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Old 20-02-2015, 13:36   #76
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Re: Where do we flag our boat?

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Originally Posted by Dockhead View Post
You have a US citizen daughter? Why didn't you say so?

(snip)

But there are still other ways to do it -- you can just register the boat in your daughter's name without any company. If you like, you can set up a revocable trust
(snip)
Many thanks Dockhead! There are many things I have not told you and that is probably a good thing!

Jokes aside, my daughter was under 18 during my last stint in the US. I will keep your recommendations for the next time. Now I know that I can even avoid the corporation provided I check that ownership in her name with revocable trust in my favor does not make her "richer" for university/grad school financing purposes.
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Old 20-02-2015, 13:46   #77
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Re: Where do we flag our boat?

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Originally Posted by Dockhead View Post
You can register in Florida just like you can in Delaware. We told you that already. The problem is getting Coast Guard documentation, which you can't do as a natural person and foreign citizen. I think several people told you, including me, that you can do state registration without any complication, no company, no citizenship requirement, etc..

Whether or not you will be happy with just state registration and no CG documentation is a different question. As long as you stay in the US, and probably Caribbean, you'll probably be fine. Maybe even in Europe. You'll have to do your own research on that; cruising abroad on US state registration alone is beyond my knowledge and experience.

If you do do state registration, you will lose whatever previous flag you had -- keep that in mind. You cannot flag a vessel in two countries simultaneously:

Article 92

Status of ships

1. Ships shall sail under the flag of one State only and, save in exceptional cases expressly provided for in international treaties or in this Convention, shall be subject to its exclusive jurisdiction on the high seas. A ship may not change its flag during a voyage or while in a port of call, save in the case of a real transfer of ownership or change of registry.

2. A ship which sails under the flags of two or more States, using them according to convenience, may not claim any of the nationalities in question with respect to any other State, and may be assimilated to a ship without nationality.


UNCLOS, Article 92
Great info THANKS.
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Old 20-02-2015, 16:38   #78
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Re: Where do we flag our boat?

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Originally Posted by Dockhead View Post
Two things about this:

1. A cruising license does not, indeed, exempt a foreign-flagged vessel from the onerous requirement to report your every movement.

See: https://help.cbp.gov/app/answers/det...ruising-permit


2. US state registration without Coast Guard documentation may or may not satisfy all foreign authorities. I have heard that there are a number of countries which don't recognize any US registration other than Coast Guard documentation. "I have heard" doesn't mean "it's necessarily so", so you'll have to do your own research. You should at least be aware that there is a question about it.


For example: "As to USCG documentation, you will not be able to enter many foreign countries and islands without it. State registration is not recognized in some of the countries. " Boat Registration... - Cruiser Log World Cruising & Sailing Forums
You've been great Dockhead. Thank you.

I see the problem clearly now. Even with a Florida registration and a Florida certificate of title I will still be deemed a foreigner by the USCG even though I'm a legal "permanent " resident in the USA. And being deemed a foreigner any boat I own will be deemed a foreign vessel. This is messed up. Makes you want to think about giving back that residency card and tell them to put it where the sun doesn't shine. It has me thinking why keep paying all these taxes to the US Government when I'm treated like this. As an Australia I can come into the USA with a visa waiver no problems and save myself a fortune in US taxes. Its not as if I don't have other places I own in other parts of the World to live in.

Other option is to use nominee directors on a US corporation and even though I would still be the company owner have that company own the boat. Like you say so many do it that way. Still uncomfortable with that because it is like hiding the true ownership of the boat from the USCG. But may be the only sensible way if I want the boat parked in my backyard in Florida.

Other option is to keep it in a friendly Island country and fly there when I want and sail to Florida when and if I want.

By the way having a Florida registration and a separate Florida Certificate of Title should be enough for foreign countries. From what ice been reading is that people have had problems in foreign ports when they tried to use just their Florida registration. And they didn't have a Florida Title. The Florida title is evidence of ownership. Not the registration.

Thanks again for all your kind help.
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Old 20-02-2015, 16:38   #79
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Re: Where do we flag our boat?

Quote:
Originally Posted by Dockhead View Post
1. A cruising license does not, indeed, exempt a foreign-flagged vessel from the onerous requirement to report your every movement.

