trawlers@lists.trawlering.com

TRAWLERS & TRAWLERING LIST

View all threads

TWL: Insurance on Offshore Documented Vessels

J
Jeg607@aol.com
Tue, Jan 21, 2003 3:43 PM

Hello All,

As a followup to my post last night regarding insurance on a vessel flagged
outside the US:

A number of Listees have responded off-list, including one kind soul who said
that "I could cruise wherever I wanted to since the vessel was registered in
NC", and others who have asked for more info on the situation. I composed and
sent a post late last night, but as yet have not seen it appear on the List,
so I'll try again.

While I sincerely wish that the Listees' interpretation of the situation
WOULD allow me to cruise wherever I wanted, the reality is not so! The
information that follows is the result of 5 months of phone calls and
correspondence with US Customs inspectors in 4 different cities, all of whom,
while commiserating with my plight, have confirmed the information. Three
documentation companies in Florida have also backed up the US Customs
interpretation. The problem lies in the fact that the laws creating my
problem have been on the books for a long time, but until the events of 9-11,
had not been enforced. However, they ARE being enforced diligently now!

Here's the situation:

I am Canadian, living on board in the US, with Alien Resident (Green Card)
status, with a boat that is registered in NC. As a non-citizen, I cannot
document the boat with the USCG, thus can only register it in a state. The
boat is currently insured with a US carrier, as a US flagged vessel.

Before 9-11, I traveled by boat in and out of the US, into Canada during the
summers to cruise in my favorite summer cruising area, the Great Lakes,
Trent-Severn and Rideau systems, and in the winter to the Bahamas.

Since the boat is in essence US-registered (but not "documented"), it is
considered flagged in the US and therefore I do not qualify for a "cruising
permit" which applies only to foreign-flagged vessels.

Since I am a non-citizen who owns a US-flagged vessel, I can only cruise
after obtaining a "Permit to Proceed" from the "local" US Customs office.
This must be done in person, and requires that I leave my state registration
and title with that office. Obviously, this can be quite onerous, since the
"local" office may indeed be quite far away, and as a liveaboard cruiser, I
don't have a car handy and would have to travel by bus or taxi. The "local"
office to me right now is over 50 miles away!

The Permit to Proceed requires that I identify the next port and the
estimated time in transit. The Permit allows me to cruise directly to that
port, where I have to advise the new "local" US Customs office that I have
arrived. They then contact the previous "local" office which then forwards my
registration and title to the "new" office. When I need to continue "down the
road", the process must be repeated, i.e., I have to somehow get to the
"local" office to obtain a new Permit to Proceed for the next leg. As you
might expect, this could become costly in time and travel expense, plus is a
royal pain in the butt!

It gets even worse if I were to cruise outside US waters and then return to
the States. Upon my return, the boat will be seized, and IF (no guarantees!)
returned to me, would be given back only after I paid a substantial fine.
This has already happened to other non-citizens who were not aware that the
laws existed, and were being enforced. Ignorance is NOT an excuse, and to
date, this fine has not been below $5K, and in fact can be as high as the
assessed value of the vessel! So...cruising to the Bahamas right now and to
Canada this summer is definitely out of the question. In fact, this "problem"
is the reason I am writing this post while sitting on a cold boat with both
heaters blasting away, in the same slip I've been in since Nov. 01, and not
in the Bahamas!

As mentioned earlier, prior to 9-11, US Customs inspectors didn't bother to
enforce the law, especially if the owner was a Canadian, but that has now
changed!

Each US Customs office and the documentation companies have advised that
there are two solutions to the problem:

The first is to become a US citizen. Then I would have all of the rights most
of the members of this List have. However, in my "local" INS area, the
processing time is at least 18 months, with no guarantee that I would get US
citizenship. In the meantime, I'm stuck with a "cruising" problem.

The second is to document the vessel offshore. I would then qualify for a 12
month cruising permit as a foreign-flagged vessel and could cruise at will in
the US. Strangely, a foreign-flagged vessel owned by a US citizen qualifies
only for a 6 month cruising permit. Go figure!

It would also allow me to cruise offshore and in and out of Canadian waters
as necessary. The process required another survey, proof that the vessel is
seaworthy, and an official in-person calculation of the gross tonnage. The
extensive hull and engine surveys done last August when I bought the boat do
not qualify! I am almost finished with the documentation process and should
be registered offshore by early next week. At that time, my "cruising"
problem will be solved.

Last night's original post was to ask if anyone on the List had encountered
any problems with insuring a foreign-flagged vessel with a US insurance
carrier. I contacted my insurer this morning, and the good news is that they
will continue to insure my boat, regardless of the country of registry.

One off-list responder questioned the "remaining 4 BU" cost to finish the
process of documenting the boat. Perhaps his experience with offshore
documentation does not include the country I have chosen. The registry will
be in St. Vincent and the Grenadines. The Bahamas, Bermuda, the BVI, the
Caymans, the Turks and Caicos, etc., all require that I set up a company
(which will actually own the boat) in their countries, which requires a hefty
incorporation charge and an annual maintenance fee. St. Vincent will allow me
to continue to own the vessel personally, and does not require me to set up a
company. St. Vincent also did not require that the vessel be physically in
St. Vincent, unlike Canada.

If anyone on the List knows a documentation company that will do the job in
St. Vincent for less than the remaining $4K, please email me quickly. I can
forfeit the monies already spent if the savings with another firm would be
substantial enough.

