All the world's major yacht and superyacht shows, conferences, races and rendezvous - listed in one place. A comprehensive guide to all the world's leading yacht and superyacht shows, races, conferences and related events. Such events are a must for those looking to buy or charter a yacht, or looking to source services such as yacht builders, naval architects or interior designers. Home Insights Events / / events Calendar This page aims to list all yacht-related events which may be of interest to our Members and their representatives. Click on any listing to go straight to the organiser's website. You can also see a map here . The Club has no commercial relationships with any organisers. Listings are not endorsements. Events can be subject to change or cancellation without notice, and may not take place every year. Please check with the organisers directly before making any arrangements. Have we missed an event? Please tell us . Thailand International Boat Show Phuket to 18 January 2026 15 January 2026 boot Düsseldorf Düsseldorf to 25 January 2026 17 January 2026 Seattle Boat Show Seattle to 7 February 2026 30 January 2026 New Zealand Millennium Cup Auckland to 3 February 2026 31 January 2026 Superyacht Design Festival Kitzbühel to 3 February 2026 1 February 2026 Discover Boating Miami International Boat Show Miami to 15 February 2026 11 February 2026 Sydney Charter Show Sydney to 23 February 2026 22 February 2026 Superyacht Challenge Antigua Antigua to 8 March 2026 3 March 2026 Superyacht Technology Show Barcelona to 11 March 2026 10 March 2026 St Barths Bucket St Barths to 15 March 2026 12 March 2026 Superyacht UK Technical Seminar London 19 March 2026 Improving Yacht Crew Retention Nice 19 March 2026 Palm Beach International Boat Show West Palm Beach to 29 March 2026 25 March 2026 China (Shanghai) International Boat Show Shanghai to 1 April 2026 29 March 2026 Mediterranean Superyacht Forum Palma de Mallorca April 2026 Singapore Yachting Festival Singapore to 26 April 2026 23 April 2026 PalmaVela Palma to 3 May 2026 23 April 2026 MYBA Charter Show Sanremo to 30 April 2026 27 April 2026 Palma Superyacht Village Palma to 2 May 2026 29 April 2026 BI World Superyacht Awards Venice to 2 May 2026 1 May 2026 Mediterranean Yacht Show Nafplion to 6 May 2026 2 May 2026 Asia-Pacific Superyacht Summit Kobe to 8 May 2026 7 May 2026 East Med Multihull & Yacht Charter Show Poros to 10 May 2026 7 May 2026 TYBA Yacht Charter Show Göcek to 11 May 2026 7 May 2026 British Motor Yacht Show Southampton to 17 May 2026 14 May 2026 Blue Design Summit La Spezia to 20 May 2026 18 May 2026 Limassol Boat Show Limassol to 24 May 2026 21 May 2026 Sanctuary Cove International Boat Show Gold Coast to 24 May 2026 21 May 2026 Giorgio Armani Superyacht Regatta Porto Cervo to 30 May 2026 26 May 2026 Venice Boat Show Venice to 31 May 2026 27 May 2026 Cyclades Cup Antiparos to 13 June 2026 10 June 2026 MTB Superyachts 2026 Lake Maggiore to 13 June 2026 10 June 2026 Loro Piana Giraglia Saint Tropez to 20 June 2026 12 June 2026 Newport Charter Yacht Show Rhode Island to 25 June 2026 22 June 2026 The Superyacht Cup Palma to 27 June 2026 24 June 2026 Cowes Week Isle of Wight to 7 August 2026 1 August 2026 Safe Harbor Race Weekend Rhode Island to 9 August 2026 7 August 2026 Maxi Yacht Rolex Cup Porto Cervo to 12 September 2026 6 September 2026 Cannes Yachting Festival Cannes to 13 September 2026 8 September 2026 Ibiza JoySail Ibiza to 20 September 2026 17 September 2026 Southampton International Boat Show Southampton to 27 September 2026 18 September 2025 Monaco Yacht Show Monaco to 26 September 2026 23 September 2026 Les Voiles de Saint-Tropez Saint-Tropez to 4 October 2026 26 September 2026 Genoa Boat Show Genoa to 6 October 2026 1 October 2026 Salon Nautico Internacional de Barcelona Barcelona to 18 October 2026 14 October 2026 Understanding Superyachts & Business Aviation Tax Barcelona 15 October 2026 Fort Lauderdale International Boat Show Fort Lauderdale to 1 November 2026 28 October 2026 METSTRADE Amsterdam to 19 November 2026 17 November 2026 Abu Dhabi International Boat Show Abu Dhabi to 22 November 2026 19 November 2026 Dubai International Boat Show Dubai to 29 November 2026 25 November 2026 Les Voiles de St Barth St Barths TBC The Turkey Superyacht Forum Istanbul TBC International Yacht & Aviation Awards Cannes TBC World Yachting Summit Monaco TBC Bahamas Charter Yacht Show Nassau TBC The South Pacific Superyacht Rendezvous Fiji TBC SeaYou Yacht Sales & Charter Days Genoa TBC Explorer Yachts Summit Monaco TBC Improving Yacht Crew Retention & Welfare US Fort Lauderdale TBC Managing Tomorrow’s Superyacht Monaco TBC Opportunities in Superyachts Valletta TBC Antigua Charter Yacht Show English Harbour TBC Rolex Sydney Hobart Yacht Race Programme Sydney & Hobart TBC Gulf Superyacht Summit Abu Dhabi TBC Kata Rocks Superyacht Rendezvous Phuket TBC Balearic Superyacht Forum Palma TBC South Coast Powerhouse Summit Southampton TBC Rolex Middle Sea Race Valletta TBC Croatia Yacht Show Zadar TBC Olympic Yacht Show Lavrion TBC Superyacht Investor London London TBC Superyacht Summit Adria Porto Montenegro TBC World Yachts Trophies Cannes TBC 7th Super Yacht Americas 2026 Fort Lauderdale TBC Superyacht Summit Türkiye Istanbul TBC International Charter Expo Amsterdam TBC Malta Boat Show Valetta TBC Lantau Yacht Club Boat Show Hong Kong TBC Hong Kong International Boat Show Hong Kong TBC

A map of all the world's major yacht and superyacht shows, conferences, races and rendezvous. A comprehensive guide to all the world's leading yacht and superyacht shows, races, conferences and related events. Such events are a must for those looking to buy or charter a yacht, or looking to source services such as yacht builders, naval architects or interior designers. Home Insights Events / / Events Map This page aims to map all yacht-related events which may be of interest to our Members and their representatives. You can also see a list of events, in date order, here . The Club has no commercial relationships with any organisers. Listings are not endorsements. Events can be subject to change or cancellation without notice, and may not take place every year. Please check with the organisers directly before making any arrangements. Map locations are approximate. Have we missed an event? Please tell us .

Without sufficient security in place, having provided a loan to a shell company to buy an expensive, mobile asset, lenders could be left out-of-pocket and finance would be impossible to obtain. While loan security can be found in various documents, the requirements themselves can always be traced back to the loan agreement. Home Handbook Financing / / Loan Security 4 April 2017 Last revised minutes 6 Reading time Without sufficient security in place, having provided a loan to a shell company to buy an expensive, mobile asset, lenders could be left out-of-pocket and finance would be impossible to obtain. While loan security can be found in various documents, the requirements themselves can always be traced back to the loan agreement. minutes 6 Reading time 4 April 2017 Last revised Without sufficient security in place, having provided a loan to a shell company to buy an expensive, mobile asset, lenders could be left out-of-pocket and finance would be impossible to obtain. While loan security can be found in various documents, the requirements themselves can always be traced back to the loan agreement. Unpaid crew, suppliers, and collision victims have liens over yachts, creating competing claims for lenders. Port authorities can detain a yacht for unpaid dues, further complicating the lender's position. Yards can have possessory liens on yachts if the owner hasn't paid for works carried out. Mortgages grant lenders rights against the yacht itself in the event of default, and they are the most important type of security. Mortgage registration is essential, either as a statutory mortgage or a common law mortgage, to establish priority and enforceability. Covenants and assignments supplement the mortgage document and dictate obligations and transfers of rights. Deeds of covenant and collateral security documents cannot be registered but are still important for additional protection. Non-statutory mortgages serve as a backup when statutory mortgages are invalid, but they have limitations in enforcement. Yacht registration is required, and the deed ensures the yacht remains registered throughout the mortgage term. Insurance covenants are crucial, and policies must cover the yacht and third-party liabilities to safeguard the lender's interests. Covenants and assignments supplement the mortgage document and dictate obligations and transfers of rights. Deeds of covenant and collateral security documents cannot be registered but are still important for additional protection. Non-statutory mortgages serve as a backup when statutory mortgages are invalid, but they have limitations in enforcement. Yacht registration is required, and the deed ensures the yacht remains registered throughout the mortgage term. Insurance covenants are crucial, and policies must cover the yacht and third-party liabilities to safeguard the lender's interests. Unpaid crew, suppliers, and collision victims have liens over yachts, creating competing claims for lenders. Port authorities can detain a yacht for unpaid dues, further complicating the lender's position. Yards can have possessory liens on yachts if the owner hasn't paid for works carried out. Mortgages grant lenders rights against the yacht itself in the event of default, and they are the most important type of security. Mortgage registration is essential, either as a statutory mortgage or a common law mortgage, to establish priority and enforceability. At the outset, it’s important to note that, with regards the yacht, the lender can still be left competing with the following who may automatically have claims against a yacht – which is why security has to be so wide-ranging: Unpaid crew and suppliers, collision victims, etc, all have liens over yachts Port authorities can have a statutory right to detain a yacht for unpaid dues Yards can have possessory liens where works have been carried for which the owner hasn’t paid: where the yacht is out of the water, it’s a case of no-cash-no-splash MORTGAGES A mortgage grants a lender (the ‘mortgagee’) rights against the yacht itself (known as rights ‘in rem’), rather than just against the owner (the ‘mortgagor’) in the event of default. While it still needs to be beefed-up by other types of security, such as covenants, and assignments of earnings and insurances, the mortgage is the most important type of security taken by a lender. Mortgages over yachts are known as ship mortgages to distinguish them from real estate mortgages. A mortgage can be taken over the whole yacht or just a number of the 64 available shares. MORTGAGE REGISTRATION The mortgagee’s power to sell the yacht in the event of default is specifically granted by statute. A mortgage is said to be ‘statutory’ where it has been set out and registered as prescribed by statute (in this case, regulation 57 of, Merchant Shipping (Registration of Ships) Regulations 1993 (SI 1993/3138) and paragraph 7 of Schedule 1 to the Merchant Shipping Act 1995. Otherwise, they are known as ‘common law’ mortgages but these are very unusual. A statutory mortgage can only be created over a yacht registered under Part I (but not the Part III ‘Small Ships Register’). The mortgagee will likely use a Form 4736 ‘Account Current’ statutory mortgage to secure not just the principal sum and interest but also costs and expenses. A Notice of Mortgage Intent MSF 4739 can be lodged in advance in order to record as early a date as possible for the mortgage: this is important when establishing the priority of debts in the event of later default. The mortgage is a brief document, just setting out the names of the parties, details of the yacht, and a short description of the secured obligation with reference to the agreement and the deed of covenant that supplements the mortgage. It must be lodged with the Registrar General of Shipping and Seamen, and the relevant fee paid. The Registrar will the register and returned the mortgage document. Where the mortgagor is a company registered in England and Wales, then, by virtue of section 860 of the Companies Act 2006, details of the statutory mortgage, the deed of covenant and any other security documents must be sent to the Registrar of Companies within 21 days, failing which such documents will be void as against a creditor, liquidator or administrator. COVENANTS & ASSIGNMENTS As the mortgage document itself is so brief, and there’s no scope for amending or adding to it, and also as the mortgage attaches to the yacht rather than the owner, it must be supplemented by covenants and assignments. Covenants dictate various dos and don’ts, and may be set out in the loan agreement and/or separately in a deed of covenant according to the lender’s house style. Assignments transfer rights from one party to another. The remainder of this article considers common covenants and assignments. For convenience, it is assumed that all covenants are set out in a deed. Unlike mortgages, deeds of covenant, and any other collateral security documents, cannot be registered with the Registrar of Ships. NON-STATUTORY MORTGAGE While a deed supports the mortgage, deeds can still have a clause by which the yacht is mortgaged. This is needed as a backup in case the statutory mortgage is invalid – which can be the case where, for example, the mortgage hasn’t been registered with the Companies Register. The deed will create a non-statutory mortgage which, while better than nothing, won’t be enforceable against a buyer who buys in good faith and isn’t aware of the mortgage, and will be ranked below a statutory mortgage should the mortgagor default. YACHT REGISTRATION The mortgagor will promise in the deed the yacht will be registered as a ship in the United Kingdom, and will remain, so, under the same registered name, for as long as the yacht is mortgaged. This is necessary as UK Part I ship registrations expire after only five years unless renewed. CHARGE REGISTRATION The deed will require, where the owner is a company registered in England or Wales, the mortgage to be registered as a charge with the United Kingdom companies register (known as Companies House). This is fallback requirement as the mortgagee isn’t going to leave anything to chance and will (or should) have registered the mortgage as soon as possible as not doing so risks the mortgagee loosing both the security and priority. INSURANCE Arguably just as important as the mortgage is the borrower’s covenants in respect of insurance, and policy assignments. In particular, the borrower covenants to: At the borrower’s expense, insure the yacht, for a value, on terms, and with an underwriter(s), all agreed with the lender. Comply with all policy terms throughout the term of the loan, including, of course, prompt payment of insurance premiums. Renew policies as needed to maintain cover. Not settle a claim without the lender’s consent It’s not only the yacht itself which must be insured, but third party liabilities which, if not satisfied, will expose the yacht itself to claims which might rank higher than the lender’s as mortgagee. Particular risks must also be covered, such as war risks, and mortgagee’s interest insurance. The latter provides cover where a failing on the borrower’s part means that other policies are rendered ineffective. For larger yachts, the policies must be assignable to the lender, and confirmation will have to be provided by underwriters that such assignments are noted on the policies and that proceeds of the insurance will be paid to the lender if necessary. For smaller yachts, it may be sufficient for the lender to be named as a co-assured on the policy. CLASSIFICATION SOCIETY An explanation as to the role of classification societies (often known as ‘class’) can be found here . Assuming the yacht must be classed, if the yacht isn’t maintained and surveyed as Class Rules stipulate, the yacht is said to be ‘out of class’ – which can lead to insurance policies being invalidated, as well as the yacht not being maintained properly. As this would jeopardise the mortgagee’s security, the deed of covenant will stipulate maintenance in class. REGULATORY COMPLIANCE Depending on the yacht’s length, gross tonnage and whether it’s registered for chartering, it will be subject to various regulations which help ensure it’s used safely. H ere’s a summary of those affecting your yacht . As well as being detained by port officials, non-compliance can render insurances void, which has obvious implications for the mortgagee’s financial security. Compliance with such regulations will be a key provision. INSPECTION As Class rules and flag state regulations only help to ensure the safe construction, maintenance and operation of the yacht, the mortgagee will want to have the opportunity to inspect the vessel to ensure that aesthetic aspects, and with them much of her value, are also being maintained. The mortgagee must therefore have a right to inspect, and this can be supported by a specific minimum value. MANAGEMENT While ‘yacht management’ can cover a broad spectrum of support services, regulations may require management of a specific type and quality, failing which the vessel may be off-cover for insurance purposes and liable to detention following a port state inspection. Managers also vary in approach and quality. Unsurprisingly, therefore, mortgagees will want to approve which manager is appointed. OPERATIONS The mortgagee may wish to restrict the movement of the yacht, not only by stipulating that she is to be kept out of waters close to areas known for piracy or adjacent to unstable countries, but also away from areas where actions in the event of default may be difficult or impractical. It may also be necessary for the deed to spell out that the yacht is to be used in a legal way – for example, not chartering out where the yacht is not registered as a commercial vessel and insured accordingly. CHARTERING An assignment of chartering income (if any) can be a helpful tool for a lender looking to recoup money, especially while awaiting the sale of a yacht in the event of default. Written notice will need to be served on the charterers – which can be commercially awkward for the borrower and a good incentive to keep on track with loan repayments. INCIDENTS Where any kind of incident occurs involving the yacht, whether that be a fire, grounding, flooding, or a legal action such as arrest or other formal court proceedings, the mortgagee will want to know right away, and the deed of covenant will reflect this. Crucially, liens can rank higher than a mortgage. MODIFICATIONS Refits don’t always improve or even add value to yachts: an owner’s ‘personal stamp’ can adversely affect value and may not even be carried in compliance with regulations. The mortgagee will want to know about, and if necessary veto, any proposed modifications. DISPOSAL While obvious, it needs to be set out in the deed of covenant that the mortgagor cannot sell the yacht while it provides security. COLLATERAL SECURITY As well as the mortgage and deed of covenant, the lender may want a mortgage or charge over the shares in the yacht owning company, involving share certificates being deposited with the lender, together with signed but undated stock transfers. Going one stage further, the lender may also require a personal guarantee from the beneficial owner. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Loan Enforcement Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Loan Enforcement

Unavailable at present Latest Position Yachts & More Listing Email WhatsApp +44 7773 246 246 Central Agent 47 m Length DMS & Co Builder 2016 Build year 452 Gross tonnage Marshall Islands Registry Particulars Lesson

Unavailable at present Latest Position Rapid Brokers Listing Email WhatsApp +44 7773 246 246 Central Agent 22 m Length Placeholder Yards Builder 2005 Build year 56 Gross tonnage British Virgin Islands Registry Particulars Innovation

Unavailable at present Latest Position Rapid Brokers Listing Email WhatsApp +44 7773 246 246 Central Agent 38 m Length Example Yachts Builder 2003 Build year 380 Gross tonnage Marshall Islands Registry Particulars Blueprint

Answers to questions often asked about The Owners Club, the worldwide association of superyacht owners. By pooling expertise and experience, we’re making ownership easier, more transparent and better value. Home About FAQs / / Any Questions? Have a question? Just contact us . Some regularly asked questions are set out below. Contact Us How do I become a member? Membership so far has been on an informal basis. To meet the needs of today’s rapidly growing numbers of owners and their representatives, we are now working towards online onboarding. This will allow immediate access to the Club’s suite of standard documents and specialist guidance. How long has the Club been in existence? The idea of creating the Club was first floated back in 2008. Only recently, with the return to pre-global financial crisis levels of building, and increasing public scrutiny of large yacht ownership, have Members sought to formalise their association. Which yacht broker do you recommend? While brokers play a vital role in the yacht market, we cannot recommend particular brokers. Each brokerage, and each individual broker, has its, his and her advantages and disadvantages in terms of contacts, experience and location. For the sake of simplicity and ease of completion, we would urge would-be buyers to ensure that they are dealing with central sales agents. Can we advertise with you? Yes – as long as your business isn’t selling yachts or any yachting-related goods or services. Members trust the Club to provide information and assistance without fear or favour. As we provide object owner-focused guidance, allowing yachting businesses to advertise might create a conflict of interest. Find out more here . Can I network with Members? If Members agree, the Club may organise social and networking events for Members and their representatives in future. Can you help find me a captain? Crew agencies, aside, our General Secretary is happy to publicise direct crew and shoreside staff vacancies. Just contact us . Can you manage my yacht? No, but Members will soon be able to use the Club’s standard yacht management agreement to contract with third party managers. Indeed, Members may consider that, using the Club’s suite of documents, there may be certain aspects of management which can be undertaken by their own family offices. Why doesn’t the Club use the term ‘superyacht’? It turns out that most of our Members don’t actually like the terms ‘superyacht’, ‘megayacht' or ‘gigayacht’. They generally feel that it isn’t helpful to be seen by authorities and the media as a special type of yacht. They feel there’s a fine line between label and target.