See: https://help.cbp.gov/app/answers/det...ruising-permit

[/url]
The link does not support claim #1, which I find untrue anyway. I am the first to complain about the US Feds making life difficult for "aliens" as they call us but I think the Cruising License works great in practice if you follow the rules, despite all the outdated and plain incorrect info in Noonsite. In summary, with a cruising license the only requirement when you move across port areas is to make one phone call. Gory detail follows; corrections are welcome.

The link posted refers to departure from the US to another country, not moving the boat (a lot or a little) in the US. I would not call it "onerous" to make one phone call when you leave a country. By the way, in my experience they usually tell you they do not need to talk to you; only if you demand it politely (as I did one time to get proof that I had not overstaid) they will generate a clear-out form and email it to you. You do not even need to stop to return the I-94s these days....Just sail out of the US, which now makes it possible for "aliens" to stop at Coral Bay on the way from St Thomas to the BVI.

In my experience when you move a foreign boat WITHIN the the US (which is the only requirement that can be frequent enough could be considered "onerous" for a normal cruiser or sailor) there are two cases:

Without a cruising license: I did it only in one trip (did not know about the cruising license) so I do not have many data points.

As per 19CFR4.60.(a).(2) you are supposed to clear out every time you leave a port, but in practice they did not ask for this.
19CFR4.60 Vessels required to clear.
(a) Unless specifically excepted by law, the following vessels must obtain clearance from CBP before departing from a port or place in the United States:
(2) All foreign vessels departing for another port or place in the United States;
As per 19CFR4.3.(a).(2) they want you to make "formal entry" in the following port
19 CFR 4.3 Vessels required to enter; place of entry.

(a) Formal entry required. Unless specifically excepted by law, within 48 hours after the arrival at any port or place in the United States, the following vessels are required to make formal entry:
(1) Any vessel from a foreign port or place;
(2) Any foreign vessel from a domestic port;
This "entry" requires you to fill a form and present it in person, which is the usual Third World practice every time you move to the next "port". There is also an obligation to report the arrival as per 19CFR4.2,(a) but in practice does seem to included in the the "formal entry".

With a cruising license:

My experience is consistent with 19CFR4.94 and particularly:
  • The country of registration must appear in 19CFR4.94(b)
  • For internal moves within the US they remove the requirement to request "clearance" in the old port, and make "entry" in the new port. That is important because at least the latter needs to be done in person. See 19CFR4.94(b) for detail.
  • You still need to "report" the move between areas "by any means of communication to the port director" as per 19CFR4.2(a), but this is only a phone call to a toll-free number.
  • In my experience the port "areas" they use in practice as base for when to report are fairly consistent with the list in 19CFR101.3(b), eg Puerto Rico is divided in 8 areas, St John in two, Florida in two, etc.
A note on duty
If the "alien" owner is a US resident then the boat is dutiable upon entry even if the boat is foreign-flagged flagged and has a cruising license, or if duty has been paid before by another owner but the boat was later sold outside the US. See the cruisng license form in 19CFR4.94(c). The CBP guy will not talk to you about duty but you cannot use that as defense if/when they go after you later. As always, boats made in US, Canada, Mexico do not pay duty and boats made in GSP countries pay no or reduced duty.

**
I am not surprised that the cruising license systems works so well. After all, rich campaign contributors bring their convenience-flagged superyachts into the US under cruising licenses, so the lawmakers make sure they do not face any difficulty!
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Old 20-02-2015, 16:53   #80
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Re: Where do we flag our boat?

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Originally Posted by svlamorocha View Post
The link does not support claim #1, which I find untrue anyway. I am the first to complain about the US Feds making life difficult for "aliens" as they call us but I think the Cruising License works great in practice if you follow the rules, despite all the outdated and plain incorrect info in Noonsite. In summary, with a cruising license the only requirement when you move across port areas is to make one phone call. Gory detail follows; corrections are welcome.

The link posted refers to departure from the US to another country, not moving the boat (a lot or a little) in the US. I would not call it "onerous" to make one phone call when you leave a country. By the way, in my experience they usually tell you they do not need to talk to you; only if you demand it politely (as I did one time to get proof that I had not overstaid) they will generate a clear-out form and email it to you. You do not even need to stop to return the I-94s these days....Just sail out of the US, which now makes it possible for "aliens" to stop at Coral Bay on the way from St Thomas to the BVI.