Hopefully, this post explains the quirkiness of the situation better than
last night's original post! :>)  If anyone has any comments, questions or
advice, please feel free to let me know!

Regards,

John Garrison
M/V "Canatara" - Tiger 41 Trunk Cabin

Hello All, As a followup to my post last night regarding insurance on a vessel flagged outside the US: A number of Listees have responded off-list, including one kind soul who said that "I could cruise wherever I wanted to since the vessel was registered in NC", and others who have asked for more info on the situation. I composed and sent a post late last night, but as yet have not seen it appear on the List, so I'll try again. While I sincerely wish that the Listees' interpretation of the situation WOULD allow me to cruise wherever I wanted, the reality is not so! The information that follows is the result of 5 months of phone calls and correspondence with US Customs inspectors in 4 different cities, all of whom, while commiserating with my plight, have confirmed the information. Three documentation companies in Florida have also backed up the US Customs interpretation. The problem lies in the fact that the laws creating my problem have been on the books for a long time, but until the events of 9-11, had not been enforced. However, they ARE being enforced diligently now! Here's the situation: I am Canadian, living on board in the US, with Alien Resident (Green Card) status, with a boat that is registered in NC. As a non-citizen, I cannot document the boat with the USCG, thus can only register it in a state. The boat is currently insured with a US carrier, as a US flagged vessel. Before 9-11, I traveled by boat in and out of the US, into Canada during the summers to cruise in my favorite summer cruising area, the Great Lakes, Trent-Severn and Rideau systems, and in the winter to the Bahamas. Since the boat is in essence US-registered (but not "documented"), it is considered flagged in the US and therefore I do not qualify for a "cruising permit" which applies only to foreign-flagged vessels. Since I am a non-citizen who owns a US-flagged vessel, I can only cruise after obtaining a "Permit to Proceed" from the "local" US Customs office. This must be done in person, and requires that I leave my state registration and title with that office. Obviously, this can be quite onerous, since the "local" office may indeed be quite far away, and as a liveaboard cruiser, I don't have a car handy and would have to travel by bus or taxi. The "local" office to me right now is over 50 miles away! The Permit to Proceed requires that I identify the next port and the estimated time in transit. The Permit allows me to cruise directly to that port, where I have to advise the new "local" US Customs office that I have arrived. They then contact the previous "local" office which then forwards my registration and title to the "new" office. When I need to continue "down the road", the process must be repeated, i.e., I have to somehow get to the "local" office to obtain a new Permit to Proceed for the next leg. As you might expect, this could become costly in time and travel expense, plus is a royal pain in the butt! It gets even worse if I were to cruise outside US waters and then return to the States. Upon my return, the boat will be seized, and IF (no guarantees!) returned to me, would be given back only after I paid a substantial fine. This has already happened to other non-citizens who were not aware that the laws existed, and were being enforced. Ignorance is NOT an excuse, and to date, this fine has not been below $5K, and in fact can be as high as the assessed value of the vessel! So...cruising to the Bahamas right now and to Canada this summer is definitely out of the question. In fact, this "problem" is the reason I am writing this post while sitting on a cold boat with both heaters blasting away, in the same slip I've been in since Nov. 01, and not in the Bahamas! As mentioned earlier, prior to 9-11, US Customs inspectors didn't bother to enforce the law, especially if the owner was a Canadian, but that has now changed! Each US Customs office and the documentation companies have advised that there are two solutions to the problem: The first is to become a US citizen. Then I would have all of the rights most of the members of this List have. However, in my "local" INS area, the processing time is at least 18 months, with no guarantee that I would get US citizenship. In the meantime, I'm stuck with a "cruising" problem. The second is to document the vessel offshore. I would then qualify for a 12 month cruising permit as a foreign-flagged vessel and could cruise at will in the US. Strangely, a foreign-flagged vessel owned by a US citizen qualifies only for a 6 month cruising permit. Go figure! It would also allow me to cruise offshore and in and out of Canadian waters as necessary. The process required another survey, proof that the vessel is seaworthy, and an official in-person calculation of the gross tonnage. The extensive hull and engine surveys done last August when I bought the boat do not qualify! I am almost finished with the documentation process and should be registered offshore by early next week. At that time, my "cruising" problem will be solved. Last night's original post was to ask if anyone on the List had encountered any problems with insuring a foreign-flagged vessel with a US insurance carrier. I contacted my insurer this morning, and the good news is that they will continue to insure my boat, regardless of the country of registry. One off-list responder questioned the "remaining 4 BU" cost to finish the process of documenting the boat. Perhaps his experience with offshore documentation does not include the country I have chosen. The registry will be in St. Vincent and the Grenadines. The Bahamas, Bermuda, the BVI, the Caymans, the Turks and Caicos, etc., all require that I set up a company (which will actually own the boat) in their countries, which requires a hefty incorporation charge and an annual maintenance fee. St. Vincent will allow me to continue to own the vessel personally, and does not require me to set up a company. St. Vincent also did not require that the vessel be physically in St. Vincent, unlike Canada. If anyone on the List knows a documentation company that will do the job in St. Vincent for less than the remaining $4K, please email me quickly. I can forfeit the monies already spent if the savings with another firm would be substantial enough. Hopefully, this post explains the quirkiness of the situation better than last night's original post! :>) If anyone has any comments, questions or advice, please feel free to let me know! Regards, John Garrison M/V "Canatara" - Tiger 41 Trunk Cabin