It is a common misconception that the first port of call to check on safe manning requirements is with your insurers, this is not the case.

When looking to establish safe manning requirements for your yacht, your first port of call at all times must be with flag state.  Insurers will only provide cover if the yacht operates legally – this means that you must at all times be compliant with the requirements of the flag state of the yacht.  Not complying with these requirements can mean that the yacht is illegally operating and therefore, no cover will be in place.

Safe manning requirements can apply to both private and commercial yachts dependent on the choice of flag, yacht size, tonnage, engine kilowatts and also area of use. Safe manning does not stop at number of crew onboard – it also involves making sure all certificates for crew qualifications are up to date, any Certificates of Equivalent Competency for the relevant flag state are obtained before crew members commence employment onboard and STCW / current medical certificates are held.

Further to my previous article ‘Proposed tax on yachts operating in Italian waters’,  some additional information has now been released.

Payment of the tax, which is applicable to all yachts operating in Italian waters, is the responsibility of the yacht owner. The tax is calculated on a daily basis and should be paid to Port State Control who are tasked with enforcing collection. Non payment could attract penalties of up to 300%.  

It is anticipated that the rates will be reduced by 50% for yachts in dry dock or sailing yachts with an auxillary engine but it is not yet clear if there will be any limitations on size. For older yachts there is a reduction based on age as follows:

1. 5 years and over - 15%
2. 10 years and over - 30%
3. 15 years and over - 40%

As May draws nearer, we expect further clarity on how the tax will be applied and will provide updates as and when we receive further information. 

I will be attending the Dubai Boat show between 13th & 15th March 2012 and will be delighted to meet any current or prospective clients, captains, brokers and intermediaries.

To arrange a convenient time to meet, please e-mail me at chris.hole@sarniayachts.com or call +44 1481 754852.

During the week of my trip I can be contacted on +44 7781 119175.

I look forward to hearing from you.

We are not sure that too many people are able to definitively answer this question. It is an untested area to date, so any advice taken must rely solely on opinions rather than any precedents.

There has been quite a rush in the last few years amongst EU service providers and yacht managers to develop their own crew employment companies located outside of the EU in places like Guernsey, Jersey, the BVI or the Cayman Islands.

Sarnia Yachts is no different as a number of years ago we formed a dedicated Guernsey Protected Cell Company (“PCC”) under the brand name “Sarnia Crew”. This is so that the crew for each yacht can be employed by a separate protected cell of the PCC which aims to ring fence the assets and liabilities associated with each yacht’s crew employment activites.

We would like to think however that Sarnia Yachts’ crew employment service is about as genuinely non- EU as conceivably or practically possible for the following reasons: 

1. Sarnia Yachts has, like many other groups, recently established a specific employment vehicle in the form of a Guernsey PCC, but we have in fact been undertaking crew employment for nearly 40 years from our base in Guernsey. So while our employment vehicle itself may be relatively new, providing non EU crew employment services is something we are very familiar with;
2. Our PCC used for crew employment services is 100% owned by us and ultimately by Guernsey resident individual shareholders. It is not a company managed on behalf of and therefore potentially a subsidiary of a business operating within the EU;
3. All the decision making in respect of the management of our crew employment company is undertaken by us as directors in Guernsey so we are comfortable that the real mind & management of our crew employment business takes place outside of the EU;
4. All of our payroll transactions are authorised and released by us in Guernsey from our Guernsey based bank accounts. They are not controlled by a party located in the EU who logs onto a Non EU on-line banking system.

Going back to the original question, we are not saying that the above criteria are absolutely essential in establishing an effective non EU employment arrangement. However the changes that have driven the rapid increase in the number of non-EU employment companies are quite recent and as yet they have not appeared on too many radar screens. If or when they do, we are comfortable that our service offering is as genuinely non EU as possible, as a result of all of our operations being undertaken from outside of the EU at our Guernsey offices.