In my experience when you move a foreign boat WITHIN the the US (which is the only requirement that can be frequent enough could be considered "onerous" for a normal cruiser or sailor) there are two cases:

Without a cruising license: I did it only in one trip (did not know about the cruising license) so I do not have many data points.

As per 19CFR4.60.(a).(2) you are supposed to clear out every time you leave a port, but in practice they did not ask for this.
19CFR4.60 Vessels required to clear.
(a) Unless specifically excepted by law, the following vessels must obtain clearance from CBP before departing from a port or place in the United States:
(2) All foreign vessels departing for another port or place in the United States;
As per 19CFR4.3.(a).(2) they want you to make "formal entry" in the following port
19 CFR 4.3 Vessels required to enter; place of entry.

(a) Formal entry required. Unless specifically excepted by law, within 48 hours after the arrival at any port or place in the United States, the following vessels are required to make formal entry:
(1) Any vessel from a foreign port or place;
(2) Any foreign vessel from a domestic port;
This "entry" requires you to fill a form and present it in person, which is the usual Third World practice every time you move to the next "port". There is also an obligation to report the arrival as per 19CFR4.2,(a) but in practice does seem to included in the the "formal entry".

With a cruising license:

My experience is consistent with 19CFR4.94 and particularly:
  • The country of registration must appear in 19CFR4.94(b)
  • For internal moves within the US they remove the requirement to request "clearance" in the old port, and make "entry" in the new port. That is important because at least the latter needs to be done in person. See 19CFR4.94(b) for detail.
  • You still need to "report" the move between areas "by any means of communication to the port director" as per 19CFR4.2(a), but this is only a phone call to a toll-free number.
  • In my experience the port "areas" they use in practice as base for when to report are fairly consistent with the list in 19CFR101.3(b), eg Puerto Rico is divided in 8 areas, St John in two, Florida in two, etc.
A note on duty
If the "alien" owner is a US resident then the boat is dutiable upon entry even if the boat is foreign-flagged flagged and has a cruising license, or if duty has been paid before by another owner but the boat was later sold outside the US. See the cruisng license form in 19CFR4.94(c). The CBP guy will not talk to you about duty but you cannot use that as defense if/when they go after you later. As always, boats made in US, Canada, Mexico do not pay duty and boats made in GSP countries pay no or reduced duty.

**
I am not surprised that the cruising license systems works so well. After all, rich campaign contributors bring their convenience-flagged superyachts into the US under cruising licenses, so the lawmakers make sure they do not face any difficulty!
So it looks I can buy my boat in Europe and save big dollars with the fall of the Euro. Bring it into the USA and pay a duty of $18,000 for a $1,200,000 boat. Pay another $18,000 one time tax in Florida and then I'm OK keeping it in the USA. Only other expense is $125.00 or so for the Cruising License. Of course $54. or about for registration and under $100.00 for a Florida Certificate of Title. A certificate of title is different to a registration.

After all that I should be good to go around the world without a USCG registration and come back home when I won't to Florida. My boat. My name on its papers. No problems.
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Old 20-02-2015, 17:19   #81
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Re: Where do we flag our boat?

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Originally Posted by GoingWalkabout View Post
So it looks I can buy my boat in Europe and save big dollars with the fall of the Euro. Bring it into the USA and pay a duty of $18,000 for a $1,200,000 boat. Pay another $18,000 one time tax in Florida and then I'm OK keeping it in the USA. Only other expense is $125.00 or so for the Cruising License. Of course $54. or about for registration and under $100.00 for a Florida Certificate of Title. A certificate of title is different to a registration.

After all that I should be good to go around the world without a USCG registration and come back home when I won't to Florida. My boat. My name on its papers. No problems.
It gets even better. AFAIK with the cruising license you do not need to $18k Florida tax unless/until you turn from alien into citizen.
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Old 20-02-2015, 17:47   #82
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Re: Where do we flag our boat?

"Only other expense is $125.00 or so for the Cruising License. "

Ah, no. IIRC that's a Cruising Permit, not License. And it allows a foreign-flagged vessel, which yours won't be, to enter US waters for a period of not more than one year, after which you must EXIT US waters for at least 15 days before you can re-apply for another Permit. Which usually is granted, but does not have to be.