The Owners Club's General Secretary is an English superyacht lawyer. He is a Partner at a leading international law firm, regulated by the Solicitors Regulation Authority, the Financial Conduct Authority and the London Stock Exchange. Naturally used to maintaining client confidence, he has also provided expertise on the law and practice of yacht ownership to leading publications and broadcasters. Home About Secretariat / / At Your Service It’s a huge honour to be appointed. Having had many owners and managers as clients over the years, I am only too aware of the issues which need to be addressed. BENJAMIN MALTBY, GENERAL SECRETARY TRUSTED PROFESSIONAL CLUB SECRETARIAT We considered it important to have a regulated professional managing the Club and organising its affairs. We have therefore appointed an English lawyer as our General Secretary. He is a Partner at a leading international firm, regulated by the Solicitors Regulation Authority, the Financial Conduct Authority and the London Stock Exchange. Naturally used to maintaining client confidence, he has also provided expertise on the law and practice of yacht ownership to leading publications and broadcasters, including: Truly Independent Leadership FAQs The General Secretary’s role is to operate the Club at a high level, undertake research, provide guidance and draft the documents and agreements essential to yacht acquisition and ownership. Neither the Club nor General Secretary have vested interests in particular third party suppliers. We’re not beholden to particular yachting industry advertisers . So our approach is objective. Our contracts are fair, balanced and conducive to efficient, fuss-free ownership.

Unavailable at present Latest Position Wright A Way & Co Listing Email WhatsApp +44 7773 246 246 Central Agent 36 m Length Builder & Co Builder 1997 Build year 360 Gross tonnage France Registry Particulars Marker

The Owners Club is the worldwide association for the owners of large, permanently-crewed yachts - often known as superyachts. We're pooling our knowledge and resources, to help each other and those looking to build or buy a superyacht. Home Welcome To The Club THE CONFLUENCE OF AFFLUENCE & INFLUENCE How it Started We are the worldwide association for the owners of large, permanently-crewed yachts often known as superyachts. The Club is fearlessly independent and has no connections with particular yacht builders, brokers, managers or suppliers. By pooling expertise and experience, we’re making ownership easier, more transparent and better value. The Club's a wonderful idea and long overdue. I've had teeth for years but that doesn't make me a dentist. I've had yachts for years, but I'm still glad of the opportunity to share knowledge and best practice, and help make ownership less opaque. OWNER, 42M MY GAINING KNOWLEDGE SHARING PASSION Secretariat As owners, we’re asking the same questions, to the same advisers, again and again. Or we’re asking our captains and managers, whose well-intentioned understanding can be out-of-date or based on hearsay. Members are free to consult the Club’s General Secretary about any aspect of ownership, from purchase, through crew employment and regulatory requirements, to a successful sale and on to bigger and better. About time! I can’t always justify taking advice on operational matters. If we can come together to share both expense and experience then that has got to be a good thing. OWNER'S REPRESENTATIVE, 35m SY GUIDANCE ON MATTERS WHICH MATTER With the relevant Members’ permission, we’ve summarised some of the guidance provided previously by our General Secretary, in the form of a handbook, for the benefit of other Members and the wider community. The information may not apply to your circumstances. If you need help in respect of specific situation, please contact us. Contact Us

Unavailable at present Latest Position Rapid Brokers Listing Email WhatsApp +44 7773 246 246 Central Agent 27 m Length Finest Craft Builder 1999 Build year 240 Gross tonnage United Kingdom Registry Particulars Forerunner

Everyone knows what a superyacht is - until they’re asked to define it. The term has no legal meaning, yet countless organisations claim one. A justifiable boast of prestige and craftsmanship, the term “superyacht” has also become a linguistic liability. Perhaps it’s time to drop the “super” altogether? Home Handbook White Papers / / Language of Luxury "When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean—neither more nor less." "The question is," said Alice, "whether you can make words mean so many different things." "The question is," said Humpty Dumpty, "which is to be master—that's all." Lewis Carroll, Through the Looking Glass (1871) While there is no legal definition of what a ‘superyacht’ is, this doesn’t stop some unilaterally deciding what it is: > 24 metres in length overall - Superyacht UK > 24 metres in length with full-time captain and crew – Burgess Yachts ≥ 24 metres in loadline length and commercially operated – Warsash Maritime School > 98 feet (29.87metres) in Length - The New Yorker > 30 metres in length – Superyacht Times > 30.48 metres in length overall – Offshore Racing Congress > 45.72 metres in length with a draught of ≥ 3 metres - Port Authority of New South Wales Generally, we know what we mean by the term: a pleasure vessel which, for regulatory reasons and on account of its sheer size, needs a permanent, full-time crew. This is the point at which, irrespective of size, the vessel isn’t just an asset but a place of employment and worker accommodation – all rolled into one. Large yachts, with a full-time crew, have been around since the dawn of the 20th century. But the term ‘superyacht’, and the now lesser-used label ‘megayacht’, have only been in widespread use since the mid-1980s. Looking back at the yachting journals of the 1980s, it’s clear that the terms ‘superyacht’ and ‘megayacht’ were simply applied to distinguish between larger vessels which were owner-operated and smaller ones which were not. It was used by brokers and journalists as hyperbole – long before digital media and online videos allowed size, style and pedigree to speak for themselves. This was an age – let’s not forget – when many owners not only sailed some of the larger yachts themselves but often built or at least fitted them out themselves, too. Fast forward to 2000, and there were still only a fraction of the number of large yachts is use compared to today. It was an industry still largely unknown to those not involved. Most brokers and many captains knew each other. Except for some opportunist paparazzi, most journalists paid little regard. A USEFUL DESCRIPTION To be fair, ‘superyacht’ is a useful term – within the industry itself. When an owner can afford crew, he or she can afford to pay for, say, paint of a higher quality but needing a more exacting application standards. A superyacht insurance policy will take account of the owner’s role as an employer and the vessel’s function as a workplace. But such details can be contained deep within a product’s specification.The term has a kudos all of its own. They are, after all, impressive and effortlessly cool. It makes sense to appropriate the term to distinguish oneself as a services supplier. It adds marketplace swagger – although there has been a tendency, for example, for shipping lawyers with little understanding of the market or business models to label themselves as superyacht lawyers. AN UNWELCOME LABEL? Time and again, however, since the early 2010s, environmentalists – and politicians looking to combine green virtue signalling with the politics of envy – have used the term superyacht in a pejorative sense. Rarely, if ever, do they simply refer to yachts: “ Specifically, we draw attention to assessing aspects of ecological footprints of super yachts [sic], super homes, luxury vehicles, and private jets. Taken together, the construction and use of these items in the United States alone is likely to create a CO2 footprint that exceeds those from entire nations .” Lynch, Long, Stretesky & Barrett: Measuring the Ecological Impact of the Wealthy: Excessive Consumption, Ecological Disorganization, Green Crime, and Justice (2019) “ Among the many possessions of billionaires, large “superyachts” are by far the largest producers of greenhouse gases. ” Barros & Wilk: The outsized carbon footprints of the super-rich (2021) “ Superyacht sale surge prompt fresh calls for curbs on their emissions ” The Guardian , 4 October 2022 “ Superyachts aim to go green – but at what cost? ” Financial Times , 1 September 2022 “ THE SUPERYACHT INDUSTRY IS A SINKING SHIP ” - Extinction Rebellion protestors’ banner unfurled during The Superyacht Forum, 16 November 2022 NOT WANTED & NOT NEEDED Informal discussions with Club Members reveal that many just do not like the term superyacht. It has nowadays, for some, the wrong connotations. It’s become a target as well as a description. A lot of owners neither want nor need the perceived kudos which attaches to the term. In short, they have nothing to prove. Their vessels just happen to be larger than most, more or less in proportion to their net worth. WHERE DO WE GO FROM HERE? Perhaps the industry needs to bite the bullet and do away with the term superyacht. Remember when The Superyacht Report was just called The Yacht Report? Maybe it's time to change back. Yes, rebranding is expensive, but such changes may prove far less expensive than not evolving. Brand refreshment is a regular necessity. When the next one’s due, let’s drop the ‘super’ and just call a yacht a yacht. It’s not about trying to make large yachts somehow less conspicuous. It is about removing the popular and mistaken distinction between yachts and superyachts, and instead viewing one being merely a subset of the other. Return to top Thank you to all our Members who provided perspectives for this white paper. Everyone knows what a superyacht is - until they’re asked to define it. The term has no legal meaning, yet countless organisations claim one. A justifiable boast of prestige and craftsmanship, the term “superyacht” has also become a linguistic liability. Perhaps it’s time to drop the “super” altogether? 13 October 2025 Last revised minutes 4 Reading time minutes 4 Reading time 13 October 2025 Last revised Everyone knows what a superyacht is - until they’re asked to define it. The term has no legal meaning, yet countless organisations claim one. A justifiable boast of prestige and craftsmanship, the term “superyacht” has also become a linguistic liability. Perhaps it’s time to drop the “super” altogether? The term 'superyacht' has many definitions, but none in law. The term gained widespread use in the mid-1980s to distinguish larger, crewed vessels from smaller ones. The word has become associated with luxury and prestige. In recent years, however, environmentalists and politicians have used the term in a negative way, linking it to excessive consumption and greenhouse gas emissions. Informal discussions among our Members reveals that many of us feel we neither want nor need the perceived kudos associated with the term. Some suggest doing away with the term 'superyacht' altogether and simply calling them yachts. Rebranding may be costly, but it could be a worthwhile change for the industry to make. You can also read about Cut to the Chase Questions or comments? Please contact us Join the discussion over in the Club's group You can also read about Cut to the Chase Questions or comments? Please contact us

Selling a yacht should be relatively easy. Assuming the price is realistic, there'll be a buyer out there. Connecting with that buyer, however, can be unnecessarily complex. Current business models mean that otherwise viable deals can sometimes fall though. This white paper considers the pitfalls in greater detail, and proposes a solution. Home Handbook White Papers / / Cut to the Chase A RISKY BUSINESS With assets of this size and nature, people buy from people – not companies. Yachts may be advertised by brokerages, but they aren’t sold by them. It’s the individual brokers who do the selling. They often work extremely hard – especially during shows – with an uncertain outcome. They’re patient and diligent, and their commissions are well-earned. They perform a crucial role . THE CENTRAL AGENCY When instructing your broker to sell your yacht, a Central Agency (CA) agreement is imperative. The agreement makes it clear that your broker is in charge of the sale, and will be rewarded no matter who actually sells the vessel (including you – so make sure you have explored your own network first). Your CA can provide a valuation, a marketing plan and produce marketing materials (at their or your expense depending on what you negotiate). At a stroke, scope for argument as to which party was the effective cause of the sale – and so owed commission – is eliminated. Understandably, without a CA agreement in place, most brokers are unlikely to go all-in to prepare the yacht for sale and make every effort to sell: it’s just too easy for third parties to argue that the broker claiming commission wasn’t in fact the (or an) effective cause. Standard form agreements are available, but many of these are poorly drafted, so contact us to have this checked and amended. A pre-determined sales price is often the default setting, but some brokers may prefer a net-to-seller figure, which they can adjust up or down as they see fit. MULTIPLE LISTING SERVICES A Multiple Listing Service (MLS) is a database used by brokers (whether CAs or not) to share their listings, in order to reach a wider audience. MLSs usually have their own public online marketplace, and may supply listings automatically to subscribing brokers’ websites, through an application programming interface (API). The use of MLSs (and certain brokers’ associations require their use) can lead to very broad market penetration for the seller, potentially leading to a quicker sale, but there are drawbacks. Use Google Lens and you’ll find identical images posted by numerous brokers. It's not clear which broker has a direct line of communication with the seller. Where a yacht is listed on a marketplace website (and it’s these which tend to come up first when searching online) it is easy to assume – wrongly – that the broker named in the listing is the CA. The use of API-powered automatic listings may mean that the listing broker knows nothing about the vessel, and may be unaware of the listing itself until an inquiry comes in. The CA’s own website listing, meanwhile, will be languishing well behind on Google simply because the CA’s website’s SEO can’t compete with that of the MLS. The potential buyer is none the wiser. Also, by having the vessel listed everywhere, it's possible that the seller can look somewhat desperate. Nevertheless, once a second so-called ‘buyer-broker’ is involved (i.e. a broker acting for the buyer) they will be entitled to a share (a half or thereabouts) of the commission. Their brokers’ association rules may require it. With chains of communication also stretched, negotiations can become protracted while passions cool and interest fades. CLASS ACTIONS Various class actions have been brought in respect of MLSs. In Ya Mon Expeditions LLC v International Yacht Brokers Association Inc et al , the plaintiff brought an action, in February 2024, against 16 defendants, claiming, in essence, that (in violation of US federal antitrust law) brokers’ associations are requiring members (i) to list all their vessels on an MLS (which may also be owned by that association), and (ii) to follow non-negotiable commission-splitting rules. Ya Mon claimed that “ most buyer-brokers will not show vessels to their clients if a seller is offering a lower buyer-broker commission, or will show vessels with higher commission offers first ” meaning that “ sellers are incentivized when making the required non-negotiable offer to procure the buyer-brokers’ cooperation by offering a high commission ”. Ya Mon also claimed that the defendants’ business practices are anti-competitive, with buyer-broker commissions being about 4% to 5% which is artificially elevated beyond where they would be in a free market. In Defosey v Boats Group LLC et al , a plaintiff brought another class action, in May 2024, against some 18 defendants, making broadly the same claims as Ya Mon , arguing that broker associations’ rules “ force sellers to pay a portion of the commission … to the buyer-broker, someone who provided no service to the sellers ” and, as the commission paid to the buyer-broker is not subject to negotiation between the buyer and his/her broker, such rules prevent competition among buyer-brokers based on their commission rates. A similar case was pleaded in Magna Charter LLC v Boats Group LLC et al . At the time of writing (October 2024) Ya Mon is ongoing, while Defosey and Magna have been terminated, presumably because these have been settled or consolidated with other class actions. MLSs made a lot of sense where potential buyers would drop by their local harbourside brokerage and might have been interested in a vessel details of which weren’t displayed in the window. But they make less sense in a world where most buyers look online, and could reach out directly to the CA – if only they understood the pitfalls of not doing so, and knew where to look. FAKE LISTINGS Incredibly, some brokers will post on their own website, or an MLS, without even having been appointed as CA. Maybe they've had just a conversation with a friendly captain. Indeed, with so much at stake, truly unscrupulous brokers might list your yacht for sale without your broker’s permission – copying photos and plans regardless of copyright infringement. But a sales lead is a sales lead (assuming he or she has been qualified as being a bone fide UHNWI which doesn’t always happen) and such unethical business practices can be overlooked. If you see your yacht advertised with other brokerages, check to see that your CA agreement has permitted this. Unauthorised listings must be removed as soon as possible – before the content is indexed by search engines. PROPOSED SOLUTION In some cases, a commission of 10% can be perfectly reasonable – especially given the sheer amount of time, effort, outgoings and risk involved. The signing of CAs are widely (and proudly) publicised within the large yacht sector, with press releases circulated on LinkedIn and some specialist media outlets. Ideally, buyers would check through these to make sure that they’re dealing with the CA, and negotiate directly with them. Yet, seemingly, they don’t. Many buyers won’t even know what a CA is or does. They will see a yacht advertised and (not unreasonably) make inquires. As soon as they have done so, the advertiser will often have become what the law calls an “effective cause” and will be entitled to some of the commission – over and above any broker association rules requiring payment. The additional step added by the use of buyer-brokers causes delays and miscommunications – especially where there’s a mix of time zones and first languages. As well as educating would-be buyers as to the role and importance of the CA, the solution is surely to list as many CAs as possible, in one place. The CA agreements will need to be checked, prior to listing, in confidence, by a lawyer (the key information contained in the agreements (i.e. the name of the vessel and its registered owner) is freely available to the public anyway. If a potential buyer wants as second opinion on the asking price, an independent valuation can be obtained. Lawyers and surveyors are there to advise the buyer on legal and technical aspects. Return to top Thank you to all our Members who provided perspectives for this white paper. Selling a yacht should be relatively easy. Assuming the price is realistic, there'll be a buyer out there. Connecting with that buyer, however, can be unnecessarily complex. Current business models mean that otherwise viable deals can sometimes fall though. This white paper considers the pitfalls in greater detail, and proposes a solution. 16 October 2024 Last revised minutes 5 Reading time minutes 5 Reading time 16 October 2024 Last revised Selling a yacht should be relatively easy. Assuming the price is realistic, there'll be a buyer out there. Connecting with that buyer, however, can be unnecessarily complex. Current business models mean that otherwise viable deals can sometimes fall though. This white paper considers the pitfalls in greater detail, and proposes a solution. Brokers perform a vital role i n yacht sales, with Central Agency (CA) agreements protecting commissions and streamlining the process. By contrast, while supposedly broadening market reach, Multiple Listing Services (MLSs) can lead to confusion and delays. Class actions have been brought against MLSs in the United States. The proposed solution is to independently authenticate and centralise CA listings, maximising efficiency and transparency. You can also read about Deposits Reimagined Questions or comments? Please contact us Join the discussion over in the Club's group You can also read about Deposits Reimagined Questions or comments? Please contact us

Unavailable at present Latest Position Example Brokerage & Co Listing Email WhatsApp +44 7773 246 246 Central Agent 38 m Length Finest Craft Builder 2019 Build year 362 Gross tonnage Cayman Islands Registry Particulars Ideal

