a MARAD waiver. "MARAD " is the United States Maritime Administration, and it is the authority that manages the U.S. Maritime Administration. The MARAD programme manages a Small Vessel Waiver programme, which allows ship owners to request a coast-wide permit if they comply with certain directives.

These avenues are also available to a ship owner like our readers, who own a ship constructed in the USA but which has been abroad a while. For information on a US building or registry release, please visit the United States Maritime Administration website marad.dot. gov (follow the Small Measurement Waiver Program links).

Most charter boat companies disregard US building codes, especially when the company is carrying six or fewer people ("six pack" charter). Coast Guard just don't have the means to get many of the rules that small charter boat ownership is subject to enforced, so boat owner may never have a trouble.

A charter that is illegally signed can lead to a fine of several thousand US dollar and a possible refusal of cover.