You will dig yourself into a hole if you keep trying to beat this system. Either you own a state-registered boat, in which case you normally will need a residential address in that state which may trigger other liabilities including taxes, or you own a federally documented vessel, which you can't do as an alien, or you bring in a foreign flagged boat, subject to the terms of the Cruising Permit.

A revocable trust with the citizen daughter may bring up more complexities, including her liability for the vessel, her finances overall, and other complexities that will also vary by state. You'd want to hire an attorney, presumably an "estate and trust" specialist, in her state, and then have an hour long conference exploring those options.

And then, if you did put the boat in a revocable trust in her name? You'd hit problems because you, as the operator, weren't the registered owner when the vessel was clearing customs. Someone gets sick and someone else has to move the boat home? Ah, yes, but who are you? You're not the registered owner. No problem IF you're aware of how the game must be played.
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Old 20-02-2015, 18:45   #83
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Re: Where do we flag our boat?

In just reading the "expert" advice here, including my own. All meant well and accurate to the best of the poster's knowledge and research but so many differing opinions and "fact" in conflict with the "facts" of others it once again just emphasizes so the need for a maritime attorney in decisions like this. Getting ideas and thoughts here is great. It does make you aware of many of the issues. But there may still be that one "small" issue that is huge. Best of luck to any of you facing difficult issues on flags.

One thing that becomes increasingly obvious to me is how many of our issues in boating and otherwise are attributable to laws and regulations written when the world was so much bigger. Other states seemed so far, much less countries. People didn't go into other areas as they do today. Just that occasional adventurer. It's crazy in the US that every state has different regulations but when it was decided how states would operate it took weeks to get from the west coast to the east. When many of the laws of travel between countries were established they didn't impact as many people as today. Now Europe has had major changes. I understand not wanting boaters to just move in without doing it all legally and paying taxes. But how much sense does it make for any country to limit tourism? Does it make sense to chase me out of a Schengen country into a non-Schengen after a limited period when I'm spending large amounts of money there? Honestly, there should just be one massive documentation, registration system and people do it anywhere they want in the world, but that's not realistic.
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Old 21-02-2015, 07:39   #84
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Re: Where do we flag our boat?

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Ah, no. IIRC that's a Cruising Permit, not License.
I disagree.

I have not idea where the expression "Crusing Permit" comes from. When I go to CBP I ask for a "Crusing License" and get a piece of paper that says "License To Cruise in the Waters of the United States". That is the exact wording from 19CFR4.94(d). I do not post a copy of the last one (expired) because it is on the boat. I know that some CBP FAQ pages use the words interchangeably, but I have not see that in the official rules or forms. I think the confusion comes from the "permit to proceed" which is another thing.

If you have ever seen a CBP document that says "Cruising Permit" or CFR wording to that effect please post it and we will learn something.

Quote:
Originally Posted by hellosailor View Post
" And it allows a foreign-flagged vessel, (snip) to enter US waters for a period of not more than one year, after which you must EXIT US waters for at least 15 days before you can re-apply for another Permit. Which usually is granted, but does not have to be.
I disagree again. You must leave for 15 days and touch another country ONLY if you let the old one expire or if you are not eligible for "successive cruising licenses", which is a very predictable "if".

If duty is paid or boat is US-made and the boat is flagged in one of the countries in the 4.4(b) list the you can get the "successive cruising license" without moving the boat. This appears to follow the letter of Customs Directive 3130-006A from 1999, which says
6.1.2 Successive Cruising Licenses may be issued to a foreign documented pleasure vessels which were built in the United States or on which United States Customs duty has been paid, provided, that the vessel is documented under the laws of one of the countries listed in 19 CFR 4.94(b).
AFAIK they always grant it if you are eligible. All the denials I know where for boats that had overstaid their original license (ie broken the law), or were foreign made but duty had not been paid. I confess I have not been able to track down Customs Directive 3130-006B of 2004. In practice I see that they also require that the owner be a resident of the US in order to grant a successive license. May be that is spelt out in the new 3130-006B directive.

I would suspect that the residency requirement weeds out those boats owned by foreign corporations, which are "nonresident" in the US.

All this seems to suit Going Walkabout very well, because she is not trying to avoid duty, just wants to have a 100% legal way to have a boat in her name in the US while she lives there despite the fact that she is an "alien".
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Old 02-03-2015, 13:16   #85
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Re: Where do we flag our boat?