Piracy raises a matrix of legal issues, just at the time when the consideration of these will be the last thing on anyone’s mind. This reinforces the desirability of taking advice in advance and, if necessary, placing a trained and equipped security team on board. For those with real concerns about security, compared with highways, houses and offices, yachts will always be – by far – the most secure location. Home Handbook Managing / / Piracy & Protection 16 April 2010 Last revised minutes 4 Reading time Piracy raises a matrix of legal issues, just at the time when the consideration of these will be the last thing on anyone’s mind. This reinforces the desirability of taking advice in advance and, if necessary, placing a trained and equipped security team on board. For those with real concerns about security, compared with highways, houses and offices, yachts will always be – by far – the most secure location. minutes 4 Reading time 16 April 2010 Last revised Piracy raises a matrix of legal issues, just at the time when the consideration of these will be the last thing on anyone’s mind. This reinforces the desirability of taking advice in advance and, if necessary, placing a trained and equipped security team on board. For those with real concerns about security, compared with highways, houses and offices, yachts will always be – by far – the most secure location. Piracy is defined as any illegal act of violence, detention, or destruction committed by the crew or passengers of a private vessel against another vessel or persons/property on board, outside any country's territorial waters. Hotspots for piracy include the coasts of Indonesia, Somalia, Bangladesh, Nigeria and some South American countries. Insurance coverage for yachts usually has restrictions on cruising areas, and breaching these restrictions may void coverage . Insurers have a broader definition of piracy than the legal definition, as attacks are more likely to occur within territorial waters. Obtaining up-to-date information on current piracy hotspots is crucial, and insurers and maritime security firms can provide assistance. Maintaining vigilance and employing defence measures such as acoustic defence systems and strong-rooms are recommended for yachts in high-risk areas. The legality of carrying weapons depends on the laws of the flag state (where the yacht is registered) and the port state (where the yacht is located). Some countries allow firearms on board as part of the yacht's equipment, while others prohibit certain weapons entirely. Legal consequences and the use of firearms in self-defence can vary depending on the laws of the flag state, port state, and international criminal law. Recognizing pirates can be challenging, and preemptive action may have legal implications. Self-defence and defence of others must be reasonable and proportional to the perceived threat. Maintaining vigilance and employing defence measures such as acoustic defence systems and strong-rooms are recommended for yachts in high-risk areas. The legality of carrying weapons depends on the laws of the flag state (where the yacht is registered) and the port state (where the yacht is located). Some countries allow firearms on board as part of the yacht's equipment, while others prohibit certain weapons entirely. Legal consequences and the use of firearms in self-defence can vary depending on the laws of the flag state, port state, and international criminal law. Recognizing pirates can be challenging, and preemptive action may have legal implications. Self-defence and defence of others must be reasonable and proportional to the perceived threat. Piracy is defined as any illegal act of violence, detention, or destruction committed by the crew or passengers of a private vessel against another vessel or persons/property on board, outside any country's territorial waters. Hotspots for piracy include the coasts of Indonesia, Somalia, Bangladesh, Nigeria and some South American countries. Insurance coverage for yachts usually has restrictions on cruising areas, and breaching these restrictions may void coverage . Insurers have a broader definition of piracy than the legal definition, as attacks are more likely to occur within territorial waters. Obtaining up-to-date information on current piracy hotspots is crucial, and insurers and maritime security firms can provide assistance. Piracy is defined internationally by the United Nations Convention on the Law of the Sea, Articles 101–103. Although local laws may add to this definition, the crime essentially consists of: Any illegal act of violence, detention, or destruction, Committed for private ends, By the crew or passengers of a private vessel, Against another vessel or against persons or property on board another vessel, Which is outside any country’s territorial waters; or Any act of inciting or intentionally facilitating such an act. HOTSPOTS Attacks are logged on the website of Commercial Crime Services (CCS), a division of the International Chamber of Commerce. Currently, while the principal hotspots are to be found off the coasts of Indonesia, Somalia, Bangladesh and Nigeria, acts have been committed off the coasts of various South American countries and even in the Caribbean. INSURANCE Insurers are usually very strict about where yachts can and cannot cruise while remaining covered. Any breach of these restrictions will allow them to escape paying out in the event of a claim for absolutely anything. Once the owner has decided where he or she wishes to cruise, this must be disclosed to the insurer if it is outside the area permitted in the policy, and additional cover negotiated – the cost of which will reflect any perceived increase in risk. In common with the IMB, the definition of ‘piracy’ used by insurers is generally much wider than that given above. This is fortunate since, statistically, attacks are more likely to occur within a state’s own territorial waters – i.e. within 12 nautical miles of the adjacent shoreline. Although piracy risks are specifically covered by the standard ‘Institute Yacht Clauses (1/11/85)’, which are the most commonly-used first-party insurance terms, the risks should still be discussed with the broker anyway. Where, unusually, the policy is not subject to English law, then it may be prudent to take independent legal advice. INFORMATION Patterns of worldwide piracy fluctuate with the political stability and, to a lesser extent, the economic fortunes of adjacent states. It is imperative to obtain up-to-date advice on where the current trouble spots are. Insurers can help with this, although specialist maritime security firms can often provide more detailed information. It should be noted that the security industry is not well regulated in some countries, and firms’ services vary in quality. DEFENCE Although the advice to all yachts travelling in high-risk areas is to maintain particular vigilance, and defences such as acoustic defence systems, satellite-alert systems and strong-rooms are options, the question most commonly raised is whether weapons are, legally, an option. To decide what’s legal and what’s not, it’s necessary to know which countries’ laws apply to any given situation. One needs to consider both the ‘Flag State’ law and the ‘Port State’ law. The Flag State law is the law of the country where the yacht is registered: it governs what happens on board the yacht, wherever in the world the yacht is located, as if the yacht was a small, floating piece of that country. The Port State law is that of the country in whose territorial waters the yacht is located – not just in or around any particular port. EQUIPMENT To take the example of one of the most popular Flag States, the United Kingdom, weapons may kept on board, but not all types. Under the Firearms Act 1968, as amended, firearms (including shotguns) and associated ammunition normally require a licence for purchase and possession. A firearm and ammunition, however, can be possessed on board a yacht, if it forms part of that yacht’s ‘equipment’, without the need for such a licence. A police permit is still needed to bring the firearm to and from the yacht, and a licence required to purchase the firearm in the first place. Section 5 of the same Act still outlaws some weapons altogether for the general public, including: Automatic and semi-automatic weapons, Pump-action weapons, Pistols, other than flare guns, Rocket launchers, other than those used for line-throwing or signalling, Air guns using gas cartridges, and Pepper sprays, TASER®s, etc. Port States will have their own laws relating to possession and disclosure. Researching and complying with these can be difficult and expert advice is a must. ACTION Clearly, there is no point in having weapons on board unless someone is prepared to use them. Introducing them into the equation might change a confrontation into a shoot-out. Guns in untrained hands are not an option. It is also very difficult to work out in advance what the legal consequences of firing shots might be. Thankfully, this choice can be neatly sidestepped by placing a specialist security team on board just for the necessary passages. Shooting at someone whilst they are on another vessel potentially constitutes an act of violence committed on both vessels. The shooter will therefore be subject to the laws of both Flag States, plus that of the Port State if the shooting occurs within 12 nautical miles of the coast (although this limit may not be respected in all countries). Looking by way of example at the UK criminal law, which is followed in much of the world, the raising of a weapon at a suspected pirate, who in fact wasn’t, could constitute an ‘assault’, i.e. putting someone in fear of violence. Shooting a pirate (or otherwise harming him) could lead to charges of grievous bodily harm, where serious injury is caused. Where the pirate is unintentionally or intentionally killed, manslaughter or murder charges could follow. Obviously, a number of defences could be put forward in response, the most useful of which would be self-defence or the defence of another. The accused would not need to have retreated as far as possible before the act of self-defence. Indeed, an act of self-defence or the defence of another may be pre-emptive, given reasonable apprehension. If the threat of force would have been enough, it may be unreasonable to go ahead and use force. If one person on a yacht is threatened, all are can be seen as having been threatened. The force used in self-defence or in the defence of another must be ‘reasonable’ in the circumstances as the accused saw it. What is reasonable would be up to the jury and difficult to predict. The main practical problem is recognising whether or not the yacht is faced with pirates. Until they raise a weapon in your direction or commit any act of violence against anyone, they are just other seafarers. Attack first, and you risk becoming the pirate. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Going Dark Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Going Dark

Unavailable at present Latest Position Yachts & More Listing Email WhatsApp +44 7773 246 246 Central Agent 46 m Length Placeholder Yards Builder 2016 Build year 499 Gross tonnage Cayman Islands Registry Particulars Exemplar

Connect to us your way regarding any aspect of The Owners Club - by email, WhatsApp or through LinkedIn. Feel free to run anything past us regarding buying or building a yacht or superyacht, or any aspect of owning, managing or selling. Plus anything to do with superyacht crew recruitment and employment. Home / Contact Reach Out CONNECT YOUR WAY Feel free to drop us a line gensec@theownersclub.org Connect with the General Secretary on LinkedIn here Chat directly with the General Secretary on WhatsApp here Follow our LinkedIn page here

The International Management Code for the Safe Operation of Ships and for Pollution Prevention (‘ISM’) Code applies to a significant number of large yachts. Members may think they need have little to do with day-to-day logistics, but they would be well advised to familiarise themselves with the basics of the code. And there’s much to learn for Members owning yachts to which the Code does not apply. Home Handbook Regulation / / The ISM Code 18 May 2009 Last revised minutes 7 Reading time The International Management Code for the Safe Operation of Ships and for Pollution Prevention (‘ISM’) Code applies to a significant number of large yachts. Members may think they need have little to do with day-to-day logistics, but they would be well advised to familiarise themselves with the basics of the code. And there’s much to learn for Members owning yachts to which the Code does not apply. minutes 7 Reading time 18 May 2009 Last revised The International Management Code for the Safe Operation of Ships and for Pollution Prevention (‘ISM’) Code applies to a significant number of large yachts. Members may think they need have little to do with day-to-day logistics, but they would be well advised to familiarise themselves with the basics of the code. And there’s much to learn for Members owning yachts to which the Code does not apply. The Code developed by the International Maritime Organisation is mandatory for certain yachts flying the flag of a maritime nation and affects yachts calling at ports in these countries. The Code applies to yachts of at least 500 gross tonnage engaged in "trade," which includes chartered yachts. The Code requires the implementation of a safety management system (SMS) to ensure safety and pollution prevention. The responsibility for safety lies with the 'Company' that has assumed responsibility for the yacht's operation from the owner. The SMS consists of set procedures outlined in manuals held ashore and onboard the yacht. Non-conformities reported to the Company must be remedied, and the Company must keep itself informed and act if issues arise. Compliance with the Code also requires observance of other international and flag state safety regulations. A designated person ashore (DPA) is appointed to ensure compliance with the SMS and statutory requirements. The Company must obtain a Document of Compliance (DOC) and a Safety Management Certificate (SMC) to operate the yacht legally. The Code helps prevent pollution, but compliance is not guaranteed, and prosecutors and insurers may scrutinize the actual implementation and maintenance of safety systems. Non-conformities reported to the Company must be remedied, and the Company must keep itself informed and act if issues arise. Compliance with the Code also requires observance of other international and flag state safety regulations. A designated person ashore (DPA) is appointed to ensure compliance with the SMS and statutory requirements. The Company must obtain a Document of Compliance (DOC) and a Safety Management Certificate (SMC) to operate the yacht legally. The Code helps prevent pollution, but compliance is not guaranteed, and prosecutors and insurers may scrutinize the actual implementation and maintenance of safety systems. The Code developed by the International Maritime Organisation is mandatory for certain yachts flying the flag of a maritime nation and affects yachts calling at ports in these countries. The Code applies to yachts of at least 500 gross tonnage engaged in "trade," which includes chartered yachts. The Code requires the implementation of a safety management system (SMS) to ensure safety and pollution prevention. The responsibility for safety lies with the 'Company' that has assumed responsibility for the yacht's operation from the owner. The SMS consists of set procedures outlined in manuals held ashore and onboard the yacht. The Code was developed by the International Maritime Organisation and, being uncontroversial, has become a part of domestic law in most maritime nations. The Code is therefore mandatory on board certain yachts flying the ensign of such a country, under what is known as the ‘flag state’ law. It also affects certain yachts calling at ports in some of these countries, by virtue of the ‘port state’ law, even if it is not required by the flag state law. The Code does not apply to all yachts subject to a particular flag state law, however. It only applies to those of at least 500 gross tonnage (GT) which are engaged in ‘trade’. Yachts which are chartered will normally be considered to be engaged in trade. SCOPE The Code concerns a great deal more than just having the right number of fire extinguishers or liferafts. It requires owners (or their appointed managers) to put in place management systems which are designed to ensure that the yacht is operated with the utmost regard to safety and pollution prevention. A complete culture of safety and continual improvement must be created. RESPONSIBILITY Where the yacht is technically owned by a single-purpose offshore owning company, ultimate responsibility for safety can nevertheless still lie with the beneficial owner. Responsibility under the Code, however, is said to lie with the ‘Company’. The Company is the party which has assumed responsibility for the operation of the yacht from the owner: it must establish the appropriate policies, and provide the necessary resources and shore-based support. The Company could be anyone, but someone has to formerly agree to take on this role if the owner is to avoid liability. This is where the managers step in. Under the Code, arranging safety systems becomes a surprisingly specialised task. This is why the managers should be chosen, and engaged, with the utmost care and attention to detail. SYSTEM The Company must implement a safety management system (‘SMS’), consisting of set, verifiable procedures. These are tailored to the individual yacht, and should ensure that the yacht is run in a way which complies with the Code. The SMS is contained in sets of manuals, held both ashore and on board. They typically outline the system itself, state general safety and environmental policies, and describe the organisation of the Company. Shoreside manuals will set out the régime for audits, risk assessment and accident analysis. Shipboard manuals will also give the planning, operating and reporting procedures. They cannot just be left on the shelf like an engine manual, however. Port inspectors, for example, may examine the manuals and interview the crew, who will be expected to be both familiar with them and actually using them. Key operational procedures and corrections are planned and recorded, as well as being audited internally and externally. Taken out of context some procedures may appear almost laughably prescriptive. In fact, in the context of the Code, this process leads both to a continual process of refinement, and independently certifiable standards of conduct. NON-CONFORMITY Where a Code ‘non-conformity’ is reported to the Company but is not remedied, or if a blind eye is turned to it, or if the system is such that non-conformities go reported, the Company will be in breach of the Code. Before the Code was introduced, the owner or manager could have legitimately said that there may have been safety issues on board the yacht which they were not aware about. By contrast, the burden is now on the Company to keep itself informed and act if all is not in order. All roles are now more accurately defined, meaning that it is now much easier to assess after an incident who was responsible for what, and what they knew or should have known. FURTHER COMPLIANCE The Code also requires and ensures observance of other international and flag state safety regulations. The obvious example is the fire drill, which cannot be meaningfully conducted unless all the correct fire fighting equipment is present. In fact, compliance with the Code requires compliance with a considerable array of international maritime conventions, ranging from crew training to vessel stability. From the owner’s point of view, this is a good thing. DESIGNATED PERSON A formal line of communication must exist between the Company and the yacht. This is absolutely vital. The Company has to appoint a designated person ashore (normally abbreviated to ‘DPA’ or ‘DP’) to sit at one and of that line. His (or her) job is to keep an eye on the safe and efficient operation of the yacht as the SMS demands, and take all necessary steps to ensure compliance. The DP must also ensure that proper provision is made for the yacht to be manned, equipped and maintained such that it is fit to operate in accordance with both the SMS and whichever other statutory requirements are dreamt up from time to time. The role of DP is often combined with others such as Technical or Operations Manager. In order that the DP is able to do all this, he must have: Direct access to the highest level of the Company’s management; Sufficient authority to influence decision-making; and Appropriate knowledge and experience of the operation of the type of yacht in question. So important is the DP’s role, that he may be jailed by the flag state should he fail to discharge certain key responsibilities. Port states can also be merciless with a DP, even where the DP is based overseas. A DP based in Denmark, for example, was recently the subject to an indictment by the United States Department of Justice. As the DP can be called upon to take action at any time, a deputy may be appointed. Some managers have been known to appoint personal assistants or secretaries to this role. This is poor practice, and indicates a culture of profit over safety. Beyond the DP and his deputy, the Code states that the Company must ensure that all personnel involved with the SMS have an adequate understanding of the relevant rules, regulations, codes and guidelines. Safety used to be the Captain’s domain, or at least the buck stopped with him or her. In terms of the immediate safety of the yacht, this remains the case. As the Company bears the responsibility of Code compliance on behalf of the owner, the existence of the DP ensures that the Company cannot leave responsibility resting on the Captain’s shoulders. Captains and managers must work together to ensure an adequate and workable system is developed. This is enshrined in the preamble to the Code, which explicitly states that in matters of safety and pollution prevention it is the commitment, competence, attitudes and motivation of individuals at all levels that determines the end result. LIABILITY Before the Code was imposed, yacht managers tended to take on the role of owner’s agent. They might have assisted the owner’s accountants, but it was the Captain who had the most to do the owner. The arrangement was based on reducing hassle for owners as much as possible. This arrangement may still, of course, suit owners of yachts not subject to the Code. As managers must take up a more interfering and directing role by virtue of the Code, there is no scope for resentment of this on the part of the crew. Instead, comfort should be taken in the fact that liability is shared with those ashore, who must keep safety issues under close scrutiny, and make sufficient resources available. Nevertheless, the owner may wish to keep an eye on whether the manager’s style is becoming too autocratic, perhaps leading to a dissatisfied crew. CERTIFICATION Once auditors from the flag state have examined the SMS, both on paper and in practice, a Document of Compliance (‘DOC’) will be issued in respect of the Company. A Safety Management Certificate (‘SMC’) may then be issued in respect of the yacht managed by that Company, as long as the SMS has been successfully implemented on board. Both these documents must be in place for the yacht to be operated legally. They will be audited regularly. Because of the number of individuals involved in the planning, undertaking and recording of actions, and the independence of external auditors, deliberate falsifications are sure to highlight themselves. Where logs have been ‘flogged’, i.e. where false entries have been made with regard to, for example, hours worked, the DOC may be withdrawn immediately. APPEARANCES In comparison with trading ships, yachts may appear to have an unblemished safety record. This is a little illusory. Whilst crewmembers may exude joyful efficiency, and the yachts themselves are kept in immaculate condition, this can have more to do with complying with the owner’s aesthetic wishes than with the maintenance of a safety culture. Accidents involving yachts do happen: they tend, however, not to involve large scale loss of life or pollution, and are not especially newsworthy. That courteous crewmember may in fact have worked excessive hours during a busy charter season, or may have been left in command without the necessary experience or qualifications. INSURANCE Following an incident, insurers will consider their liability for the claim thoroughly. Standard insurance clauses typically allow an insurer to avoid paying out, if the yacht was subject to certain perils resulting from a lack of ‘due diligence’ by the yacht’s management. The actions of the Company will be open to scrutiny by the insurer seeking to establish whether due diligence was exercised, and will be subject to a post-incident analysis. The ISM Code paper-trail is the obvious starting point. All documents in the possession of the Company which may be useful to the insurer, including internal documents, may have to be made available in the event of litigation. Any conviction of the Company or DP for Code failings would provide the insurer with the best possible evidence of a failure to exercise due diligence. INSPECTIONS Inspections of yachts by port officials tend to occur less frequently than for trading ships. This is understandable given that yachts tend to wear more respectable ensigns, and it is normally the official policy at ports to concentrate inspections on vessels which are likely to pose the greatest hazard to that port and the surrounding coastline. Nevertheless, where safety failings lead to even trivial incidents, authorities may choose to detain or even take action against a yacht herself, making the use of standard liability-avoidance vehicles, such as companies and trusts, futile measures. The knock-on effects of breached charter agreements and all-round inconvenience are obviously best avoided. The fact that the Code also helps to prevent pollution is a very good thing as far as owners are concerned. Pollution in some jurisdictions can lead to surprisingly hefty fines and even imprisonment. Spotter planes can find offending yachts with ease, and it is surprising how far even the smallest quantity of fuel will spread across the water. Unfortunately, the Company cannot simply wave the DOC and SMC in the air and expect forgiveness from prosecutors or insurers. Whilst useful, neither guarantees compliance. They simply show that, at a particular point in time in the past, the SMS, as applied by the Company and on board the yacht, met the minimum internationally agreed standards. Further, the external audit which led to the award of the DOC and SMC will have been based only on samples, will not have taken that long, and will have been far from exhaustive. By contrast, once a prosecutor or insurance company is able to access the various manuals and records, these can be scrutinised against actual findings at their leisure. It has been recognised that less respectable flag states may chose to ignore their responsibilities and may be prepared to certify compliance in any event. CONCLUSION From a legal viewpoint, the Code can be the owner’s closest ally or most feared enemy, depending on just how successful its implementation and maintenance has actually been. Owners do least have the luxury of being able to buy-in the appropriate expertise. Arranging and maintaining Code safety systems is a highly specialised task, however, and owners should grasp the fundamentals of the Code, and choose the appropriate managers accordingly. Thereafter, they should consider whether the managers and crew are successfully working together: this required by the Code and is important for morale and staff retention. Although the implementation of the Code does involve more paperwork and expense, it is the consequence of concerns about ineffective safety management stretching back many decades. Full and successful implementation will go a long way to ensuring that physical safety and pollution risks are kept under control. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Port State Control Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Port State Control

