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Industry seeks clarification on yacht cruising licenses

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Rumored denials of cruising licenses to U.S.- and foreign-flagged yachts in South Florida during the past several months have led key industry groups to ask U.S. Customs and Border Protection to explain recent interpretations of the law.

Trey Reeder works with yachts as director of the yacht division of customs brokerage firm Howard S. Reeder. He is busy now with yachts scheduling trips to the United States and the Fort Lauderdale International Boat Show.

“I am clarifying rumors with people in Europe that are planning to come for the boat show,” Reeder said. “They call and say, ‘I hear I can’t come because I am for sale.’ ”

Click to read details on U.S. Cruising licenses.A handful of yachts have been denied a cruising license upon entry in South Florida. The issue that seems to trigger the denial relates to the word “sale”.

“If they are listed for sale, or are for sale, then CBP is saying you are here for sale, not for cruising,” Reeder said. “And CBP is saying that any offer for sale, even if not for sale in the U.S., you are still for sale. And they say even if you pay the duty you won’t get a cruising license.”

But the industry groups read the law differently. Florida Yacht Brokers Association, Marine Industries Association of South Florida and the U.S. Superyacht Association have enlisted Jennifer Diaz, founding partner of Diaz Trade Law to formally request clarification.

“The law has not changed, but CBP isn’t granting cruising licenses as they had previously,” Diaz said. “We’re seeing arbitrary decision making in South Florida local customs offices saying who is entitled and who isn’t.

“The big takeaway is, if a foreign yacht is for sale, it nevertheless is still entitled to a cruising license,” Diaz said. “You are entitled to do both at the same time. It should not be one and the same. Customs is dumping it in one bowl.

“The fun part is, even if it is for sale, who cares?” she said. “A search shows 365 yachts not for sale in the U.S. but for sale outside of the country. There is nothing wrong with that.”

Reeder has found a way to help his clients, at least in the short term.

“Basically, I tell them they may be denied a cruising license but are welcome to come and cruise with their boat by using a permit to proceed,” he said.

In order to cruise in U.S. waters, yachts may request a cruising license or a permit to proceed. The permit, Form 1300 – Vessel Entrance or Clearance Statement, requires yachts to check in at each new port. Longstanding federal law — Code of Federal Regulations 19 CFR 4.94 – Yacht privileges and obligations — outlines the information required to apply and the wording on issued cruising permits.

Diaz’s letter to CBP cites concern that local and federal economies could be adversely affected and expressed urgency to clarify interpretations before the the upcoming Ft. Lauderdale boat show scheduled for Nov. 3-7.

“Now local CBP will be speaking with the national headquarters so customs can discuss this internally,” she said. “This is an informal way for them to solve this.”

Said Reeder: “We are saying this has been ruled on multiple times, and these yachts should be issued a cruising license.”

Dorie Cox is associate editor of The Triton. Comments on this story are welcome at dorie@the-triton.com.

 

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6 thoughts on “Industry seeks clarification on yacht cruising licenses

  1. Melvyn Miller

    Vessels with cruising licenses are still required to report arrival by telephone to the designated CBP office upon arrival at all US ports . Some CBP offices do not require reporting for movement within their jurisdiction. CBP holds that this requirement, which is based upon the old Treasury Department section of the CFR, is not superseded by the ENOAD system and foreign flag vessels must satisfy both.

  2. Capt Staats

    I have found it easier to just clear each port and leave my registry with them. They give me a certified CBP letter indicating my official registry is being held in said local office. It costs $36.00 US to enter and clear and it only takes about 30 mins. in their office. Upon entry you have 48 hours to fulfill this requirement or captain can be fined $5000.00. As long as you are not planning on making numerous port calls this is a viable option to the cruising permit. Upon departure you pick up your registry fill out form indicating next port of call and have 24 hrs to depart. It may be 48 hrs for departure as it is for arrival but I don’t push the limit. Never had an issue doing it this way so don’t stress if you can’t get your C.P.

  3. Leo

    My Baltimore Costoms official explained that a foreign yacht cannot be listed for sale while on a cruising permit unless the import duty (1.5%) is paid. She also said that once the duty is paid, a cruising permit is no longer needed nor given, and the duty paid receipt is used to justify this during any future inspections.
    It has always been possible to cruise without a cruising permit, just less convenient since one is then required to clear in and out of each port, or customs area. Just how big a customs area is variable. In addition, I have found most officials very accomodating, even giving me a clearance all the way from North Carolina to Maine, with intermediate stops allowed without any extra clearing in and out.

  4. Fred Brodsky

    It would be very helpful to have a consistently applied procedure for all foreign pleasure craft, even if there is one for duty paid and a separate one for duty not paid. A telephone number directory by location would also be very helpful as we usually get transferred a few times before we get to the correct location to report coast wise movement.

  5. Hunter18

    I have no dog in this hunt, but one could surmise the Boat Show may have been an influence regarding foreign flagged for sale boats in the area.
    ie boat manufacturers have made a big investment in this show, and probably feel harmed by competition gathering for free outside.
    Hopefully Reeder’s view will prevail, and some CP captain decides to buy a new one, and everyone lives happily ever after.

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