How To Spot An Illegal Yacht Charter

Illegal yacht charters operate without proper authorization and in violation of federal regulations enforced by the U.S. Coast Guard. Recently, the rise of online booking platforms, where private owners can list their boats for charter, has resulted in a sharp increase in the number of illegally operated charters. This has prompted serious safety concerns, as many of these vessels and their associated crew do not meet the required standards and regulations for commercial operations. This article discusses how to spot an illegal yacht charter and how to avoid booking one unknowingly.

Illegal Yacht Charters Raise Serious Safety Concerns

Primary Indicators of an Illegal Yacht Charter:

Below is a comprehensive list of the many ways illegal charter companies skirt laws and U.S. Coast Guard regulations.

• Carrying Too Many Passengers: The charter company knowingly exceeds the legally permissible passenger capacity for an uninspected passenger vessel. (Without a Certificate of Inspection, the legal limit is 6 passengers)

• Lack of Coast Guard-issued Merchant Mariner Credential (Captain's License): The captain does not have the required license to operate the vessel for commercial purposes.

• Absence of Random Drug Testing Program Enrollment: The operator and the crew are not enrolled in a random drug testing consortium.

• No Certificate of Inspection: Vessels carrying more than six passengers are required to have a Coast Guard Certificate of Inspection (COI).

• Misrepresented 'Bareboat Charters': A 'bareboat' or 'demise' charter is an agreement whereby the vessel owner transfers complete possession and operational control to the charterer. The charterer acts as the temporary owner, responsible for hiring the crew, navigating the vessel, and covering all expenses (fuel, insurance, and maintenance). These types of charters are often used to disguise illegal operations. For example, under bareboat regulations, the owner of the vessel is not permitted to be onboard during the charter. Illegal charter boat companies leverage 'bareboat' contracts to exceed the 6 passenger limit and charge more for the experience.

• Predetermined Crew listed on a 'Bareboat Charter Agreement': The selection of crew assigned to a Bareboat Charter is the responsibility of the Charterer, not the vessel's owner. You'll find that those who are chartering illegally often put themselves forward as the assigned crew. If the owner of the vessel offers to serve as captain for the charter, the charter is automatically deemed an illegal bareboat charter because the owner is not permitted to be aboard. For a comprehensive article on bareboat charters, please click here.

• Lack of Commercial Charter Boat Insurance: The owner of the vessel does not carry a commercial insurance policy, and instead relies on a recreational policy. In the event of an accident, private policies will not cover charter guests, because the boat is being operated outside of its intended use.

• Lack of USCG Documentation: Charter vessels that weigh more than five net tons and are longer than 30 feet must be documented by the U.S. Coast Guard. If the owner is unable to produce proof of USCG Documentation, they are operating illegally. To check if a boat is documented with the U.S. Coast Guard, you can perform a free search on the USCG Official Number Lookup page.

Risks Associated with Illegal Charters:

Booking an illegal charter comes with several additional risks:

• Safety Hazards: Illegal charters often do not meet federal safety regulations, putting passengers at risk due to lack of proper safety equipment, seaworthiness, and licensed captains.

• Legal Consequences: Both the operator and passengers can face legal issues, including significant fines and penalties.

• Lack of Proper Insurance Coverage: The operator's insurance may be voided, potentially leaving passengers without coverage in the event of an accident.

• Voided Life Insurance: In serious cases, a passenger's life insurance policy might also be voided.

How to Identify and Avoid Illegal Charters:

Below are some tips for identifying an illegal charter boat operation:

• Ask for Credentials: Request to see the captain's Merchant Mariner Credential to confirm their license and boating qualifications. A valid captain's license looks like a U.S. passport but with a red cover.

• Check for a COI: If you are booking a charter with more than six passengers, ask to see a copy the Certificate of Inspection prior to your scheduled charter. This should be kept onboard and easily accessed by the crew.

• Be Skeptical of Passenger Limits: If you are chartering a crewed vessel under 55 feet in length and the owner agrees to allow more than 12 passengers, the owner is likely operating illegally. The 12-passenger limit on most charter vessels is due to international maritime regulations that classify vessels carrying more than 12 people as "passenger ships" vs. 'private yachts'. While many yachts are designed to safely carry more than 12 guests, exceeding this limit requires additional certifications and equipment making the process too costly and unrealistic for most yacht owners.

• Be Skeptical of Deals: Extremely low prices or too-good-to-be-true offers are usually a red flag.

• Confirm Enrollment in Random Drug Testing Program: Ensure that the operator of the vessel and the crew are enrolled in a random drug testing program.

• Verify Compliance with Regulations: Inquire about compliance with Coast Guard regulations and safety protocols. For example, charter boats are required to have Type I life vests in adult and children's sizes for all passengers.

Spotting an illegal charter is fairly straightforward once you have a general understanding of how the charter industry is regulated. Close attention to the points raised in this article will help you avoid booking an illegal charter unknowingly.