Some liabilities, such as those arising from collisions or the injury of a guest or crew member, are obvious. Other liabilities are less obvious: a large wash made by excessive speed can damage both fixed and floating objects some distance away. Occasionally, it may be possible to limit liability just by spelling this out in a well-drafted charter agreement or employment contract. Often, however, there will be no such contractual relationship with an aggrieved party. Home Handbook Managing / / Limiting Liability 26 February 2011 Last revised minutes 5 Reading time Some liabilities, such as those arising from collisions or the injury of a guest or crew member, are obvious. Other liabilities are less obvious: a large wash made by excessive speed can damage both fixed and floating objects some distance away. Occasionally, it may be possible to limit liability just by spelling this out in a well-drafted charter agreement or employment contract. Often, however, there will be no such contractual relationship with an aggrieved party. minutes 5 Reading time 26 February 2011 Last revised Some liabilities, such as those arising from collisions or the injury of a guest or crew member, are obvious. Other liabilities are less obvious: a large wash made by excessive speed can damage both fixed and floating objects some distance away. Occasionally, it may be possible to limit liability just by spelling this out in a well-drafted charter agreement or employment contract. Often, however, there will be no such contractual relationship with an aggrieved party. Yacht owners who are considered the legal owners, rather than just beneficial owners, can be held personally liable for incidents involving their yacht, putting their other assets at risk. Effective insurance, known as Protection & Indemnity (P&I) insurance, is crucial to protect owners against liabilities to third parties. International conventions allow owners to limit their liability, which provides a maximum payout for insurers and encourages trade. The limitation figure for liability does not differentiate between trading ships and yachts, even though yachts are often worth more. International conventions have specific requirements and standards of behavior that must be met to qualify for limitation. The limitation amount is determined based on the tonnage of the yacht in most countries, except for Italy, the United States, and parts of South America. The 1957 and 1976 Limitation Conventions have subtle differences, such as the circumstances under which the right to limit can be lost. Besides the owner, charterers, managers, captains, crew, employees, salvors, and insurers may also have the right to limit liability under the conventions. Owners can set up a fund with a court or competent authority, depositing an amount up to the limitation, to prevent the yacht from being detained in the future and protect other assets. Jurisdictional issues can arise, and different jurisdictions may apply different conventions and rules, making it crucial to seek legal advice promptly and establish jurisdiction in a favorable location with a lower limitation figure. The limitation amount is determined based on the tonnage of the yacht in most countries, except for Italy, the United States, and parts of South America. The 1957 and 1976 Limitation Conventions have subtle differences, such as the circumstances under which the right to limit can be lost. Besides the owner, charterers, managers, captains, crew, employees, salvors, and insurers may also have the right to limit liability under the conventions. Owners can set up a fund with a court or competent authority, depositing an amount up to the limitation, to prevent the yacht from being detained in the future and protect other assets. Jurisdictional issues can arise, and different jurisdictions may apply different conventions and rules, making it crucial to seek legal advice promptly and establish jurisdiction in a favorable location with a lower limitation figure. Yacht owners who are considered the legal owners, rather than just beneficial owners, can be held personally liable for incidents involving their yacht, putting their other assets at risk. Effective insurance, known as Protection & Indemnity (P&I) insurance, is crucial to protect owners against liabilities to third parties. International conventions allow owners to limit their liability, which provides a maximum payout for insurers and encourages trade. The limitation figure for liability does not differentiate between trading ships and yachts, even though yachts are often worth more. International conventions have specific requirements and standards of behavior that must be met to qualify for limitation. Even though yachts tend to be the only asset of an offshore owning company, it is possible, after a serious incident, for the individual ‘beneficial’ owner to be seen as the legal owner. This means that all the beneficial owner’s other assets are at risk. The need for effective insurance against liabilities to third parties, often known as Protection & Indemnity (‘P&I’) insurance, is therefore all the more important. Fortunately, throughout much of the world, the law gives owners the opportunity to restrict their liability. This is for two reasons. Firstly, insurers are more comfortable giving cover if they know what their maximum pay-out could be. Secondly, it is normally government policy to encourage trade. The owners of trading ships are more likely to put to sea if they know what their maximum liability could be. As an English judge recently put it, a ship owner might be prepared to lose his shirt, but not his entire wardrobe. As far as limitation is concerned, the law does not distinguish between trading ships and yachts, and, even though yachts are usually worth much more than similar-sized trading ships, the limitation figure will still be the same. CONVENTIONS But with the appropriate insurance in place, why should the owner need to even think about limitation? The answer is that the international conventions providing the limitation require certain standards of behaviour to be met before granting this invaluable right. That way, it is hoped, the sea is made a safer place for everyone. To understand how the opportunity to limit can slip through the owner’s fingers, it is necessary to look a little more closely at the international rules. It used to be that an owner could give up his ship to a claimant and walk away. As the ship would have been the beneficial owner’s largest asset, this was as much as a claimant could sensibly hope for anyway. This principal survives in Italy, the United States and parts of South America, but in most other countries the tonnage of the yacht will determine the owner’s limit in purely financial terms. A few nations still have no limitation regime whatsoever. EXAMPLE For example, a 35-metre yacht, with a gross tonnage of 120, negligently rams a cargo ship at night. Neither sinks, although the ship requires repairs costing £500,000. A further £500,000 of cargo is damaged, and the time spent carrying out repairs costs the owner another £500,000 in lost business. The yacht owner’s total liability in the UK would be just £650,000 approximately, not £1,500,000. The exact figure is determined using a basket of major currencies, and therefore changes daily. Most countries are party to either the 1957 or 1976 Limitation Conventions. There are subtle but vital differences between the two. The 1957 Convention contains a lower limitation figure, but no limitation is allowed where an incident was the owner’s fault or was the result of something the owner knew about. The 1976 Convention sets a higher figure, but the right to limit will only be lost where the owner did (or failed to do) something with the actual intention of causing loss, or not caring whether or not loss will be caused. Whether or not ‘owner’ here refers to the beneficial owner who chooses to skipper his own yacht, will depend on how transparent the owning company will be to the courts concerned. CHARTERER & MANAGER Aside from the owner, the 1957 Convention allows a charterer or manager, and the captain, crew and any other employees, to limit liability. The 1976 Convention adds salvors and insurers to that list. Broadly, both Conventions limit claims for loss of life or personal injury to any person carried on board, loss of or damage to property, liabilities for dealing with a wrecked or abandoned yacht, and the infringement of any non-contractual rights. The Convention limits do not apply to payments to salvors, or claims by the captain, crew or any of the owner’s employees where the law, or the employment contact itself, does not limit liability. Each Convention has lower limits for property claims than for injury or loss of life. FUND Under the Conventions, where the owner could benefit from limitation, a fund can be set up with a court, or other competent authority. The owner can then make a deposit or present a guarantee of no more than the limitation amount. The setting up of the fund is not a prerequisite to limitation, but will help prevent the yacht being detained in future over the same incident, which would require the security to be provided anyway prior to release, seriously disrupting any charter. The owner’s other assets are also placed out of the reach. This is particularly important where a court considers the owner to mean the beneficial owner. Where the yacht has been detained as security for a claim before a fund is established, it will have to be released. JURISDICTION Of course, any Convention will only be as effective as the law implementing it allows. Details, even the limits themselves and those entitled to them, can vary, as countries embroider the Conventions with their own unique thinking. A claim may be subject to a number of possible jurisdictions, each applying different Conventions in different ways. What’s more, each jurisdiction applies it’s own rules in deciding whether or not their courts can hear a claim, and if so whether their own law should apply. Jurisdiction can be founded by an owner, by bringing a pre-emptive action, in a jurisdiction with a favourably low limitation. Otherwise, there is a risk that an aggrieved party may arrest the yacht in a less favourable jurisdiction, presenting a vague case at that stage, leading to the case being later tried in those courts. Jurisdictional arguments are highly complex and an adventure playground for unscrupulous lawyers looking to rack up large bills! Lawyers have also been known to contrive to keep the business in their own courts, even where this is not in the owner’s best interest. INSURANCE Insurance policies normally state that where the assured would have been entitled to limit liability, but failed, unreasonably, to take the necessary steps to do so, the insurers’ liability will not exceed what would have been the limitation figure. This implies that there is an obligation to ensure, if possible, that the claim is subject to a jurisdiction with a relatively low limitation figure. What’s more, the burden of proving that any failure to limit is not unreasonable often rests with the assured. The assured is also normally under a separate obligation to obtain the necessary legal advice and assistance, as and when required. ADVICE The important point is for owners (or their managers) to seek advice promptly in the event of an incident, in order for the jurisdiction to be established where the limitation is lowest. At the outset, a trusted lawyer in a reputable jurisdiction must be instructed, with the guidance and consent of the insurer, in order to work out a strategy for minimising liability. Other local lawyers in the most favourable jurisdiction can then be appointed. The insurers will have a network of reliable lawyers covering most maritime jurisdictions. Liaising with insurers, from the moment an incident occurs, will bring the insurers’ considerable expertise to bear and prevent the insurer from later claiming that the assured failed to do everything possible to limit liability. As well as being a source of unrivalled pleasure and prestige, yacht ownership also carries with it certain responsibilities. As long as owners appreciate the importance of taking timely advice, from a reputable source, and of liaising closely with their insurers, they can rest assured that they have done everything possible to limit any liability. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Piracy & Protection Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Piracy & Protection

The unique Regulations Radar sets out the minimum documentation owners are obliged to maintain for yachts and superyachts registered in the United Kingdom and carrying no more than 12 guests. Other ship registries have similar obligations. This page aims to set out the minimum documentation owners are obliged to maintain for yachts registered in the United Kingdom and carrying no more than 12 guests. Other flags have similar obligations. Non-compliance can lead to port detention and/or fines, and can have implications for insurance cover. Most documents will be needed by the next owner, so if you're looking to sell check that all necessary paperwork is present before your yacht is placed on the market. Don't leave it until a sale has been agreed. M-Notices and Notes are useful guides but not authoritative statements of law, and are regularly withdrawn. Home Handbook Regulation / / Regulations Radar This page aims to set out the minimum documentation owners are obliged to maintain for yachts registered in the United Kingdom and carrying no more than 12 guests. Other flags have similar obligations. Non-compliance can lead to port detention and/or fines, and can have implications for insurance cover . Most documents will be needed by the next owner, so if you're looking to sell check that all necessary paperwork is present before your yacht is placed on the market. Don't leave it until a sale has been agreed. M-Notices and Notes are useful guides but not authoritative statements of law, and are regularly withdrawn. BOTH ≥400 GT or >15 persons BOTH ≥400 GT BOTH ≥150 GT BOTH ≥24 m LOA to <400 GT BOTH ≥100 GT or >15 persons BOTH >130 kW engine(s) after 1 Jan 2000 COMMERCIAL ≥24 m LOA or ≥150 GT before 21 July 1968 COMMERCIAL ≥24 m LLL or ≥150 GT before 21 July 1968 BOTH ≥300 GT COMMERCIAL ≥300 GT BOTH all sizes COMMERCIAL all sizes PRIVATE all sizes BOTH >1000 GT COMMERCIAL ≥500 GT BOTH ≥24 m LOA PLEASE SELECT THE RELEVANT SIZE(S) TO SEE WHICH DOCUMENTS ARE REQUIRED AND WHY. SELECT ALL RELEVANT CATEGORIES INCLUDING SMALLER SIZES. FOR EXAMPLE, FOR 499GT SEE ≥400GT, ≥300GT, ETC WHILE GT AND USAGE CAN BE FOUND ON YOUR VESSEL'S CERTIFICATE OF REGISTRATION, IT IS THE ACTUAL USE TO WHICH YOUR VESSEL IS PUT WHICH IS KEY. THIS GUIDE IS NOT UPDATED AUTOMATICALLY. CHECK THAT M-NOTICES/NOTES, REGULATIONS AND ACTS ARE STILL IN FORCE. CONTACT US FOR ASSISTANCE. THIS GUIDE IS NOT UPDATED AUTOMATICALLY. CHECK THAT M-NOTICES/NOTES, REGULATIONS AND ACTS ARE STILL IN FORCE. CONTACT US FOR ASSISTANCE. WHILE GT AND USAGE CAN BE FOUND ON YOUR VESSEL'S CERTIFICATE OF REGISTRATION, IT IS THE ACTUAL USE TO WHICH YOUR VESSEL IS PUT WHICH IS KEY SELECT ALL RELEVANT CATEGORIES INCLUDING SMALLER SIZES. FOR EXAMPLE, FOR 499GT SEE ≥400GT, ≥300GT, ETC PLEASE SELECT THE RELEVANT SIZE(S) TO SEE WHICH DOCUMENTS ARE REQUIRED AND WHY PRIVATE all sizes N/A Convention Merchant Shipping Act 1970 Statute Merchant Shipping (Crew Agreements, Lists of Crew and Discharge of Seamen) Regulations 1991 Regulation N/A Code of Practice MGN 474 M-Notice//Note Crew Agreement and List of Crew COMMERCIAL ≥24 m LLL or ≥150 GT before 21 July 1968 Various Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Vessels in Commercial Use for Sport or Pleasure) Regulations 1998, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annex M Code of Practice N/A M-Notice//Note REG Yacht Code Certificate Various Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Vessels in Commercial Use for Sport or Pleasure) Regulations 1998, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annex M & N Code of Practice N/A M-Notice//Note Certificate of Classification COMMERCIAL ≥24 m LOA or ≥150 GT before 21 July 1968 International Convention on Load Lines 1966/1988 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Load Line) Regulations 1998, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annex M Code of Practice MGN 579 MSN 1752 M-Notice//Note Load Line Conditions of Assignment International Convention on Load Lines 1966/1988 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Load Line) Regulations 1998, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annex M Code of Practice MGN 579 MSN 1752 M-Notice//Note International Load Line Certificate International Convention on Load Lines 1966/1988 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Load Line) Regulations 1998, as amended Regulation Red Ensign Group Yacht Code, Part A, Chapter 11 Code of Practice MGN 579 M-Notice//Note Stability Information COMMERCIAL all sizes Maritime Labour Convention 2006 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Maritime Labour Convention) (Survey and Certification) Regulations 2013 Regulation N/A Code of Practice MSN 1849 M-Notice//Note On-board complaints procedure International Convention for the Safety of Life at Sea 1974 (SOLAS), Chapter IV Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Radio Installations) Regulations 1998 Regulation Red Ensign Group Yacht Code, Part A, Chapter 16 Code of Practice MGN 530 M-Notice//Note GMDSS Log Book Maritime Labour Convention 2006 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Hours of Work) Regulations 2018 Regulation Red Ensign Group Yacht Code, Common Annexes, Annex G Code of Practice MSN 1877 (M) Amendment 1 M-Notice//Note Table of Shipboard Working Arrangements N/A Convention Merchant Shipping Act 1970, as amended Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Official Log Book) Regulations 1981, as amended Regulation N/A Code of Practice N/A M-Notice//Note Official Log Book Maritime Labour Convention 2006 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Maritime Labour Convention) Minimum Requirements for Seafarers etc. Regulations 2014 Regulation N/A Code of Practice MGN 477 (M) Amendment 4 M-Notice//Note Seafarer Employment Agreement Maritime Labour Convention 2006 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Hours of Work) Regulations 2018 Regulation Red Ensign Group Yacht Code, Common Annexes, Annex G Code of Practice MSN 1877 Amendment 1 M-Notice//Note Record of Hours of Rest of Seafarers COMMERCIAL ≥300 GT International Convention for Safety of Life at Sea (SOLAS) 1974/1988 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Load Line) Regulations 1998, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annexes M & N Code of Practice MSN 1751 M-Notice//Note Safety Radio Certificate COMMERCIAL ≥500 GT International Convention for Safety of Life at Sea (SOLAS) Chapter XI-2 International Ship and Port Facility (ISPS) Code Convention European Communities Act 1972 (originally) Statute Ship and Port Facility (Security) Regulations 2004, as amended Regulation Red Ensign Group Yacht Code, Part A, Chapter 11 Code of Practice N/A M-Notice//Note Ship Security Assessment Maritime Labour Convention 2006 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Maritime Labour Convention) (Survey and Certification) Regulations 2013 Regulation Red Ensign Group Yacht Code, Common Annexes, Annex G Code of Practice MSN 1848 Amendment 3 M-Notice//Note Declaration of Maritime Labour Compliance International Convention for Safety of Life at Sea (SOLAS) Chapter XI-! Convention European Communities Act 1972 (originally) Statute Ship and Port Facility (Security) Regulations 2004, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annex M Code of Practice N/A M-Notice//Note Continuous Synopsis Record International Convention for the Safety of Life at Sea 1974 (SOLAS), Chapter IX Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (International Safety Management (ISM) Code) Regulations 2014, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annex M Code of Practice N/A M-Notice//Note Safety Management Certificate Maritime Labour Convention 2006 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Maritime Labour Convention) (Survey and Certification) Regulations 2013 Regulation Red Ensign Group Yacht Code, Common Annexes, Annex G Code of Practice MSN 1848 Amendment 3 M-Notice//Note Maritime Labour Certificate (including DMLC I and DMLC II) International Convention for Safety of Life at Sea (SOLAS) Chapter XI-2 International Ship and Port Facility (ISPS) Code Convention European Communities Act 1972 (originally) Statute Ship and Port Facility (Security) Regulations 2004, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annex M Code of Practice N/A M-Notice//Note International Ship Security Certificate International Convention for the Safety of Life at Sea 1974 (SOLAS), Chapter IX Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (International Safety Management (ISM) Code) Regulations 2014, as amended Regulation N/A Code of Practice N/A M-Notice//Note Document of Compliance International Convention on Standards of Training and Certification and Watchkeepers 1978/1995 (STCW) Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Standards of Training, Certification and Watchkeeping) Regulations 2015, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annex G and M Code of Practice MSN 1868 Amendment 1 M-Notice//Note Safe Manning Document International Convention for Safety of Life at Sea (SOLAS) 1974/1988 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Survey and Certification) Regulations 2015, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annexes M & N Code of Practice MSN 1751 M-Notice//Note Safety Equipment Certificate International Convention for Safety of Life at Sea (SOLAS) 1974/1988 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Survey and Certification) Regulations 2015, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annexes M & N Code of Practice MSN 1751 M-Notice//Note Safety Construction Certificate International Convention for the Safety of Life at Sea 1974 (SOLAS), Chapter IX Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (International Safety Management (ISM) Code) Regulations 2014, as amended Regulation N/A Code of Practice N/A M-Notice//Note Safety Management System International Convention for Safety of Life at Sea (SOLAS) Chapter XI-2 & International Ship and Port Facility (ISPS) Code Convention European Communities Act 1972 (originally) Statute Ship and Port Facility (Security) Regulations 2004, as amended Regulation Red Ensign Group Yacht Code, Part A, Chapter 11 Code of Practice N/A M-Notice//Note Ship Security Plan BOTH all sizes International Convention for the Control and Management of Ships’ Ballast Water and Sediments 2004 Convention Merchant Shipping Act 1995, as amended Statute The Merchant Shipping (Control and Management of Ships' Ballast Water and Sediments) Regulations 2022 Regulation N/A Code of Practice None M-Notice//Note Ballast water management plan (if applicable) N/A Convention Wireless Telegraphy Act 2006 Statute N/A Regulation Red Ensign Group Yacht Code, Common Annexes, Annex M Code of Practice N/A M-Notice//Note Ship Station Radio Licence N/A Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping and Fishing Vessels (Health and Safety at Work) Regulations 1997, as amended Regulation Red Ensign Group Yacht Code, Part A, Chapter 23A Code of Practice MGN 539 M-Notice//Note Code of Safe Working Practices International Convention for the Control and Management of Ships’ Ballast Water and Sediments 2004 Convention Merchant Shipping Act 1995, as amended Statute The Merchant Shipping (Control and Management of Ships' Ballast Water and Sediments) Regulations 2022 Regulation N/A Code of Practice None M-Notice//Note Ballast water record book (if applicable) International Convention for the Control and Management of Ships’ Ballast Water and Sediments 2004 Convention Merchant Shipping Act 1995, as amended Statute The Merchant Shipping (Control and Management of Ships' Ballast Water and Sediments) Regulations 2022 Regulation Red Ensign Group Yacht Code, Common Annexes, Annexes L & M Code of Practice None M-Notice//Note International Ballast Water Management Certificate (if applicable) BOTH >130 kW engine(s) after 1 Jan 2000 Convention for the Prevention of Pollution from Ships 1973/1978 (MARPOL), Annex VI Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Prevention of Air Pollution from Ships) Regulations 2008, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annex M Code of Practice MSN 1819 M-Notice//Note Engine International Air Pollution Prevention Certificate & NOx technical file BOTH ≥24 m LOA International Convention on Tonnage Measurement of Ships 1969 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Tonnage) Regulations 1997, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annex M Code of Practice MGN 398 M-Notice//Note International Tonnage Certificate BOTH ≥24 m LOA to <400 GT N/A Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Anti-Fouling Systems) Regulations 2009 Regulation Red Ensign Group Yacht Code, Common Annexes, Annexes L & M Code of Practice MGN 398 M-Notice//Note Declaration on Anti-fouling System BOTH ≥100 GT or >15 persons Convention for the Prevention of Pollution from Ships 1973/1978 (MARPOL), Annex V Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Prevention of Pollution by Garbage from Ships) Regulations 2020 Regulation Red Ensign Group Yacht Code, Common Annexes, Annexes L & M Code of Practice MGN 398 M-Notice//Note Garbage management plan BOTH ≥150 GT Convention for the Prevention of Pollution from Ships 1973/1978 (MARPOL), Annex I Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Prevention of Oil Pollution) Regulations 2019, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annexes L & M Code of Practice None M-Notice//Note Oil Record Book BOTH ≥300 GT N/A Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Compulsory Insurance of Shipowners for Maritime Claims) Regulations 2012 Regulation N/A Code of Practice N/A M-Notice//Note Certificate of Insurance (third party liabilities) Nairobi International Convention on the removal of Wrecks 2007 Convention Merchant Shipping Act 1995, as amended, & Wreck Removal Convention Act 2011 Statute N/A Regulation Red Ensign Group Yacht Code, Common Annexes, Annexes L & M Code of Practice MIN 499 M-Notice//Note Wreck Removal Insurance Certificate BOTH ≥400 GT Convention for the Prevention of Pollution from Ships 1973/1978 (MARPOL), Annex I Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Prevention of Oil Pollution) Regulations 2019, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annex F Code of Practice MGN 231 M-Notice//Note Shipboard Oil Pollution Emergency Plan Convention for the Prevention of Pollution from Ships 1973/1978 (MARPOL), Annex VI Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Prevention of Air Pollution from Ships) (Miscellaneous Amendments) Regulations 2019 Regulation Red Ensign Group Yacht Code, Common Annexes, Annex M Code of Practice MGN 462 M-Notice//Note International Energy Efficiency Certificate International Convention on the Control of Harmful Anti-Fouling Systems on Ships 2001 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Anti-Fouling Systems) Regulations 2009 Regulation Red Ensign Group Yacht Code, Common Annexes, Annexes L & M Code of Practice MGN 398 M-Notice//Note International Anti-fouling System Certificate Convention for the Prevention of Pollution from Ships 1973/1978 (MARPOL), Annex I Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Prevention of Oil Pollution) Regulations 2019, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annexes L & M Code of Practice None M-Notice//Note International Oil Pollution Prevention Certificate Convention for the Prevention of Pollution from Ships 1973/1978 (MARPOL), Annex VI Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Prevention of Air Pollution from Ships) Regulations 2008, as amended Regulation Red Ensign Group Yacht Code, Common Annexes, Annex M Code of Practice MSN 1819 MGN 381 MGN 386 MSN 1819 Amendment M-Notice//Note International Air Pollution Prevention Certificate Convention for the Prevention of Pollution from Ships 1973/1978 (MARPOL), Annex VI Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Prevention of Air Pollution from Ships) (Miscellaneous Amendments) Regulations 2019 Regulation N/A Code of Practice MGN 462 M-Notice//Note Ship Energy Efficiency Management Plan BOTH ≥400 GT or >15 persons Convention for the Prevention of Pollution from Ships 1973/1978 (MARPOL), Annex IV Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Prevention of Pollution by Sewage from Ships) Regulations 2020 Regulation Red Ensign Group Yacht Code, Common Annexes, Annex M Code of Practice MGN 631 M-Notice//Note International Sewage Pollution Prevention Certificate Convention for the Prevention of Pollution from Ships 1973/1978 (MARPOL), Annex V Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Prevention of Pollution by Sewage from Ships) Regulations 2020 Regulation Red Ensign Group Yacht Code, Common Annexes, Annex M Code of Practice MGN 632 Amendment 1 M-Notice//Note Garbage record book and reception facilities receipts BOTH >1000 GT International Convention on Civil Liability for Bunker Oil Pollution Damage 2001 Convention Merchant Shipping Act 1995, as amended Statute Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 Regulation Red Ensign Group Yacht Code, Common Annexes, Annexes L & M Code of Practice MGN 507 (M+F) Amendment 1 M-Notice//Note Civil Liability Certificate for Bunker Oil Pollution Damage This page aims to set out the minimum documentation owners are obliged to maintain for yachts registered in the United Kingdom and carrying no more than 12 guests. Other flags have similar obligations. Non-compliance can lead to port detention and/or fines, and can have implications for insurance cover. Most documents will be needed by the next owner, so if you're looking to sell check that all necessary paperwork is present before your yacht is placed on the market. Don't leave it until a sale has been agreed. M-Notices and Notes are useful guides but not authoritative statements of law, and are regularly withdrawn.