US citizen registering a boat with the Coast Guard as a documented vessel. ...very simple. did it. don't need any state registration.
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Old 02-03-2015, 14:43   #86
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Re: Where do we flag our boat?

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US citizen registering a boat with the Coast Guard as a documented vessel. ...very simple. did it. don't need any state registration.
Depends on the state. Most states still require registration of some sort but at most only require you put a decal on the boat instead of numbers.
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Old 04-03-2015, 11:24   #87
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Re: Where do we flag our boat?

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Other option is to use nominee directors on a US corporation and even though I would still be the company owner have that company own the boat. Like you say so many do it that way. Still uncomfortable with that because it is like hiding the true ownership of the boat from the USCG...
With all respect, I believe you have misunderstood something here.
If you own a company and that company owns a boat...
Then the true owner of the boat is the company.
And the true owner of that company is you.
There is nothing false or hidden about it.
The very concept of a company or corporation has been invented for this kind of purpose. Some of the earliest corporations in history were formed to own boats, and it is still common practice.
There is nothing wrong about making use of such a structure. It can be a useful tool for the task, just like a boat can be useful for crossing the water.
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Old 04-03-2015, 11:50   #88
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Re: Where do we flag our boat?

Nominee directors? To allow the 51% stockholder, an alien, to federally document a vessel in the US?
And the corporation has no other purpose?


Our IRS calls that a "sham corporation" and once it is discovered, files criminal and conspiracy charges against all parties involved, meanwhile seizing all the assets, like the boat.


This is nothing new.


Now, if the corporate ownership is a bona fide charter company, and their business is actively, independently, full-time keeping the vessel in charter, and they make a profit at that, the alien could still own up to 49% of the corporation (the rest could go to a non-revocable US trust for his daughter) and the alien could still charter it--as long as the charters were at "arm's length" and priced the same as everyone else's. The advantage being, he gets his fees back along with his share of the profits, and the corporation is now a real business, full time hiring out the charter vessel.


None of this will be new to a CPA or EA who is familiar with "vehicles" and the IRS. Private aircraft owners have been doing this for at least 40 years, to defer the costs of their "private" toys. With IRS knowledge and approval, and what the IRS approves, other government agencies tend to follow.
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Old 04-03-2015, 18:35   #89
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Re: Where do we flag our boat?

Regarding 19 CFR 4.3, there is mention of a "note 9." To be precise, the CFRs do not have "notes." Note 9 is an annotation to the CFR made by the person who compiled it, and is not part of the CFR. The note refers to the interpretation of 19 CFR 4.3 which is reflected in a number of CBP rulings. For example:
CROSS Ruling 109537
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Old 04-03-2015, 19:14   #90
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Re: Where do we flag our boat?

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Nominee directors? To allow the 51% stockholder, an alien, to federally document a vessel in the US?
And the corporation has no other purpose?


Our IRS calls that a "sham corporation" and once it is discovered, files criminal and conspiracy charges against all parties involved, meanwhile seizing all the assets, like the boat.


This is nothing new.


Now, if the corporate ownership is a bona fide charter company, and their business is actively, independently, full-time keeping the vessel in charter, and they make a profit at that, the alien could still own up to 49% of the corporation (the rest could go to a non-revocable US trust for his daughter) and the alien could still charter it--as long as the charters were at "arm's length" and priced the same as everyone else's. The advantage being, he gets his fees back along with his share of the profits, and the corporation is now a real business, full time hiring out the charter vessel.


None of this will be new to a CPA or EA who is familiar with "vehicles" and the IRS. Private aircraft owners have been doing this for at least 40 years, to defer the costs of their "private" toys. With IRS knowledge and approval, and what the IRS approves, other government agencies tend to follow.
You are mixing things. We are talking about recreational use; your point on 49/51 ownership is for commercial (charter) use. An "alien" like GW could own 100% of the corporation that owns the boat. Then the "alien" shareholder appoints American CEO and director to meet the rules. Shareholder ticks the box to to have the corporation treated as a disregarded entity for tax purposes (hence no need to worry about the value of the use of the boat because shareholder and corporation are one and teh sam ething for tax purposes given the option) . What does this have to do with sham corporations that serve to create losses, etc?
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