VAT, Flag and residency issues

[boatman61]

You can avoid the VAT if you state it is for export to a non EU country (UK SSR).
The only thing is you'll have to take her out of the EU... Caribbean is nice this time of year..

[goboatingnow]

Originally Posted by boatman61

You can avoid the VAT if you state it is for export to a non EU country (UK SSR).

The only thing is you'll have to take her out of the EU... Caribbean is nice this time of year..

You can’t unless the seller is vat registered already.

The boat has an expired TIP. It is deemed imported, any export time allowance ( 30 days) has long passed. I know a large super yacht in court at present in the Balearics over an expired TIP.( the VAT Bill is 3 million !)

The legal situation is the vat situation must be regularised, the buyer is not the one that regularises it.

[boatman61]

Originally Posted by goboatingnow

You can’t unless the seller is vat registered already.

The boat has an expired TIP. It is deemed imported, any export time allowance ( 30 days) has long passed. I know a large super yacht in court at present in the Balearics over an expired TIP.( the VAT Bill is 3 million !)

The legal situation is the vat situation must be regularised, the buyer is not the one that regularises it.

Then he has no worries.. owner won't pay.. don't buy the boat, simple.

[Montanan]

[QUOTE=goboatingnow;3549156]
By the way boats don’t have a nationality like a person. The term has no meaning , a boat with a National registration marking merely proclaims its registry. It is subject to all the laws of the country it resides in not its flag of registry. ( comity usually applies of course )[/QUOTE]

FYI:

THE UNITED NATIONS CONVENTION ON CONDITIONS FOR REGISTRATION OF SHIPS

Article 1

General provisions

1. Every State, whether coastal or land-locked, has the right to sail ships flying its flag on the high seas.
2. Ships have the nationality of the State whose flag they are entitled to fly.
3. Ships shall sail under the flag of one State only.
4. No ships shall be entered in the registers of ships of two or more States at a time, subject to the provisions of paragraphs 4 and 5 of article 11 and to article 12.
5. 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.



UNCLOS III The 1982 United Nations Convention on the Laws of the Sea (UNCLOS) is an international agreement that resulted from the third UN Conference on the Law of Sea (UNCLOS III).

This convention came into force as ratification of an earlier United Nations convention i.e. the Geneva Convention of 1958. (UN.Org 2012). The rights and responsibilities of the nations in their use of world’s oceans and managing marine resources, the freedom of Navigation, the concept of flag states and its responsibilities are amongst the important features of the convention. It enshrines the notion that all problems of the ocean space are closely interrelated and needs to be addressed as a whole. “Possibly the most significant legal instrument of this century” is how the UN secretary general described the treaty after its signing. (UN.Org 2012).

Turning to the concept of flag states, there are many definitions of Flag state, Art. 91 of UNCLOS defines it as “the State in whose territory a ship is registered”. Under international law, for a ship to sail on the high sea, it must be registered to a state, conferred with nationality of that state and fly the flag of not more than one state. A sovereign state that confers a ship with nationality and authorizes it to fly its flag is what is referred to as a flag state. Ascribing nationality to ships is one of the most important means by which public order is maintained at sea, as well as indicating what rights a ship enjoys and what obligations it is subject to. Nationality also indicates which state is responsible in international law for a vessel on the high sea. (Churchill and Lowe 1999, pp. 257). Reference could be made to the statement of the court in the case; US v. JHO (2008) "The law of the flag doctrine.... Provides that a merchant ship is part of the territory of the country whose flag she flies and that actions aboard are subject to the laws of the flag state...”

[goboatingnow]

Note the term “ merchant ship”

[goboatingnow]

A note cruiser friendly interpretation is here https://www.rya.org.uk/knowledge/abr...-coastal-state

My point was to do with the OPs description of the boat sitting on the hard as “ stateless “ she is nothing of the sort. The boat lies fully within the National jurisdiction of the country where she is lying . To suggest simply by registration she has a nationality ( or doesn’t have nationality ) that supersedes the situation she is in is to misunderstand the situation

She is not stateless, a boat in the hard can’t be stateless.

I should add that the paragraph quoted about ships nationality is referenced under the HIGH SEAS section of UNCLOS. The vessel in question is most definitely not on the high seas. The purpose of flag registration on the high seas is to ensure that ships cannot exempt themselves from all laws.

[Montanan]

FYI, as to the implications of Flag State and the imposition of nationality and thus jurisdiction to a vessel.