The Owners Club's Members' details are held in confidence by our General Secretary, and aren’t revealed to any third party, or other Members. The better part of valour being discretion isn’t just the Club’s guiding ethos. It’s a binding legal obligation. Home About Discretion / / The Soul of Discretion THE LAST GREAT LUXURY Privacy Policy Privacy is the last great luxury of our times. Highly prized by owners, it’s usually a contributing factor in buying a yacht. In an age where data has become a commodity, Members are glad to know that our discretion is absolute. Members' details are held in confidence by the Club’s General Secretary, and aren’t revealed to any third party, or other Members. The better part of valour being discretion isn’t just the Club’s guiding ethos. It’s a binding legal obligation. Some in the yachting industry can be fairly indiscrete. If we, as owners, are going to come together as a club, then we need to safeguard our privacy. This has been achieved. OWNER, 35M MY DISCRETION IS OUR DUTY Learn More Our General Secretary is an English lawyer, for whom discretion isn’t just a promise but a regulated professional requirement. Used to maintaining client confidentiality, he is a Partner at a leading international firm, regulated by the Solicitors Regulation Authority, the Financial Conduct Authority and the London Stock Exchange. The Club’s management company is registered with the United Kingdom Information Commissioner’s Office pursuant to the UK General Data Protection Regulation and the Data Protection Act 2018. By law, the data the Club holds must be held securely and protected against unlawful processing and accidental loss.

Just because charterer guests have paid a great deal of money for the exclusive use of a superyacht, this does not mean that he (or she) has the right to do with the boat and crew as he pleases. A Member recently sought advice with regard to redress following a charter during which guests behaved in a way which was at best depraved – and at worst illegal. Home Handbook Chartering Out / / Difficult Guests 3 October 2017 Last revised minutes 3 Reading time Just because charterer guests have paid a great deal of money for the exclusive use of a superyacht, this does not mean that he (or she) has the right to do with the boat and crew as he pleases. A Member recently sought advice with regard to redress following a charter during which guests behaved in a way which was at best depraved – and at worst illegal. minutes 3 Reading time 3 October 2017 Last revised Just because charterer guests have paid a great deal of money for the exclusive use of a superyacht, this does not mean that he (or she) has the right to do with the boat and crew as he pleases. A Member recently sought advice with regard to redress following a charter during which guests behaved in a way which was at best depraved – and at worst illegal. In the absence of an agreement stating otherwise, the broker marketing the yacht is considered the owner's agent and must act in the owner's best interests. Once the broker books the charter, the owner is bound by the charter agreement and must provide the yacht to the charterer. The terms of the charter agreement are often based on the MYBA Charter Agreement, which allows the owner to back out only in exceptional circumstances and with financial consequences. The captain is required by law to refuse illegal instructions from the charterer, but there are other unsavory or immoral actions that may not be illegal. The MYBA form explicitly prohibits certain behaviors, such as causing nuisance or disrepute, commercial photo shoots, and harassment of crewmembers. Any breach of the charter agreement may entitle the owner to terminate the contract immediately and claim damages. The captain must raise issues with the charterer before the owner can terminate the contract, according to the MYBA Charter Agreement. Despite the challenges, chartering can help offset the costs of owning large yachts with the right guidance and support. The MYBA form explicitly prohibits certain behaviors, such as causing nuisance or disrepute, commercial photo shoots, and harassment of crewmembers. Any breach of the charter agreement may entitle the owner to terminate the contract immediately and claim damages. The captain must raise issues with the charterer before the owner can terminate the contract, according to the MYBA Charter Agreement. Despite the challenges, chartering can help offset the costs of owning large yachts with the right guidance and support. In the absence of an agreement stating otherwise, the broker marketing the yacht is considered the owner's agent and must act in the owner's best interests. Once the broker books the charter, the owner is bound by the charter agreement and must provide the yacht to the charterer. The terms of the charter agreement are often based on the MYBA Charter Agreement, which allows the owner to back out only in exceptional circumstances and with financial consequences. The captain is required by law to refuse illegal instructions from the charterer, but there are other unsavory or immoral actions that may not be illegal. Had the owner known who the charterer was, he would have never have agreed. The charter broker was aware of the charterer’s reputation but remained silent until just before the start of the charter. In the absence of agreement to the contrary, the broker marketing the yacht on behalf of the owner will often be, in law, the owner’s agent. As such, the broker must perform with the appropriate care and skill, and not allow any conflict between personal interests and those of the principal. By booking a charter with someone known to be unsuitable, it could be said that the broker wasn’t careful and just wanted the commission. THE AGREEMENT Once the broker has booked the charter, however, the owner will have been bound by the charter agreement, and is bound to provide his yacht to the charterer. The terms will have been set out in the charter agreement. The most common terms are those published by the Mediterranean Yacht Brokers Association (‘MYBA’), which have also been adopted by the American Yacht Charter Association. The MYBA Charter Agreement only allows the owner to back out as a result of circumstances beyond his control, on pain of reimbursing the owner plus an extra 50%. EDGY BEHAVIOUR While, subject to the charter agreement, the yacht is the charterer’s to do with as he pleases, the captain is obliged by law to refuse to comply with illegal instructions. However, there are many things a charterer may do which, while unsavoury or immoral, are not illegal. The MYBA form therefore expressly bans, for example, behaviour causing nuisance or disrepute, commercial photo shoots, and harassment of crewmembers. Member’s Experience: “ I have been chartering my yachts for more than 15 years and have maintained an excellent relationship with brokers and charterers. In fact, my yachts are considered some of the most successful yachts on the charter market. What has occurred is certainly an aberration and not to be confused with the excellent work the broker community has done these many years. ” Generally, any breach may allow the owner to treat the charter as having come to an end immediately and claim damages, or just claim damages afterwards, depending on how serious the breach is. But the owner must have suffered some sort of actual loss as a result of the breach: an upset crew may not be enough. RAISING ISSUES The MYBA Charter Agreement specifically requires the captain to raise issues with the charterer first, before the owner has a chance to terminate the contract. A failure to do this could arguably be seen as a waiver of the owner’s rights, and owners may wish to amend such standard form contracts. The Member was at pains to point out that these circumstances are unusual, commenting, “I have been chartering my yachts for more than 15 years and have maintained an excellent relationship with brokers and charterers. In fact, my yachts are considered some of the most successful yachts on the charter market. What has occurred is certainly an aberration and not to be confused with the excellent work the broker community has done these many years.” DON’T BE PUT OFF For all the pitfalls and hurdles, chartering can substantially offset the costs associated with the ownership of large yachts – with the right guidance and support. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about How to Charter Out Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about How to Charter Out

As Members know, yachts aren’t run on shoestring budgets. And most of the money is spent not by them in person, but by their captains and other trusted third parties. In highly competitive marketplaces, there is an incentive to buy business with formal ‘commissions’, extravagant ‘thank you’s – or perhaps just a good old brown envelope. Home Handbook Employing / / Commission or Kickback? 2 November 2013 Last revised minutes 3 Reading time As Members know, yachts aren’t run on shoestring budgets. And most of the money is spent not by them in person, but by their captains and other trusted third parties. In highly competitive marketplaces, there is an incentive to buy business with formal ‘commissions’, extravagant ‘thank you’s – or perhaps just a good old brown envelope. minutes 3 Reading time 2 November 2013 Last revised As Members know, yachts aren’t run on shoestring budgets. And most of the money is spent not by them in person, but by their captains and other trusted third parties. In highly competitive marketplaces, there is an incentive to buy business with formal ‘commissions’, extravagant ‘thank you’s – or perhaps just a good old brown envelope. T he Bribery Act 2010 in th e UK is considered one of the toughest anti-bribery laws globally, with similar principles found in the US Foreign Corrupt Practices Act. The Act applies extraterritorially, meaning that a crime can be committed even if the transaction occurs outside of the UK. There are four key offences under the Act: bribing, receiving a bribe, bribing a foreign public official, and failing to prevent bribery. Bribing involves offering or promising a financial or other advantage in exchange for improper performance of a function or activity, while receiving a bribe includes requesting or accepting such an advantage. Local practices should be disregarded when determining improperness, unless they are part of the written local law. Hospitality can be considered bribery if it is disproportionately generous, especially in industries focused on luxury. The offence of failing to prevent bribery applies to all commercial organizations, including companies and partnerships operating in the UK. Bribery crimes committed outside the UK can be investigated and prosecuted if there is a "close connection" to the UK, such as being a UK passport holder or ordinarily resident. The Serious Fraud Office (SFO) in the UK handles corruption allegations involving UK nationals or incorporated bodies overseas, and there is international cooperation in investigating and prosecuting bribery and corruption. The United States' Foreign Corrupt Practices Act allows payments to foreign public officials to expedite their duties, even if it violates local laws. Civil actions can also be taken against individuals involved in bribery, and a criminal conviction serves as proof of civil liability. The offence of failing to prevent bribery applies to all commercial organizations, including companies and partnerships operating in the UK. Bribery crimes committed outside the UK can be investigated and prosecuted if there is a "close connection" to the UK, such as being a UK passport holder or ordinarily resident. The Serious Fraud Office (SFO) in the UK handles corruption allegations involving UK nationals or incorporated bodies overseas, and there is international cooperation in investigating and prosecuting bribery and corruption. The United States' Foreign Corrupt Practices Act allows payments to foreign public officials to expedite their duties, even if it violates local laws. Civil actions can also be taken against individuals involved in bribery, and a criminal conviction serves as proof of civil liability. T he Bribery Act 2010 in th e UK is considered one of the toughest anti-bribery laws globally, with similar principles found in the US Foreign Corrupt Practices Act. The Act applies extraterritorially, meaning that a crime can be committed even if the transaction occurs outside of the UK. There are four key offences under the Act: bribing, receiving a bribe, bribing a foreign public official, and failing to prevent bribery. Bribing involves offering or promising a financial or other advantage in exchange for improper performance of a function or activity, while receiving a bribe includes requesting or accepting such an advantage. Local practices should be disregarded when determining improperness, unless they are part of the written local law. Hospitality can be considered bribery if it is disproportionately generous, especially in industries focused on luxury. In the United Kingdom, giving incentives and rewards may be a criminal offence – or not – according to whether it falls foul of the Bribery Act 2010 . This law is widely recognised as the toughest of its kind in the world, but its principles are much the same in the rest of the world, including the United States’ Foreign Corrupt Practices Act. Significantly, under the Bribery Act, a crime may be committed even if the transaction takes place outside of the UK. This was already the effect of a small and little-known piece of anti-terror legislation introduced in 2001, but the globe-trotting aspects of the 2010 Act are clearer and more coherent. COMMISSIONS To be clear, a lot of commission arrangements are perfectly legal – but it’s easy to overstep the mark, and there can be a false assumption that formality means legality. The penalties for getting it wrong include an unusually long prison sentence and unlimited fines. OFFENCES There are four key offences: Bribing Receiving a bribe Bribing a foreign public official, and Failing to prevent bribery Bribing occurs when a person offers, gives, or promises to give, a financial or other advantage to someone else in exchange for ‘improperly’ performing a function or activity. Receiving a bribe is defined as requesting, accepting or agreeing to accept such an advantage. An activity will be ‘improperly’ performed when any expectation of good faith or impartiality has been breached, or when the function has been performed in a way not expected of a person in a position of trust. Helpful, this now clarifies what is expected when a commission is an overt element of any business model – even where this may lead to a reduced commission. GREASING PALMS So what about those instances where greasing palms to get things to happen is just the way things work? The Act states that local practises should be disregarded when deciding on improperness – unless they form part of the written local law. While the UK authorities are alive to the necessity of ‘facilitation payments’, official tolerance relates only to small payments, made by companies with the right bribery policies and procedures in place. HOSPITALITY Hospitality can constitute bribery if it is disproportionately generous. In an industry devoted to luxury, it can be easy for crewmembers to confuse the lifestyle of their wealthy employers with their own – and not think twice about receiving hospitality which, seen from afar, is completely over the top. PREVENTION The offence of failing to prevent bribery applies only to ‘commercial organisations’, but this includes any company or partnership carrying on any business in the UK. Conceivably, this could yacht owning companies managed from the UK. With regard to the first three offences, while crimes committed outside the UK (except on board UK-flagged vessels) are normally beyond the jurisdiction of the courts, this is not the case with bribery. Given its seriousness, it’s one of a unique group of crimes (along with terrorism and war crimes) that the authorities can and will investigate worldwide. All that’s needed is a ‘close connection’ with the UK – including just being a passport-holder or ordinarily resident. INVESTIGATION The UK’s Serious Fraud Office (SFO) acts as the focal point for any allegations of corruption by UK nationals or incorporated bodies overseas, while the City of London Police has an Overseas Anti-Corruption Unit with the specific function of supporting overseas corruption investigations undertaken by the SFO. The idea that prosecuting authorities have tentacles that can reach worldwide is not limited to the UK. As with many areas of the criminal law, most countries’ laws are broadly similar, and both European Union and United Nations conventions provide for international co-operation with regard to both the investigation and prosecution of bribery and corruption. UNITED STATES While the reach of law enforcers in the United States is equally global in nature, however, a slight difference can be seen in their approach, as the Foreign Corrupt Practices Act of 1977 allows payments to be made to foreign public officials to facilitate or expedite their performance of the duties they’re already bound to perform, even if this still violates local laws. So making a payment to an official to speed up a visa application, for example, would be acceptable. CIVIL ACTION In addition to the threat of prosecution, an owner may sue an employee or other agent for any loss – and, while a criminal conviction is not necessary for a civil action, it would be undeniable proof of civil liability. The owner may also be able to withdraw from the contract agreed to by the agent, whether or not he or she brings an action against the agent, and this option may be useful if, for example, the owner has managed to find a better deal elsewhere. CONCLUSION While it might seem that the authorities are coming down rather hard on corruption, it’s not because they are trying to spearhead some kind of moral crusade but simply because corruption distorts rational product and service choices, which can ultimately prevent the cream of the industry from rising to the top, distort markets and threaten economic growth. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? 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Unavailable at present Latest Position Superyachts'R'Us Listing Email WhatsApp +44 7773 246 246 Central Agent 88 m Length Thompson Yachts Builder 2010 Build year 1502 Gross tonnage Malta Registry Particulars Representation