For the basis of this text, the term EU also includes the European Economic Area (EEA) and Switzerland

I will be travelling to the Cote D’Azur during the week of the 20th to 24th February 2012 and visiting Monaco, Antibes, Cannes, La Napoule and Golf Juan. I would welcome the opportunity to visit any captains, brokers, managers and clients who feel a meeting might be helpful.

With many fiscal changes affecting the industry and the increasing range of Sarnia Yachts’ services, there are a number of topics on which I can provide an update. 

To arrange a convenient time to meet, please either e-mail me at bruce.maltwood@sarniayachts.com or give me a ring on +44 1481 754851.

During the week of my trip I can be contacted on +44 7781 100463.

I look forward to hearing from you.

For all commercial yachts of 24 metres load line length and over, operating under LY2 and that are under 500GRT, mini ISM is mandatory. For private yachts or commercial yachts operating under other commercial codes, Mini ISM is voluntary.

Please click on Mini-ISM in order to download the free template in word format which is also available from the MCA directly.

Sarnia Yachts will once again be attending boot Dusseldorf  this year which runs from 21-29 January. Darryl Sharman will be visiting the show on 26 January 2012  and looks forward to seeing you there.

To arrange a meeting please contact the office on +44 1481 754850 or alternatively you can phone Darryl during the show on +44 7781 101562.

From 1 January 2012 the concessionary treatment for UK  residents has been withdrawn as it contravenes EU law.

The Sailaway Boat scheme is for overseas residents who are going to personally export and keep a yacht outside the EU.  A concession was granted for UK residents to also take advantage of this scheme however it is not possible to put this concession into the statutes as it contravenes EU law.

The EU law- Article 146 of Directive 2006/112/EC permits the zero rating of goods which are “..dispatched or transported to a destination outside the European Community by or on behalf of a purchaser not established within their respective territory”.  This clearly illustrates that the concession contravenes this law which was withdrawn from 1^st January 2012.

It is still possible for a UK business to zero rate the supply to a UK resident as long as the business undertakes the export themselves and it obtains satisfactory evidence of this export within 3 months.

For further information on this or any of the range of services provided by Sarnia Yachts, please get in touch

Early reports suggest that from 1 May 2012 Italy is proposing to impose a tax on pleasure yachts operating, moored or at anchor in Italian waters. The proposed annual tax will be pro-rated according to the size of the yacht and calculated on a daily basis or part thereof as follows:

We await confirmation of final ratification and will provide a further update as soon as available

Maltese Leasing follows the same basic structural principals as French and Italian Leasing with regard to Lessor (owner), Lessee (operator) and flag. However two common misconceptions are that the Lessee has to be a Maltese company and that the yacht has to fly the Maltese flag. These are incorrect.

The Lessor must be a Maltese entity for the full term of the lease and all VAT payments, in line with the lease agreement, should be made to the Lessor from the Lessee. The Lessee may then exercise the option to purchase the yacht at the end of the term at which time a Maltese VAT paid certificate is issued by the Maltese Government. If the lease is terminated before the end of the lease or outside any stipulated early termination date, any VAT paid will be lost. If the vessel is sold part way through the lease, the purchaser may consider taking over the existing structure and fully completing the term of the lease under the same criteria in order to obtain a VAT paid yacht.

Subject to consideration of EU place of supply rules, any corporate entity or individual may act as Lessee, and may be either an EU or non EU/EEA entity/person. Using a non EU/EEA entity as Lessee has the added advantage of removing the obligation for either employer contributions to be paid or for employee contributions to be deducted from the salaries of crew employed by the Lessee. The article Social Security Regulations for Seafarers has further information on this subject.

As the vessel will be considered VAT paid, and to assist in safeguarding this status, the flag and port of registry should be EU. However, as with French and Italian leasing, any EU port may be used, and those wishing to fly the British Red Ensign may chose London or any other of the 114 UK ports of registry.

If considering Maltese leasing one also needs to factor in at least one visit to Malta with the vessel. Sarnia Yachts Malta can assist with these arrangements.