By Peter Machiano – Maritime Law Consultant
The following article was originally published on 5 May 2016 and provides some valuable insights into the pitfalls of seemingly bargain yacht registrations:
It is the purpose of this guide to provide information on the registration of yachts in the US State of Delaware and to make existing and prosective users aware of the potential for the system to be challenged by foreign jurisdictions.
Delaware is a U.S. state located on the Atlantic Coast in the Northeastern and Mid-Atlantic regions of the United States. The state is a popular jurisdiction for the formation of companies and corporations.
The Division of Fish and Wildlife Office of Boat Registration is the vessel registration authority for the State of Delaware.
It is not uncommon to encounter Delaware registered yachts cruising internationally and in the Eastern Mediterranean it is arguably one of the most commonly found ‘foreign’ yacht registrations.
The prevalence of so many Delaware registered yachts in these countries is often as result of the low costs of the system and the apparent ease of the process. The perceived strength of an attachment to and the support of one of the world’s leading superpowers is also attractive to many yacht owners.
Although the Delaware yacht registration is a popular system, both existing and potential users should be aware that a Delaware vessel registration is a State Registration which is a local registration applying only to vessels that are principally used within the coastal and inland waters of the issuing state’s jurisdiction.
Importantly US state registration does not grant US nationality to the vessel and thus does not automatically afford access to any international treaty rights, privileges or the protection of the USA.
Delaware regulations provide that a vessel is deemed to have its state of principal use in Delaware if it is to be used, docked, or stowed on the waters of Delaware for over 60 consecutive days.
Vessels registered in the State of Delaware are accordingly issued with a credit card sized ‘State of Delaware Registration Certificate’, the reverse of which states the state of principal use is Delaware.
It is therefore possible for a foreign jurisdiction to declare the Delaware registration of a vessel to be invalid on the basis that a state registration is not valid for cruising outside US waters and/or the vessel is not used principally within Delaware waters.
If a vessel’s registration is declared invalid then the vessel itself is effectively stateless and in contravention of international maritime law.
Whilst many foreign countries apparently tolerate the operation of Delaware registered vessels in their waters we are noticing a growing awareness of the limitations of the Delaware system amongst port state and customs authorities.