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Many of our Members will already be familiar with the reasoning behind corporate ownership and the use of trusts. If that’s you, then feel free to skip to the next step of building your team. Too many buyers, however, still purchase in their own names. As well as raising privacy concerns, legal owners can be held liable for accidents and regulatory non-compliance. Corporate services aren’t cheap, but it’s a sensible choice when building and owning a large yacht. Home Handbook Building / / A Firm Foundation 10 May 2023 Last revised minutes 5 Reading time Many of our Members will already be familiar with the reasoning behind corporate ownership and the use of trusts. If that’s you, then feel free to skip to the next step of building your team . Too many buyers, however, still purchase in their own names. As well as raising privacy concerns, legal owners can be held liable for accidents and regulatory non-compliance. Corporate services aren’t cheap, but it’s a sensible choice when building and owning a large yacht. minutes 5 Reading time 10 May 2023 Last revised Many of our Members will already be familiar with the reasoning behind corporate ownership and the use of trusts. If that’s you, then feel free to skip to the next step of building your team . Too many buyers, however, still purchase in their own names. As well as raising privacy concerns, legal owners can be held liable for accidents and regulatory non-compliance. Corporate services aren’t cheap, but it’s a sensible choice when building and owning a large yacht. Companies have a seperate legal personality, which allows companies to buy and sell goods and services like people. Trusts are arrangements where property is held by a trustee for the benefit of a beneficiary, sometimes with the same person as the settlor and beneficiary. Companies and trusts can be used to protect assets, reduce tax exposure, and shield personal wealth. Yachts can be owned through companies to ring-fence liability and protect other assets of the owner. Yachts can still be arrested in cases of accidents, pollution allegations, or unpaid debts. Releasing a yacht release from arrest requires payment of the claim or providing acceptable security, often requiring a personal guarantee from the beneficial owner. Lifting the corporate veil may expose individuals involved in fraudulent or tax evasion. The use of nominees can help to protect the identity of real directors and shareholders. Privacy is not guaranteed, as international treaties and conventions may override privacy laws, and trusts aren't always recognized. Offshore jurisdictions offer tax-efficient and legal ways for multinational companies and yacht owners, but careful consideration of jurisdiction is essential for reputation, integrity, costs, rule of law, political stability, and practicalities of winding-up corporate structures. Lifting the corporate veil may expose individuals involved in fraudulent or tax evasion. The use of nominees can help to protect the identity of real directors and shareholders. Privacy is not guaranteed, as international treaties and conventions may override privacy laws, and trusts aren't always recognized. Offshore jurisdictions offer tax-efficient and legal ways for multinational companies and yacht owners, but careful consideration of jurisdiction is essential for reputation, integrity, costs, rule of law, political stability, and practicalities of winding-up corporate structures. Companies have a seperate legal personality, which allows companies to buy and sell goods and services like people. Trusts are arrangements where property is held by a trustee for the benefit of a beneficiary, sometimes with the same person as the settlor and beneficiary. Companies and trusts can be used to protect assets, reduce tax exposure, and shield personal wealth. Yachts can be owned through companies to ring-fence liability and protect other assets of the owner. Yachts can still be arrested in cases of accidents, pollution allegations, or unpaid debts. Releasing a yacht release from arrest requires payment of the claim or providing acceptable security, often requiring a personal guarantee from the beneficial owner. Companies are said by lawyers to have their own ‘legal personality’. This colourful phrase just means that they are able to buy and sell goods and services in just the same way as a human being. Although corporations were developed as a means to allow entrepreneurs to raise money and conduct business without risking their personal wealth, companies can also be used for non-commercial purposes – as vehicles for asset ownership. TRUSTS Trusts are a rather different concept. They have no such personality. They are simply an arrangement whereby property is handed over by one party (the ‘settlor’) to another (the ‘trustee’) for the benefit of another (the ‘beneficiary’), on the basis that the property will be held and used as the trustee wishes. The settlor and beneficiary can be the same person. Although legal title is actually transferred from the settlor to the trustee, the beneficiary’s rights are recognisable and enforceable by the courts. As with companies, the use of trusts has come along way since their invention: they were first used to protect the property of medieval knights while away on crusade. BENEFITS Now and then, yachts are involved in accidents. Liability could easily exceed the value of the yacht, and, should the owner be held liable, his or her other assets are at risk. More sensible, then, to ring-fence any such source of liability by owning the yacht through a company. Companies and trusts can also be used, quite lawfully, to reduce an individual’s apparent wealth and personal tax exposure, and to protect assets from creditors where the beneficial owner is asked to provide personal guarantees in respect of the financing of his or her commercial activities. With very limited exceptions, yachts must, by law, be registered somewhere. In some cases, including during the build stage. Shipping registers being open to inspection by the public, details of a yacht’s owner are readily available. Most owners just don’t like the idea of journalists – or perhaps even former spouses – knowing what they own. Although the identity of company directors and shareholders is often a matter of public record, many jurisdictions allow directorships and shares to be held in the name of nominees. LIMITATIONS No amount of corporate structing can prevent the arrest of the yacht itself. Where this happens, the yacht is legally prevented from leaving her mooring. Typically, police or customs officers present the yacht with the court papers – this is the process which used to involve the nailing of a writ to the mast. Yachts are often arrested following a collision, an allegation of pollution, or where a good or service has been provided to the yacht without the provider (including crew) having been paid. There is no need for judgment to have been given and there may be little or no warning before the yacht is arrested – potentially leaving the owner in an awkward and embarrassing position in the middle of a busy charter season. The only way to release the yacht from arrest is either to pay the claim or to provide security. Such security may only be acceptable if provided or supported by a large bank. In turn, the bank will require a personal guarantee from the yacht’s beneficial owner. On occasion it may be possible to look behind the company at the individuals involved. This is known as lifting the corporate veil. The laws of certain jurisdictions, for example, state that where it appears that, in the course of winding-up a bankrupt company, transactions have been carried out with the intent to defraud creditors, a court may declare the individuals involved liable. Criminal sanctions can also apply. Creditors here only includes those owed money at the time the transfer was made, excluding future creditors. The burden of proving the necessary intent lies with the creditors. The same principle applies where it looks as if a company was set up to frustrate a court order to freeze assets. The use of nominees only prevents the true identity of directors and shareholders being made available to the public. It is not normally possible to offload liability onto the nominees, and there is likely to be a clause in the agreement to set up the company, obliging the actual directors and shareholders to indemnify the nominees. Privacy cannot be entirely guaranteed in any event. Not unreasonably, international treaties on the exchange of information relating to criminal activities, including tax evasion, can allow require even the strongest privacy laws to be brushed aside. Further, although trusts are usually recognised in common law jurisdictions, and some countries are party to an international convention on the recognition of trusts, known as the Hague Trust Convention, trusts aren’t always recognised. One final drawback of buying through a company is that the laws which automatically protect consumers only applies to people - not to companies. Such laws are of limited value where a bespoke yacht is being built, but consumers will have ambiguous build contract provisions interpreted in their favour. CHOICE OF JURISDICTION Offshore jurisdictions still have a reputation as being sunny places for shady people. In fact, virtually all the world’s leading multinationals use offshore companies and trusts to undertake business in a private, tax-efficient yet entirely legal way. ‘Offshore’ simply means a jurisdiction other the one someone is already resident or domiciled. They certainly don’t need to be far-flung islands – although many are as it can form a lucrative boost to otherwise tourist-dependent economies. In fact, a good example of an offshore centre is the United Kingdom – which was becoming increasingly popular long before Brexit. For yacht owners, the principal advantage of using a respectable, well-known offshore jurisdiction is that there is rarely the need to reinvent the wheel: they are geared up to provide yacht owning structures. As these activities often provide a sizeable proportion of foreign income, their governments make it a priority to make matters simple for those looking for this type of service. It is important to choose the jurisdiction(s) with care, however. No two are the same. There are bad apples in the barrel, especially with regards the integrity of local practitioners. With companies, but more particularly with trusts – where legal title is transferred to a local trustee who may have discretionary powers – there exists opportunities to extract more from their clients than had been expected. Other factors to consider include initial and ongoing costs (including local taxes), international reputation, and the strength of their rule of law – in other words how tough their courts are. Political stability is another important factor, as is the time zone, the exchange controls, and any escape provisions – which allow companies to change jurisdictions while maintaining their legal personality and trusts to be transferred without needing to be rewritten. Finally, the most overlooked aspect is the ease, timeframe and expense of winding-up a corporate structure when it’s no longer needed. Working with a local branch of an international legal or accounting group may provide reassurance, but on the other hand one may end up being steered towards just those places where they happen to have an office. Ideally, guidance in the earliest stages should be sought from an independent, trusted source, capable of providing an impartial, global overview. Reach out to our General Secretary if you need a steer. With the correct ownership structure in place, it's time to build your team . Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Build Your Team Join the discussion over in the Club's group Questions or comments? 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Unavailable at present Latest Position Wright A Way & Co Listing Email WhatsApp +44 7773 246 246 Central Agent 22 m Length Italia srl Builder 1994 Build year 45 Gross tonnage Jersey Registry Particulars Sunray

Other standard forms are in use, but the poorly drafted and incomplete MYBA Memorandum of Agreement (MOA) remains the standard agreement for the sale and purchase of yachts, used by brokers large and small, whether a member of that organisation or not. Before considering what needs to be added, let’s look at what’s there at the outset. Home Handbook Buying / / MYBA MOA Clause by Clause 9 December 2022 Last revised minutes 11 Reading time Other standard forms are in use, but the poorly drafted and incomplete MYBA Memorandum of Agreement (MOA) remains the standard agreement for the sale and purchase of yachts, used by brokers large and small, whether a member of that organisation or not. Before considering what needs to be added, let’s look at what’s there at the outset. minutes 11 Reading time 9 December 2022 Last revised Other standard forms are in use, but the poorly drafted and incomplete MYBA Memorandum of Agreement (MOA) remains the standard agreement for the sale and purchase of yachts, used by brokers large and small, whether a member of that organisation or not. Before considering what needs to be added, let’s look at what’s there at the outset. The article focuses on the MYBA Memorandum of Agreement (MOA) November 2008 edition, which is the most commonly used contract in large yacht sales and purchases. The MOA should not be accepted at face value, and it is crucial to amend and supplement it before any transaction takes place. Clause 14 allows the seller to negotiate with other potential buyers as long as no commitments are made, even after signing the MOA. Clause 15 removes the statutory buyer protection provided by the Sale of Goods Act 1979 (as amended), and it is important to clarify the meaning of "warranty" in this context. The list of things that the vessel should be "free and clear of" in Clause 15 should be expanded to avoid ambiguity and potential disputes. Clause 16 highlights the importance of maintaining an inventory of the vessel's items, especially for larger vessels, and clarifies the consequences of rejecting the inventory. Clause 17 emphasizes the mandatory nature of making the vessel available for sea trials and surveys, and precautions should be taken to prevent conflicting charter arrangements. Clause 18 requires the seller to provide specific documents known as "Addendum One" that prove compliance with regulations and establish the vessel's value and validity of the sale. The list of things that the vessel should be "free and clear of" in Clause 15 should be expanded to avoid ambiguity and potential disputes. Clause 16 highlights the importance of maintaining an inventory of the vessel's items, especially for larger vessels, and clarifies the consequences of rejecting the inventory. Clause 17 emphasizes the mandatory nature of making the vessel available for sea trials and surveys, and precautions should be taken to prevent conflicting charter arrangements. Clause 18 requires the seller to provide specific documents known as "Addendum One" that prove compliance with regulations and establish the vessel's value and validity of the sale. The article focuses on the MYBA Memorandum of Agreement (MOA) November 2008 edition, which is the most commonly used contract in large yacht sales and purchases. The MOA should not be accepted at face value, and it is crucial to amend and supplement it before any transaction takes place. Clause 14 allows the seller to negotiate with other potential buyers as long as no commitments are made, even after signing the MOA. Clause 15 removes the statutory buyer protection provided by the Sale of Goods Act 1979 (as amended), and it is important to clarify the meaning of "warranty" in this context. This article considers the MYBA MOA, clause by clause. We’re looking at the November 2008 edition, because this is most commonly used. It’s available online. The February 2005 edition is still occasionally used and a 2021 electronic edition, featuring a few nips and tucks, has been published but is not yet in widespread use. The key takeaway is that, despite its official appearance, the MOA must not be accepted at face value, and no transaction should ever take place without the MOA being amended and supplemented. The MOA clauses themselves are in an illogical sequence, but are looked at in numerical order nevertheless. CLAUSES 1-13 The first two pages contain Clauses 1 to 13 in the form of boxes for the relevant details. A format commonly used in the commercial shipping sector. The attention to detail is immediately obvious: assuming “G.R.T.” is meant to mean Gross Register(ed) Tonnage, this is a term which was consigned to history long ago by the International Convention on Tonnage Measurement of Ships 1969. Clause 1 refers to "banking days" without reference to a specific location. And it may be wise to not to leave Clause 5 blank in the context of Clause 25 and Clause 38 : buyers may not want to pay a pay a deposit to the seller’s statutorily unregulated broker. CLAUSE 14 While this clause commits seller to the sale process, the seller isn’t prevented from negotiating with other would-be buyers – as long as no commitments are made with any such third party. Having signed the MOA, if the buyer comes under pressure from a broker to improve on the deal – as other would-be buyers are circling – this can be ignored. CLAUSE 15 While, in law, the term “warranty” has a specific meaning, it appears under this context – confusingly – that it simply means “represents”. This clause is important as the ordinary statutory buyer protection provided by the Sale of Goods Act 1979 (as amended) is normally removed by Clause 34 . Compared to the sale agreements for trading ships, the list of things which has to be “free and clear of” is a bit simplistic and limited – and should be expanded to include charters, mortgages, writs and port state and other administrative detentions rather than leave scope for argument over what “encumbrance” encompasses in the context of the MOA. The seller needs to ensure that anything of this kind is affecting the vessel: it’s not good enough to expect that the buyer will come across details of these in the public domain. Releasing the vessel from such encumbrance is a prerequisite to the sale completing as set out in Clause 30 . Where any such only comes to light after completion, the seller obliged to indemnify the buyer – which is of no use where the seller’s a company the only asset of which was the vessel just sold. Hence the need for a guarantee from a bank or the seller’s beneficial owner. Under Clause 15, the seller also represents that it(or he/she) is the legal registered owner of the vessel, with title to and the right to sell the vessel – and this will remain the case right up to the point of delivery to the buyer. This is the case anyway under section 12(1) of the Sale of Goods Act 1979 (as amended) in spite of Clause 34 which only excludes statutory protection “in relation to the VESSEL, fault or errors in her description or her quality or her fitness, for any particular purpose”. CLAUSE 16 The larger the vessel, the greater the inventory, and the longer it’s going to take to compile or update and check. This should be produced or updated as soon as the vessel is placed on the market, having regard to Clause 21 , as the buyer’s surveyor will need to check the items off against it as part of the pre-purchase survey. Once agreed on, the inventory forms part of the sale agreement. Clause 16 is silent as to consequences of rejection of the inventory by the buyer, but it seems likely that the agreement itself will be unaffected – and it’s still open for the buyer to reject under Clause 26 . Regarding significant works of art, sculptures, equipment, tenders and toys, it’s helpful to obtain a clear understanding of what’s staying on board (and, as importantly, what's not) before the MOA is signed. CLAUSE 17 While self-explanatory, this clause makes it clear that making the vessel available for a Clause 26 sea trial and Clause 27 survey is mandatory, not a nice-to-have, and the seller must take care that a charter broker does not arrange for a charter to take place which might prevent this. CLAUSE 18 While this clause simply sets out that the “Addendum One” documents must be provided by the seller, the MOA doesn’t come with Addendum One – or any addenda for that matter. The documents are so much more than mere paperwork: they are evidence that the vessel complies with certain regulations. Non-compliance may require major works to be carried out. Certain documents will be needed for re-registration and for proving title – without which the vessel may be worth less or even worthless. The sale itself could be invalidated where the correct corporate authorities and powers of attorney aren’t in place. And such documents may need to be authenticated in a particular way(s) in order to be accepted by the vessel’s new or existing flag state. CLAUSE 19 Unusually for the MOA, this clause is self-explanatory. Keep in mind that “berthing fees and crew’s wages” are implicitly not an exhaustive list. CLAUSE 20 This clause makes clear that where the seller fails to deliver the vessel (that is, in the legal sense of the word ‘deliver’) per Clause 21 or documentation per Clause 18 then all bets are off and the agreement is cancelled. However, as will be seen with regard to Clause 30 , all that’s needed with broad compliance with Addendum One - there’s no mention of the documentation needing to be authenticated as the buyer may require – or even to be effective at all. CLAUSE 21 The vessel must be delivered in the condition it was in at the time of the Clause 9 / Clause 26 sea trial and Clause 9 / Clause 27 condition survey, making this a sale of the vessel on an ‘as was’ basis – not ‘as-is’. ‘Delivery’ in this clause means the transfer of physical possession, rather than the vessel being moved. The vessel may have to be delivered elsewhere than at its usual mooring – usually for tax purposes – after which it’ll head straight back to its berth. While the financial consequences for the buyer of having the vessel delivered in the wrong place could lead to an unexpected Value Added Tax liability of up to 25% of the sale price, it seems that delivering elsewhere than that stated in Clause 11 will only entitle the buyer to claim damages. By contrast, the delivery date is a contractual condition breach of which allows the buyer to cancel the agreement: this is clear from the use of the phrase “time being of the essence” in Clause 12 . How this element of Clause 21 is affected by Clause 35 - which deals with force majeure events - isn't clear. By listing in Clause 21 various specific items which are to be included in the sale, those items not listed are, arguably, excluded. It would have been better simply to state “with everything belonging to the VESSEL on board and on shore” or some such – at least the scope for disagreement would have been reduced. CLAUSE 22 As risk of loss of, or damage to, the vessel passes under this clause immediately upon delivery, the buyer must make sure that suitable cover has been obtained well in advance. CLAUSE 23 This may seem like an obvious provision, but keep in mind that where the seller is a company which is in liquidation it may require authorisation to sell the yacht. CLAUSE 24 The companion to Clause 14 this clause commits the buyer to the sale process. The buyer may only exit from the deal - should the buyer have a change of heart - will be as the agreement allows. CLAUSE 25 While the “four banking days” clock only begins to tick once the agreement has been signed, as with Clause 1 , the term “banking days” isn’t defined in terms of any particular country’s banks. And that’s a problem as a failure to pay is breach of contract, allowing the seller to terminate and sue for damages – which could be an amount equivalent to the unpaid deposit. It’s not the case that the deposit needs to be paid for the agreement to come into effect. It’s also unclear whether the date of signature is included or excluded in the four-day period. Buyers must be aware of, and take into account, the time taken for identity checks and anti-money laundering to be carried out. CLAUSE 26 One of the many ways in which the drafting of the MOA leaves much to be desired is Clauses 26 and 27 – which between presuppose that the vessel is in the water at the outset. Of course, large yachts can be out of the water for months at a time. No sensible owner would normally place his or her pride and joy on the market while she’s on the hard: often parts of the interior will have been covered-up or removed while works are ongoing, but if the sale is urgent there may be no choice. Where the vessel is out of the water, the necessary amendments will have to be detailed. Assuming the vessel is in the water when the MOA is agreed, then the seller must make her available for a sea trial of up to four hours. This does not mean that the seller is obliged to make all necessary arrangements. It’s unclear, for example, who would be responsible for ordering pilots if required. While this clause fails to mention this, the buyer would be well advised to arrange for a surveyor to attend to examine certain aspects of the vessel’s performance which can’t be tested out of the water. How easily the main engine(s) and gensets start, and how much smoke is emitted at various engine temperatures, for example, typically can’t be tested as the engine’s heat exchangers require the vessel to be in the water, and the engines should be tested under load. Following the sea trial, the buyer may then elect not to go ahead with the purchase – although it’s not clear whether the grounds for this are for any reason (i.e. the saloon cushions are the wrong colour or a similar trivial reason) or whether the reason must relate to the performance of the vessel during the sea trial. To be effective, the buyer must ensure that the rejection is: In writing; To the seller or broker; Within 24 hours of the sea trial; and Submitted as a formal notice in compliance with Clause 43 . CLAUSE 27 It should not be underestimated how difficult it can be to find at short notice a suitably qualified surveyor, appropriately insured, with availability, who the buyer can be reasonably confident will be thorough and independent. It may not be advisable to go along with the seller’s broker’s suggestion. Yard space and facilities may also be a premium – especially out of season. It is also usually be advisable for samples to taken of the engine’s lubricating oil for laboratory analysis. Elemental spectroscopy of the oil can reveal premature engine wear, while the presence of water might indicate a gasket or heat exchanger seal failure. Combined with testing for acidity a picture can be built of the seller’s crew’s approach to equipment maintenance. Differences in results for two identical engines can be an obvious cause for concern. It’s crucial to consider timescales for surveying and testing before dates are set in stone in the MOA. The object of the survey is only to discover defects which haven’t already been disclosed to the buyer in writing – although the buyer may wish to ascertain the nature and extent of disclosed defects. It’s not clear when the nature and extent of such defects is such that it could be considered that these defects haven’t actually been disclosed. While a “defect” is determined in Clause 27 to be a defect which “affect(s) the operational integrity of the VESSEL or her machinery or her systems or renders the VESSEL unseaworthy”. There’s no definition of “operational integrity” either in the MOA or in the law generally. Unseaworthiness is also not defined in the MOA. Broadly, as a matter of law, a vessel is unseaworthy when she is not reasonably fit in all respects to encounter the ordinary perils of the seas – but this still leaves plenty of scope for factual and legal argument. Where such an undisclosed defect is found by the surveyor, the buyer must choose one of the option given in (a) paragraph (a), bearing in mind that such notice must be given: In writing; To the seller or broker; Within seven days of the completion of the survey; and In conformity with Clause 43 . If the buyer elects for the seller to carry out remedial works, then it would be wise to set a realistic date for the completion of these, rather than just rely on the “without undue delay” provision. CLAUSE 28 This clause makes clear that the notice provisions in Clause 26 and Clause 27 must be complied with to the letter – failing which the vessel will have been accepted. CLAUSE 29 While it is hard to imagine circumstances where the vessel is damaged as a result of the captain complying with a request from the buyer during a sea trial, given the captains duty of care to the seller, it is conceivable that the buyer’s surveyor causes damage. This underlines the importance of checking that the surveyor carries suitable insurance. CLAUSE 30 Completion (more often known as ‘closing’) is the final stage of the sale and purchase process, during which payment of the balance is made, and the vessel and documents are delivered to the buyer. Subject to any Clause 27 notice or Clause 35 force majeure event, the Clause 12 completion date is the date on which the buyer must pay the balance. There is no mention of this also being the date upon which the seller must receive the funds, but it’s clearly in everyone’s interests for payment to be made as quickly as possible. The currency, bank details and payment method should be agreed in Addendum One and expressly made conditions of the agreement to be strictly adhered with. Payment is required as soon as the Addendum One documents have been tendered to the buyer – seemingly even if they are defective in terms of their effectiveness or authentication, as long as they comply with their descriptions set out in Addendum One. CLAUSE 31 This clause elaborates on Clause 25 . It’s odd that these two clauses aren’t drafted as a single clause for greater clarity. CLAUSE 32 This clause elaborates on Clause 23 . Again, it’s odd that these two clauses aren’t also drafted as a single clause for greater clarity. CLAUSE 33 While it used to be considered bad luck to change the name of a yacht, the MOA copies the now standard practice in the shipping industry to change name upon change of ownership. It’s as good to be aware of this clause, given that it is the default position. Given the amount of equipment on board bearing the yacht’s name, logo or monogram, the expense of compliance isn’t to be underestimated. An oil tanker’s name can be changed with a paintbrush: a modern yacht will almost certainly have a custom-made, illuminated name which must be installed and the immediate surrounding area filled and repainted as required. The standard seven days may be no way near long enough. That said, the seller is going to face an uphill task in proving what losses may have followed from any delay in remaining. CLAUSE 34 In the normal course of events, sections 13, 14 and 15A of the Sale of Goods Act 1979 (as amended) will apply to the sale and purchase of the vessel. Under these sections, goods sold must corresponded with the seller’s description of them, they must be of satisfactory quality, fit for purpose, etc. But parties are free, subject to certain statutory limitations, to agree to exclude such provisions. And this is what Clause 34 aims to do. It succeeds in this aim, albeit in respect of corporate buyers : individual buyers are ‘consumers’ meaning that these sections cannot be excluded. This clause does not affect the seller’s Clause 15 warranty. CLAUSE 35 This clause sets out what the parties are to do where certain external events beyond their control delay the sea trial, survey or closing. As the law aims to ensure that the parties carry through with the deal, force majeure clauses are interpreted restrictively and against the party seeking to rely on them. And even then, that party must then prove that it used reasonable endeavours to minimise the delay. CLAUSE 36 This is a standard so-called boilerplate clause, which are normally placed after all the commercial terms. But MYBA, it seems, likes to do things differently. CLAUSE 37 Though detailed, Clause 37 is self-explanatory and requires no further explanation. CLAUSE 38 While Clause 5 presupposes that the stakeholder will be a broker, the seller should think long and hard about whether it’s wise to place money at the disposal of a statutorily unregulated party which is acting for the buyer. It is increasingly common for funds to be placed with the buyer’s lawyer – which also alleviates the broker from the increasing bureaucracy associated with satisfying anti-money laundering rules. Even then, the choice of lawyer is important. CLAUSE 39 This otherwise self-explanatory clause only applies where the parties agree that the bottom should be painted with antifouling and anodes replaced. Notably, it makes no mention of more modern and environmentally-friendly antifouling wraps. Where there is significant fouling but the sacrificial anodes do not require replacing, there could be a cathodic grounding fault which the surveyor should investigate. The anodes are implicitly those on the hull, shafts and rudders – rather than those within the raw-water side of the engines’ cooling systems. CLAUSE 40 Arbitration is a way of setline disputes in private, which is no less effective than going through the public courts potentially in the media spotlight. Missing from the MOA is a specific reference to the arbitration being conducted in accordance with the London Maritime Arbitrators Association (LMAA) terms – which allow for different levels of procedural complexity according to the amount in issue. CLAUSE 41–44 These are standard boilerplate clauses, but the reference to the “telefax” is now obviously very outdated and needs amending. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Corporate Ownership Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Corporate Ownership

