By Yusra Barmaz
In late December 2017, the Cayman Islands Shipping Registry (CISR) announced that it would allow luxury yachts flagged in the country to obtain ‘YET’ status (Yacht Engaged in Trade). The YET is in response to the Marshall Islands Registry which already allows flagged vessels the same status. Both YET schemes are designed to allow yachts limited periods of charter whilst operating mainly under a private registration for the owner’s use. The scheme is particularly attractive for non EU resident owners.
Under the scheme, if a yacht is granted YET status, it will allow a private yacht to conduct both private and charter use – the CISR previously required that a yacht was fully registered either as a pleasure or commercial yacht. When given the new certification, a privately registered yacht would be able to charter for up to 84 days per calendar year in EU waters, although this is currently limited to France and Monaco.
To be eligible, yachts must be over 24 meters in length and may only carry a maximum of 12 passengers during the charter. During the period in which the yacht is operating under YET status in the EU, the owner may not use the boat for personal use and yachts which have YET status may not apply for VAT exemptions on supplies or fuel. Any Cayman Islands-registered pleasure yacht meeting the aforementioned standards wishing to charter in France or Monaco is eligible.
Any boat wishing to obtain YET status must be compliant with the requirements of the CISR Shipping Notice 03/2017 and all other appropriate requirements such as the Large Yacht Code.
If these requirements are met in full, the yacht will be issued with a Cayman Islands Yacht Engaged in Trade Certificate of Compliance (YET CoC) and temporary Certificate of British Registry for a Yacht Engaged in Trade (temp COBR YET) which covers the maximum charter period.
ZEDRA’s Andrew Wilson notes ‘The scheme has numerous benefits: owners would be able to use their yacht privately while maintaining an option to charter occasionally – which is an attractive option to offset running costs.’
It would also eliminate the need for vessels to go through the registration process each time the use of the boat is changed from commercial to private and vice versa. Likewise, under the scheme owners neither need to sign a charter agreement to use their own yacht on a personal basis nor have to pay VAT on their own use of their vessel, while in Europe.
The Customs authorisation procedure for switching between private and commercial use under YET will release the yacht from the obligation to undertake import and export formalities which would otherwise include leaving the EU to visit a third country port.
The YET could provide a simplified way of making income limited to 84 days a year from your yacht operation while enjoying the benefits of a private yacht for the rest of the year. However, despite all the benefits YET provides, owners should be cautious and take advice before considering the scheme as it is not appropriate for every circumstance. Furthermore the YET is relatively untested with the Customs Authorities in France and Monaco.
If you wish to discuss how the YET could work for your yacht please don’t hesitate to get in touch with our Head of Marine and Aviation, Andrew Wilson.