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Superyacht owners have a collective worth greater than the annual GDP of Sweden. They are influencers in the truest sense. And now you can reach out to them and their gatekeepers through a platform which is independent and respected. Home About Advertise / / A Wealth of Opportunity The global fleet over 30 metres in length consisted of 5,396 superyachts in operation at the start of 2022 ... The total average final asking price for all used yachts sold, went up in 2021 to €11.8 million. The State of Yachting 2022 REACH THE GLOBAL ELITE Get In Touch Our Members are, by definition, some of the wealthiest people in the world. Working on the widely-accepted Ten Percent Rule, large yacht owners are together worth €637bn.* Which is slightly more than the annual GDP of, say, Sweden.* They are influencers in the truest sense. And now you can reach out to them and their gatekeepers through a platform which is independent and respected. *Sources: SuperYacht Times, The State of Yachting 2022, €(11.8m average value x 10 x 5,396 units), International Monetary Fund World Economic Outlook Database, April 2024 No Conflicts of Interest Contact Us Transparency and impartiality being central to the Club’s ethos and success, we will welcome advertising and sponsorship in this, our new website. We are not, however, a yachting media outlet and do not rely on advertising revenue. There are plenty of such platforms, and they do a great job. But we’re exclusively on the side of owners. In order to avoid any conflicts of interest, we cannot carry advertising in respect of yachts, or yachting products or services. If you’d like to explore promoting your non-marine business, please get in touch.

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Life’s short: build a yacht. Seems simple enough. For some, only new will do. But building a large yacht is a complicated process, the result of which is a complex series of systems, which need to work reliably, and in harmony. With the right guidance, the process is an exciting and satisfying journey. If you’re not already a Member, your first step's to contact us so we can help you find the right people. Home Handbook Building / / Build Your Team 10 May 2023 Last revised minutes 4 Reading time Life’s short: build a yacht. Seems simple enough. For some, only new will do. But building a large yacht is a complicated process, the result of which is a complex series of systems, which need to work reliably, and in harmony. With the right guidance, the process is an exciting and satisfying journey. If you’re not already a Member, your first step's to contact us so we can help you find the right people. minutes 4 Reading time 10 May 2023 Last revised Life’s short: build a yacht. Seems simple enough. For some, only new will do. But building a large yacht is a complicated process, the result of which is a complex series of systems, which need to work reliably, and in harmony. With the right guidance, the process is an exciting and satisfying journey. If you’re not already a Member, your first step's to contact us so we can help you find the right people. Exceptional projects require exceptional teams, and building a good working relationship with all team members from the start is essential. Small projects allow individuals to combine roles, especially in design. Trusted brokers with industry knowledge add value and may help in maintaining resale value. Exterior and interior designers, naval architects, and project managers are essential team members. Project managers coordinate efforts and seek compromises: some seagoing experience is helpful. Yachts are typically owned through companies for liability and privacy reasons. Cost savings can be achieved through proven hull designs and repurposing existing designs. Clear definitions of team roles, strict timescales, and engaging a lawyer with build experience are important. Project managers coordinate efforts and seek compromises: some seagoing experience is helpful. Yachts are typically owned through companies for liability and privacy reasons. Cost savings can be achieved through proven hull designs and repurposing existing designs. Clear definitions of team roles, strict timescales, and engaging a lawyer with build experience are important. Exceptional projects require exceptional teams, and building a good working relationship with all team members from the start is essential. Small projects allow individuals to combine roles, especially in design. Trusted brokers with industry knowledge add value and may help in maintaining resale value. Exterior and interior designers, naval architects, and project managers are essential team members. As with the counterparts building trading and passenger vessels, yacht builders tend to be conservative in their outlook. Why change what’s worked before? They’re also in business to make money and will look to save costs where they can – in particular by interpreting poorly-drafted build agreements to suit themselves. To a certain extent, builders’ yards are, in reality, pieces of waterside real estate where a multitude of suppliers and subcontractors come together to create the finished article. So putting the right team in place is a vital first step, whose members will advise, negotiate and integrate the efforts and wares of countless third parties. And the more exceptional the project, the more exceptional your team needs to be. All the participants need to be involved right from the start and an excellent working relationship must be built up and maintained. The smaller the project, the greater the scope for individuals to combine roles, especially when it comes to the vessel’s design. KEY TEAM MEMBERS Having decided on how and where they wish to use their yacht, a trusted broker is the best starting point for some Members. Trusted is the key word here. Brokers usually work on commission. Are they looking to build a relationship which could last many happy years, or are they just looking to complete the next deal? Good brokers will have excellent industry knowledge and will add real value. They are sounding boards for ideas, and arbiters of practicality and good taste: the latter two elements being essential in maintaining resale value. The next team members to have on board are the exterior and interior designers, plus a naval architect where a custom yacht is envisaged, and a project manager. Designers produce designs, not technical solutions. Even the most accomplished designers won’t know exactly how workable their designs are, and architects don’t always have an eye for design. So a project manager will also be needed to coordinate all their efforts, and – diplomatically – seek compromises here and there. The project manager should have recent seagoing experience, as captain or engineer, on a vessel of similar type and size. Everyone in the team – you included – need honest feedback on what is and isn’t going to work. Because yachts are sources of liability as well as being assets, and to provide privacy and make accounting easier, yachts are nearly always owned through companies. Trusts can provide an additional layer of secrecy, but keep in mind that obtaining justice can be challenging in some far-flung jurisdictions should your expectations not be met. DON’T ECONOMISE Costs can be kept down by using a proven hull design. Many builders offer semi-custom yachts, where you’ll be making mostly aesthetic choices. If you want to stand out from the crowd, commercial and even military designs can be repurposed to make striking yachts. You need to be clear on who owns the intellectual property and that you have the right to use such designs. Some team roles can be taken on by the same individual or company. Exterior and interior design can be carried out by the same person – arguably leading to more harmonious aesthetics. But trying to save costs by omitting any of the core technical skills sets can have significant adverse effects. Oversights at this first stage can require expensive modifications later, causing lengthy delays. Everyone’s remit must be clearly defined and dovetailed, with strict timescales baked-in to their service contracts. Engaging a good lawyer, with build experience, is crucial here. DESIGN ESSENTIALS A yacht’s design will be determined, in part, by the minimum technical standards dictated by the Flag State , which in turn may require your yacht to be built in compliance with classification society Rules. These are based on internationally agreed-to standards, which must be adhered to if your yacht is going to ever to sail anywhere, and without which you will find it near impossible to insure the vessel. They vary according to length, internal volume and use. But such standards do not generally cover some aspects, such as preventive maintenance, which, over time, will help support the vessel’s condition and resale value. Remove the panels of any yacht and you’ll see an array of pipes, wires and items of equipment. If it’s too difficult or time-consuming to reach such items, they can be overlooked and, eventually, fail. The result is not just you and your guests being inconvenienced. Some repairs can be disproportionately expensive, and in extreme cases this can lead to your yacht not being accepted by a buyer when it’s time to sell. With regards aesthetics, most buyers are reasonably conservative. Avant garde designs are going to look newer for longer, and this will help to maintain their value. But when futuristic tips into plain weird the resale market shrinks rapidly and cost of ownership skyrockets. THE END RESULT Playwright George Bernard Shaw once quipped that reasonable people adapt themselves to the world, while unreasonable people adapt the world to themselves – hence progress depends on unreasonable people. Challenging the innate conservativeness of builders and regulatory authorities requires an experienced, imaginative and practical team. In the case of a full custom yacht, the end result of this exciting pre-build stage should be a design and specification you’re happy with, which is ready to be put out to tender with shortlisted builders, and a team ready to oversee the build. If a semi-custom or series production yacht is your preference, the result is a team which understands your vision and is ready to review, negotiate and modify the builders’ pre-existing designs and specifications. With your team in place, it's time to chose a Flag State , and possibly a classification society , before engaging a builder . Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Choose a Flag Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Choose a Flag

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The first question your naval architect is likely to ask is where your yacht will be registered. That registry’s regulations will do much to determine the design of your yacht. But, beyond that, the registry provides the legal framework for crew employment, and may determine how easily insurance and finance can be obtained. So research this in-depth rather than accepting your architect’s suggestion. Home Handbook Building / / Choose A Flag 10 May 2023 Last revised minutes 4 Reading time The first question your naval architect is likely to ask is where your yacht will be registered. That registry’s regulations will do much to determine the design of your yacht. But, beyond that, the registry provides the legal framework for crew employment, and may determine how easily insurance and finance can be obtained. So research this in-depth rather than accepting your architect’s suggestion. minutes 4 Reading time 10 May 2023 Last revised The first question your naval architect is likely to ask is where your yacht will be registered. That registry’s regulations will do much to determine the design of your yacht. But, beyond that, the registry provides the legal framework for crew employment, and may determine how easily insurance and finance can be obtained. So research this in-depth rather than accepting your architect’s suggestion. Registering a yacht in a country's ship registry determines its nationality, owner's responsibilities, and compliance with laws and regulations. The choice of registry impacts insurance availability, financing options, chartering regulations, taxation requirements, scrutiny from port officials, and service provided. Unusual flags may reduce insurance options and increase premiums. Lenders require high maintenance and safety standards and confidence in the country's rule of law for financing agreements. Chartering requires compliance with international regulations, and certain registries have simplified safety codes for cost-effective compliance. Cabotage rules may require local registration for commercial operations in specific jurisdictions. Temporary Admission allows tax avoidance in the EU for non-commercial use, but specific advice is necessary. Scrutiny by port officials can cause delays and inspections may be prioritized based on flag categorization. Helpful registries with easily accessible regulations and guidance are preferred. Local agents and service providers can assist with overcoming time zone difficulties, but may come with additional costs and risks. Cabotage rules may require local registration for commercial operations in specific jurisdictions. Temporary Admission allows tax avoidance in the EU for non-commercial use, but specific advice is necessary. Scrutiny by port officials can cause delays and inspections may be prioritized based on flag categorization. Helpful registries with easily accessible regulations and guidance are preferred. Local agents and service providers can assist with overcoming time zone difficulties, but may come with additional costs and risks. Registering a yacht in a country's ship registry determines its nationality, owner's responsibilities, and compliance with laws and regulations. The choice of registry impacts insurance availability, financing options, chartering regulations, taxation requirements, scrutiny from port officials, and service provided. Unusual flags may reduce insurance options and increase premiums. Lenders require high maintenance and safety standards and confidence in the country's rule of law for financing agreements. Chartering requires compliance with international regulations, and certain registries have simplified safety codes for cost-effective compliance. With some limited exceptions, all yachts have to be registered in a country’s ship registry, and fly that nation’s maritime flag, known as an ensign. That registry is often know as the Flag State, especially to distinguish it from the Port State – the latter being the country where a yacht is located when not in international waters. Registration is about much more than just choosing a flag to wear on the stern: it’s what gives a yacht nationality and frames owner’s, manager’s and crewmembers’ responsibilities. The choice of registry affects the laws and regulations the owner must adhere to, the ready availability of insurance and finance, whether certain taxes must be paid and the attention port officials may pay the vessel. Registration can also prove ownership and is a requirement for international cruising. Notably, there are registries entry into which proves nothing in terms of title. Examples of these include Delaware and the United Kingdom Part III Small Ships Register. Fees and expenses for registration are relatively small, but choosing the wrong registry can be a very costly error. Making that selection is a complicated process requiring independent, expert advice. A trap for the unwary is the recommendation of a certain flag with which a naval architect, project manager or other adviser happens to be familiar – without due consideration of all the owner’s particular circumstances and wishes. SIX FLAGGING FACTORS While the registries themselves are state agencies, many popular ones are managed on a commercial basis and – to an extent – compete with each other. This is a good thing since levels of service must be raised above that which one might otherwise expect from the government departments of certain countries. However, there can also be an incentive to be overly flexible when it comes to the drafting and enforcement of safety regulations. To an extent, flag choice can come down to a process of elimination. Emotions can be a factor but it’s best to let head rule heart. Here are the six main factors you should consider: Insurance Finance Chartering Taxation Scrutiny Service INSURANCE All yachts should be insured and third party cover is normally mandatory. Underwriters will want to understand the risk they’re agreeing to cover, and key to this will be the flag. An unusual flag will not make insurance impossible to find, but it will reduce the number of underwriters with an appetite to write such business thereby pushing up premiums. FINANCE Some yachts are financed, by means of a lease or loan , as a means to free-up investment capital for owners’ businesses. As with insurers, lenders will be taking a financial and legal interest in the vessel, and will want to make sure that the owner abides by high maintenance and safety standards. Lenders will also need to have confidence in the rule of law in the country of registration itself, since the mortgages will be entered in the registry. CHARTERING For the protection of paying guests, chartering requires adherence to a wide range of international regulations. Fortunately, certain registries have created safety codes to simplify compliance which reduces cost and administration. Certification by a classification society is normally required above a certain size, although this size varies. Some owners may regard classification as expensive and unnecessary (and it may not be possible for some vessels not originally built to class rules) while others choose this route for peace of mind regardless of charter activity. Chartering isn’t possible at all with some flags when the vessel is over a certain size, for example Jersey and Guernsey. The existence of any cabotage rules should also be considered. These are protectionist measures requiring vessels operating commercially to be registered locally if not engaged in international voyages. The best example of this is the United States. If the plan was to charter in US waters there would no other real choice but to fly the Stars and Stripes. TAXATION If not being used commercially, it is possible – where the beneficial owner is not tax resident in or connected with the European Union – to avoid the payment of Value Added Tax and customs in the EU on the yacht itself, for up to 18 months, through Temporary Admission. However, this requires registration outside the EU amongst other conditions. It also requires detailed, specific advice to ensure that the correct information is given and at the right time. VAT can be up to 25% and charged on the hull value. Port officials may detain a vessel pending payment (and any fines and/or interest). SCRUTINY Any yacht can be boarded, at any time, by a port official whose job it is to make sure that all the paperwork is in order – which can be invasive and can cause unexpected delays. As their time and resources are limited, inspections are often prioritised according to flag. The Paris Memorandum of Understanding, for example, is a group of 27 European and North Atlantic nations which inspect safety, security and environmental standards of more than 18,000 vessels each year. Other similar such groups exist worldwide. Information is shared between members, and flags categorised into White, Grey and Black lists. White List categorisation should mean fewer inspections but does not lead to immunity altogether. SERVICE If a registry isn’t helpful and doesn’t make its regulations and guidance easily available, in a language which managers, captains and crew can understand, then as a matter of common sense it can be ruled-out. Local agents and corporate service providers can be used to overcome time zone difficulties, but at a cost and with the risk of misunderstandings and further delays. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Keep it Classy Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Keep it Classy

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The loan finance business model is as simple as it sounds: the owner borrows part of the purchase price from a bank or other lender, and is the legal, registered owner of the yacht. The lender takes security over the yacht. While most yacht loan agreements and associated documentation is complex, most of this relates to the lender’s security. Home Handbook Financing / / Loans Overview 21 July 2015 Last revised minutes 2 Reading time The loan finance business model is as simple as it sounds: the owner borrows part of the purchase price from a bank or other lender, and is the legal, registered owner of the yacht. The lender takes security over the yacht. While most yacht loan agreements and associated documentation is complex, most of this relates to the lender’s security. minutes 2 Reading time 21 July 2015 Last revised The loan finance business model is as simple as it sounds: the owner borrows part of the purchase price from a bank or other lender, and is the legal, registered owner of the yacht. The lender takes security over the yacht. While most yacht loan agreements and associated documentation is complex, most of this relates to the lender’s security. Lenders typically use their own documentation, which may lack clarity and organization. The loan agreement outlines the availability of funds and conditions for repayment. Security provisions are crucial and can be detailed in the loan agreement and additional documents. Covenants in the loan agreement specify borrower obligations and restrictions, such as the sale and navigation of the yacht. Assignments of rights under insurance policies and charter earnings may be required. The mortgage on the yacht is registered as part of the loan agreement. Guarantees from third-party companies and beneficial owners provide additional security. Covenants and restrictions aim to ensure proper management, operational compliance, and insurance coverage. Choosing English law and jurisdiction is common in the ship finance sector due to expertise and favorable legal conditions. Opting for English law can save costs and promote amicable relationships among parties involved. The mortgage on the yacht is registered as part of the loan agreement. Guarantees from third-party companies and beneficial owners provide additional security. Covenants and restrictions aim to ensure proper management, operational compliance, and insurance coverage. Choosing English law and jurisdiction is common in the ship finance sector due to expertise and favorable legal conditions. Opting for English law can save costs and promote amicable relationships among parties involved. Lenders typically use their own documentation, which may lack clarity and organization. The loan agreement outlines the availability of funds and conditions for repayment. Security provisions are crucial and can be detailed in the loan agreement and additional documents. Covenants in the loan agreement specify borrower obligations and restrictions, such as the sale and navigation of the yacht. Assignments of rights under insurance policies and charter earnings may be required. Lenders will usually have their own ready-made documentation. While reasonably uniform in scope and contents, the taxonomy and readability usually leave much to be desired. Within the loan agreement, the loan clause sets out that the loan will be available, either in one lump sum where the yacht has already been built, or at certain newbuild milestones. Given that the lender’s not the owner, the security, detailed in the agreement, is comprehensive. Default events are set out in the loan agreement, to make clear the circumstances which will trigger the lender’s right to demand immediate repayment of the loan and what happens in the event such payment is not forthcoming. Finally, various standard boilerplate clauses in the loan agreement deal with key housekeeping matters, with the most important being the law and jurisdiction clause: parties must make sure they are taking advice from an experienced, insured lawyer duly qualified in the correct jurisdiction. SECURITY Security provisions make up most of the loan documentation, and can be set out both in the loan agreement and further documents: A covenants clause within the loan agreement, and/or a separate deed of covenant Assignments to the lender of the borrower’s rights under yacht’s insurance policies An assignment of the yacht’s charter earnings to the lender The mortgage on the yacht, registered pursuant to the loan agreement A guarantee from a third party company owned by the yacht’s beneficial owner A guarantee from the beneficial owner him or herself Covenants set out positive and negative promises on the part of the borrower. There is usually a restriction on the sale of the yacht, and restrictions the geographical navigation and use of the yacht – for example, the yacht may not be allowed to visit places where enforcement of loan could prove challenging. Chartering and operational management often may only be undertake on approved terms. Where management is deficient, insurance cover could be withdrawn and the lender’s security unnecessarily jeopardised. A more detailed analysis of the security requirements is set out here . LAW & JURISDICTION As, for historical reasons, the centre of the world’s ship finance sector is London, it makes sense to ensure that all the contractual relationships are governed by English law and subject to English jurisdiction. Although it is not easy to think of yachts as being ships, that is exactly what they are in the eyes of the law. A greater concentration of yachting lawyers and case-law, coupled with an innovative banking culture and a legal regime which encourages settlement, means that this choice may well save legal costs and maintain good relations among the parties. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Loan Security Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Loan Security

Unavailable at present Latest Position Yachts & More Listing Email WhatsApp +44 7773 246 246 Central Agent 32 m Length Thompson Yachts Builder 2018 Build year 347 Gross tonnage United Kingdom Registry Particulars Token

Compliance with the more obscure flag state regulations and local laws can sometimes seem like unnecessary hassle and expense. Yet if you, as a yacht owner, are to remain protected in the event of an accident, investing in detailed compliance may be money well spent. You also need to keep lines of communication with your insurance broker open. Home Handbook Insuring / / Staying Covered 10 May 2023 Last revised minutes 6 Reading time Compliance with the more obscure flag state regulations and local laws can sometimes seem like unnecessary hassle and expense. Yet if you, as owner, are to remain protected in the event of an accident, investing in detailed compliance may be money well spent. You also need to keep lines of communication with your insurance broker open. minutes 6 Reading time 10 May 2023 Last revised Compliance with the more obscure flag state regulations and local laws can sometimes seem like unnecessary hassle and expense. Yet if you, as owner, are to remain protected in the event of an accident, investing in detailed compliance may be money well spent. You also need to keep lines of communication with your insurance broker open. Warranties are requirements that must be fulfilled by the policyholder to manage risk in insurance situations. Breach of warranty no longer automatically avoids all liability for underwriters since 2016. Underwriters remain liable for losses occurring after a breach of warranty if it can be remedied. If a loss occurs while the insured is in breach of warranty and the breach increases the risk, underwriters can deny liability. Breach of warranty regarding past facts may permanently suspend the underwriter's liability. Identifying warranties in a policy is crucial as they can be expressed or implied by law. Popular policy forms include warranties related to the purpose of use, navigation limits, vessel control, etc. The warranty of legality is an important implied warranty that covers lawful adventures and lawful usage of the yacht. Seaworthiness may not be explicitly required in policies, but it can impact coverage and claims. Sensible precautions, such as using approved charter agreements and verifying crew qualifications, are recommended to ensure coverage and compliance with laws and regulations. Identifying warranties in a policy is crucial as they can be expressed or implied by law. Popular policy forms include warranties related to the purpose of use, navigation limits, vessel control, etc. The warranty of legality is an important implied warranty that covers lawful adventures and lawful usage of the yacht. Seaworthiness may not be explicitly required in policies, but it can impact coverage and claims. Sensible precautions, such as using approved charter agreements and verifying crew qualifications, are recommended to ensure coverage and compliance with laws and regulations. Warranties are requirements that must be fulfilled by the policyholder to manage risk in insurance situations. Breach of warranty no longer automatically avoids all liability for underwriters since 2016. Underwriters remain liable for losses occurring after a breach of warranty if it can be remedied. If a loss occurs while the insured is in breach of warranty and the breach increases the risk, underwriters can deny liability. Breach of warranty regarding past facts may permanently suspend the underwriter's liability. Warranties serve to manage risk in various situations. They are requirements that need to be fulfilled by the policyholder. Warranties can be promissory, where the policyholder commits to a specific action or condition, or they can affirm or deny the existence of certain facts. Simply labelling a term as a warranty is insufficient, and the courts will consider the parties' intentions as well. They can be set out in the policy, or are implied by law – for example that the yacht will be used for lawful purposes, and operated in a lawful manner. BREACHES OF WARRANTY Since 2016, the old ‘basis of the contract’ clauses have been abolished. This means that underwriters cannot automatically avoid all liability if an express warranty is breached. The underwriter is liable for losses that occurred before a breach of warranty – as was always the case. But now, if the breach can be remedied, the underwriter remains liable for losses that happen after the breach has been fixed. If a loss occurs while the insured is in breach of a warranty, and if (crucially) the breach actually increased the risk of the actual loss, underwriters can still deny liability. Once (if) the insured rectifies the breach before the loss happens, the insured will again be back on-cover. After a breach of a warranty, the insured is still responsible for paying the premium. However, underwriters may be cautious when demanding payment to avoid waiving their right to rely on the breach. If the breach cannot be rectified, such as a breach of warranty regarding past facts (e.g., previous insurance claims or losses), the liability of the underwriter remains permanently suspended, and the insured will not have had any cover. RECOGNISING WARRANTIES So, with such serious consequences flowing from a breach of warranty, it is vital to be able to identify what warranties apply to a policy. The trouble is that warranties can be expressed in the contract, but not actually described as a warranty. More worryingly, they can be implied automatically by law, without even having to be agreed upon. Thankfully, express warranties must at least be included in the policy, or must at least be contained in some document referred to in the policy. So in the event of a claim it wouldn’t be good enough for an underwriter to simply dust-off some previously unknown ‘standard’ terms and refuse to pay. They are normally added as a deliberate and obvious fundamental stipulation of the contract. While implied warranties cannot be found in policies, they are easy to ascertain from the UK’s Marine Insurance Act 1906, and we’ll consider the more important ones below. While it may seem narrow-minded just to look at English law, it’s worth considering that most of the world’s risks are insured on the London market, and most countries model their own insurance laws on this Act – sometimes word for word. Whereas express warranties tend to be specific, implied warranties can be overarching and vague; so there can be overlaps between them. But an express warranty will not exclude an implied warranty on a related matter, unless directly inconsistent with it. EXPRESS WARRANTIES The two most widely used policy forms, the Institute Yacht Clauses and the American Yacht Form, contain warranties that the yacht is only to be used for ‘private pleasure purposes’ and is not to be chartered unless the underwriters specifically agree. The Institute Yacht Clauses also frame agreed navigation limits and the vessel’s maximum speed as warranties. Other popular forms often demand that when the yacht is underway a competent person must be on board and in control of the vessel. In a 2006 English case, concerning a claim following a serious fire on board the motor yacht Newfoundland Explorer while she was laid up afloat in Fort Lauderdale, the court held that the phrase ‘warranted vessel fully crewed at all times’ meant that the owner had to keep at least one crew member on board the yacht 24 hours a day, subject to (i) emergencies rendering crew departure necessary, or (ii) necessary temporary departures for the purposes of performing crewing duties or related activities such as adjusting mooring lines. It wasn’t good enough to employ a captain who lived ashore 30 minutes away. History was repeated in 2008 with a fire on board another vessel, Resolute, whose crew lived nearby – and the court in that case came to the same conclusion. WARRANTY OF LEGALITY Arguably the most important warranty is not expressed, but implied. Under the UK’s Marine Insurance Act 1906 (and in the laws of many other nations) there is an implied warranty that: The ‘adventure’ (i.e. a charter or a period of use by the owner and/or crew) will be lawful; and The yacht will be used in a lawful manner – as far as the insured can control the matter. With regard to legality of the adventure, at one end of the spectrum a yacht will clearly not be covered where the owner uses it for smuggling. Problems arise where the owner has no knowledge of doing anything illegal. Illegality may stem from local law as well as the yacht’s flag state law: a yacht chartering in without a local charter licence may not be covered. One would also want to ensure that the complex US security regulations are complied with when entering their waters. As for the second part – using the yacht in a lawful manner – this is only an issue as far the owner can control it. Compliance with safety-related regulations, such as the International Safety Management (ISM) Code or the Red Ensign Group Yacht Code Large Yacht will be a prerequisite to the underwriter paying related claims. So important is the warranty of legality that breaches of it cannot be waived by a kind underwriter, neither can the parties agree to overlook it. The warranty of legality has been used to avoid payment even where the crew failed to keep a proper watch – as this was in itself a breach of international collision regulations. In one landmark case, a yard was also denied cover where fire destroyed yachts in the yard, but where the yard itself did not conform to municipal byelaws. SEAWORTHINESS As surprising as it may seem, where a policy is for a period of time (as nearly all are) rather than for a specific passage, there is no implicit requirement in law for your yacht to be maintained in a seaworthy state. While some policies overcome this by expressly obliging the owner to maintain the yacht in a seaworthy condition, some standard forms don’t. Where there’s no stated obligation to do so, the underwriter will not be liable for any losses arising from unseaworthiness if the yacht actually puts to sea in that state with the knowledge of the insured. Where, as is normally the case, the legal owner (and therefore the named insured) is an offshore company, perhaps held in trust, identifying the individual(s) with such knowledge is difficult. The managers are an obvious starting point. Whilst it is for the underwriters to prove such knowledge, not for the insured to disprove, a review of the documents and correspondence held by the ISM Code ‘designated person’ could prove fatal to the chances of a pay-out. Being in a seaworthy condition means just that: falling short, but nevertheless making every effort, will not do. Even if a policy does not insist on seaworthiness, this is likely to be examined by the underwriter in any event after a claim, as any material non-disclosure would still provide a separate route for invalidating the claim. Many flag states, in particular within the Red Ensign group, have technical Codes of Practice that apply specifically to large yachts and those which are chartered. These provide objective measures of unseaworthiness, but, whilst helpful, should not be considered as providing a complete description of what constitutes a seaworthy yacht. SENSIBLE PRECAUTIONS If you’re chartering your yacht out, underwriters may insist on the use of a charter agreement that has been specifically approved by them, or is in a standard industry format, such as that published by MYBA . Likewise, if you’re going to race your sailing yacht, you may net to provide advance notification. However you use your yacht, be sure to get written confirmation of the ongoing information needed by underwriters – and provide this clearly, verifiable and in good time. It's also vital to check that your yacht is operating in accordance with flag and port state laws, and that you have the paperwork to provide this. Check, also, that your crew have the qualifications they claim they have: there are various third parties which provide this standalone service. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Making a Claim Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Making a Claim

Yacht brokers play an essential role in the sale and purchase market. Reputable brokers know the current market, how to market the vessel, how much for and to whom. While they can also be engaged to represent buyers, this article looks at their role as the seller’s representative. Home Handbook Buying / / The Brokers' Role 2 September 2020 Last revised minutes 5 Reading time Yacht brokers play an essential role in the sale and purchase market. Reputable brokers know the current market, how to market the vessel, how much for and to whom. While they can also be engaged to represent buyers, this article looks at their role as the seller’s representative. minutes 5 Reading time 2 September 2020 Last revised Yacht brokers play an essential role in the sale and purchase market. Reputable brokers know the current market, how to market the vessel, how much for and to whom. While they can also be engaged to represent buyers, this article looks at their role as the seller’s representative. Yacht brokers are generally unregulated in most parts of the world, allowing anyone to become a broker without barriers to entry. Due diligence is essential for prospective yacht buyers to assess the credibility and ethics of brokerages and individual brokers. Brokers often prefer to work under a Central Agency Agreement, granting them exclusive rights to market the yacht and ensuring a return on their investment. It is important for buyers to verify if the broker they are dealing with is the Central Agent to avoid complex communication chains. The exclusivity term in the Central Agency Agreement can be negotiated, but sufficient time should be given to the broker for marketing and selling the vessel. Even if a sale is not directly related to the broker's efforts, they may still be entitled to a commission during the agreement period. Joint Central Agency Agreements may involve multiple agents deciding on marketing and commission splits, requiring careful consideration. Disputes between sellers and brokers often arise due to vague or ambiguous broker instructions. Standard terms and conditions provided by brokers should be examined carefully to understand the scope of services and any limitations or exclusions. Yacht brokers have fiduciary duties to act in the best interest of their principals, exercise reasonable care and skill, and avoid conflicts of interest. Even if a sale is not directly related to the broker's efforts, they may still be entitled to a commission during the agreement period. Joint Central Agency Agreements may involve multiple agents deciding on marketing and commission splits, requiring careful consideration. Disputes between sellers and brokers often arise due to vague or ambiguous broker instructions. Standard terms and conditions provided by brokers should be examined carefully to understand the scope of services and any limitations or exclusions. Yacht brokers have fiduciary duties to act in the best interest of their principals, exercise reasonable care and skill, and avoid conflicts of interest. Yacht brokers are generally unregulated in most parts of the world, allowing anyone to become a broker without barriers to entry. Due diligence is essential for prospective yacht buyers to assess the credibility and ethics of brokerages and individual brokers. Brokers often prefer to work under a Central Agency Agreement, granting them exclusive rights to market the yacht and ensuring a return on their investment. It is important for buyers to verify if the broker they are dealing with is the Central Agent to avoid complex communication chains. The exclusivity term in the Central Agency Agreement can be negotiated, but sufficient time should be given to the broker for marketing and selling the vessel. In most parts of the world, yacht brokers aren’t regulated in law. There are no barriers to entry. Anyone can set themselves up as one – and many frequently do. Some brokers are not averse to offering insurance, for example, without the necessary regulatory permits to do so – which often paints an accurate picture of their approach to professional ethics and legal niceties. Recommendations are useful, but prospective buyers need to conduct due diligence on both brokerages and individual brokers. CENTRAL AGENTS As well as working under their own terms and conditions, brokers usually prefer to work under a Central Agency Agreement – under which they have the exclusive right to market the yacht. This gives them peace of mind and will encourage them to do their best to sell the vessel, safe in knowledge that – unless the vessel fails to sell at all – they will see a return on their investment. As a prospective buyer, you should ensure that the broker you are dealing with is indeed the Central Agent: otherwise an unnecessary and inefficient chain of communications can be set up which makes negotiating that much more complex, lengthy and uncertain. MYBA, for example, produces its own approved, standard Central Agency Agreement which is reasonably fair if somewhat simplistic. The exclusivity term of the Central Agency Agreement is a matter of negotiation, but the broker should be afforded a sufficient chance to market and sell the vessel – keeping in mind the yacht show calendar, the vessel’s usual mooring location and the time needed to produce promotional materials, videos, etc. Crucially, under such agreement the broker is usually entitled to commission where the yacht is sold during the period of its currency – even if the sale had nothing to do with the broker’s efforts. Perhaps the seller has a business associate looking to buy her – or a regular charterer is looking to make her his own: if these are realistic possibilities, the agreement will need amending. Alternatively, the seller may prefer to appoint more than one central agent under a Joint Central Agency Agreement, with multiple agents deciding between themselves how the vessel is to be marketed and the commission split. Attention must still be paid to what is to happen where a sale occurs regardless of the joint central agents’ efforts. Disputes between sellers and brokers most often occur because of the vagueness of, or ambiguities contained in, the broker's instructions. Brokers may also seek to regulate the relationship between them and their clients with ‘standard’ terms and conditions. Any prospective client would be urged to examine these carefully, and take advice, to ensure that there are no misunderstandings about the scope of the services being supplied – and the limitation and exclusions which may apply. Any clauses seeking to exclude or limit liability will be subject to laws governing unfair contract terms – and so cannot necessarily be taken at face value. Further, in the unlikely event that the seller is an individual, rather than a company, the terms must usually comply with the Consumer Rights Act 2015 which seeks to ensure that contracts within its remit are, broadly, as fair as possible. In providing brokerage services, a legal agent/principal relationship is established. This means that the relationship between seller and broker is governed not only by the written arrangements made in the brokerage agreement, but by the unwritten (as far as the parties are concerned) law of agency. Well understood by lawyers, but not necessarily by the parties, there can be obligations owed by broker to the seller, and vice versa, of which one or neither is completely unaware. INTERMEDIARY BROKERS Sometimes, central agents just don’t have sufficient market penetration. Perhaps they just don’t have the necessary geographic or cultural reach, or it’s just that their little black book doesn’t have the right numbers in it. They may use other brokers (known as intermediary or sub brokers) and/or other parties to reach the ear of the prospective client. While this should be avoided, for the reasons touched on above, sometimes it’s unavoidable if an opportunity isn’t to be lost. While intermediary brokers have no contractual connection with the seller, they nevertheless have certain rights and obligations. The law recognises the intermediary broker’s right (unless other arrangements have been agreed between them and the Central Agent) to be paid a commission – but only where such broker introduces the buyer to the purchase opportunity, and – crucially – was thereby the, or an, “effective cause” of the sale. In determining where an intermediary broker’s’ actions formed an effective cause rather than simply a cause, the question is whether the party actually brought about the relationship between the buyer and seller. There is no clear set of principles which can be distilled from the many legal cases on this subject. Whether such broker is the effective cause simply depends on the facts of each case – but such an effective cause will be very readily implied by the courts. The intermediary broker does not have to complete or even take part in the negotiations which do take place, nor arrange any meeting, nor persuade either party to enter into the contract. Commission will still be due where the price agreed is lower than that originally put forward. REASONABLE CARE & SKILL Under section 13 of the Supply of Goods and Services Act of 1982, the broker will have an automatic legal duty to exercise reasonable care and skill in performing its services - subject to any express terms of the brokerage agreement. What constitutes reasonable care and skill is what one would expect of a competent yacht broker. In court, independent and authoritative expert testimony would likely be sought to establish what such expectations are and whether these have been met. Intermediary brokers also owe sellers a duty to exercise reasonable care and skill – even in the absence of a direct contractual link. FIDUCIARY DUTIES As agents, brokers owe their principals other particular legal duties, including acting in good faith, and not acting in its own interest (or that of a third party) without the principal's consent. It’s no excuse that the principal would have consented had he or she been asked. COMMISSION There can be confusion regarding the extent to which broker must disclose third party commissions paid, by the broker, in connection with each sale. The courts have accepted that – in the commercial shipping world at least – market practice encompasses the paying of commission, by brokers, to intermediary brokers and other third parties, as part of the broker’s own outgoings. The broker is not required to disclose such costs to his principal unless specifically requested. But (and it’s a big but!) brokers must ensure that their actions do not lead to anyone breaching the provisions of the Bribery Act. It is easy to foresee circumstances under which a captain of the yacht for sale receives a commission without the consent of his employer – thereby committing a criminal offence to which the broker is then an accessory. BROKER AS STAKEHOLDER Under the MYBA Memorandum of Agreement (MOA), the seller’s broker normally acts as ‘stakeholder’ – holding the deposit. This is typical of many such standard sale agreements. The broker must distribute the funds upon the occurrence of certain events listed in the agreement – and must not follow the instructions of other parties including the broker’s own client. Surprisingly, there’s nothing in the MYBA MOA obliging the broker to keep funds in a separate client account, nor pay interest on the cash it holds. PAYING THE BROKER Under the MYBA sale form, the seller must pay the commission directly to the broker(s) identified in the MOA, on successful completion of the sale, or where the sale is not finalised but the seller and the buyer agree a sale within two years of the sale agreement. The broker is made a party to the agreement for certain purposes – giving it the right to enforce those clauses relating to commission. Where the broker isn’t party to the sale agreement, a right of enforcement may be provided by the Contracts (Rights of Third Parties) Act of 1999, which grants a third party the right to enforce a contract under certain circumstances. What practical use this would be where the seller is an owning company which has just sold its only asset and distributed the resulting funds is another matter. COMPLAINTS Where owners are dissatisfied with a broker’s behaviour, it is often worth seeing if matters can be brought to satisfactory conclusion without the need for litigation. Brokers are often members of associations which may have their own codes of conduct, and may have a complaints mechanism. Professional indemnity insurance may be required, and a conversation with underwriters may focus minds especially where there is a substantial policy excess. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about MYBA MOA Clause by Clause Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about MYBA MOA Clause by Clause