Jurisdiction Over Vessels
Prescriptive (or “law-making”) jurisdiction is the authority to make and apply laws. International law permits a State to exercise varying degrees of jurisdiction over its flagged vessels, vessels within its ports, and vessels within its maritime zones (including its internal waters, territorial sea, contiguous zone, and exclusive economic zone). These exercises of jurisdiction are derived from principles which are recognized as customary international law. The exercise of jurisdiction in each instance is also recognized under the Law of the Sea Convention (LOSC).

Flag State Jurisdiction
A State may exercise jurisdiction over a vessel that is registered with the State and flying its flag. This exercise of jurisdiction is based on the internationally recognized principle that a State may regulate the conduct of its nationals even when those nationals are acting outside of the State’s territory. See The Apollon, 22 U.S. (9 Wheat.) 362, 370 (1824) (“The laws of no nation can justly extend beyond its own territories, except so far as regards its own citizens.”). Because flag state jurisdiction depends on the nationality of the vessel, it may be exercised upon the high seas and within the waters over which a foreign State exercises jurisdiction.

The granting of nationality to a ship is a matter within the exclusive jurisdiction of the State concerned. See M/V Saiga (No.2) Case (St. Vincent and the Grenadines v. Guinea), ITLOS, Judgement of 4 Dec. 1999, Case No. 1. Therefore, it is up to that State to regulate by its domestic law the conditions for the grant of nationality. Once a grant of nationality has been made, a ship may not sail under a different flag unless it has been sold or the owner changes its registry. See United States v. Marino-Garcia, 679 F.2d 1373, 1378 n. 3 (11th Cir.1982) (“A vessel will be deemed stateless where it sails under the authority of two or more States and uses them according to convenience.”).
Articles 91 and 94 of the LOSC reflect the exercise of flag state jurisdiction under the Law of the Sea. Article 91(1) provides that “[s]hips have the nationality of the State whose flag they are entitled to fly.” Article 94(4) affirms that “[e]very State shall effectively exercise its jurisdiction and control in administrative, technical and social matters over ships flying its flag.” In addition, Article 92(1) clarifies that flag state jurisdiction is exclusive, unless jurisdiction is provided for elsewhere in the LOSC, or in another international treaty.

Port State Jurisdiction
A State may exercise jurisdiction over foreign flagged merchant vessels within its ports and internal waters. Cunard S.S. Co. v. Mellon, 262 U.S. 100, 124 (1923); Benz v. Companie Naviera Hidalgo, S.A. 353 U.S. 138, 142 (1957); Spector v. Norwegian Cruise Line Ltd., 545 U.S. 119, 130-31 (2005); United States Department of State, “Immunity of Uruguayan Oil Tanker Presidente Rivera” (July 13, 1989). This exercise of jurisdiction derives from the principle of territoriality, which is recognized as customary international law. See The Schooner Exchange v. McFaddon, 11 U.S. (7 Cranch) 116, 136 (1812) (“The jurisdiction of a nation within its own territory is necessarily exclusive and absolute.”). Territoriality gives a State exclusive authority to regulate persons within its borders. The exercise of this type of jurisdiction is dependent on the location of the conduct. So long as the conduct regulated falls within the territory of the State, it has jurisdiction. Thus a State may apply its laws to foreign flagged merchant ships while they are within its ports and internal waters, which are considered part of its territory. Restatement (Third) of Foreign Relations Law § 512, comment h (1987).

While port state jurisdiction over foreign commercial ships is recognized as customary international law, port state jurisdiction does not extend to vessels owned or operated by a foreign state, except when they are used for commercial purposes. See The Schooner Exchange v. McFaddon, 11 U.S. (7 Cranch) 116 (1812); the Foreign Sovereign Immunities Act, 28 U.S.C. § 1605(a)(2). Although foreign government ships operated for non-commercial purposes are required to comply with a State’s laws while within its ports and internal waters, they are immune from inspection, arrest, or seizure by authorities of nations other than the flag state. See The “Ara Libertad” Case (Argentina v. Ghana), ITLOS, Order of 12 Dec. 2012, Case No. 20 (holding that “in accordance with general international law, a warship enjoys immunity, including in internal waters” (¶ 95).) This is reflected in the Law of the Sea Convention (LOSC) Articles 32, 96, and 236 which provide immunity for government ships exclusively on non-commercial service.

The LOSC recognizes port state jurisdiction in Articles 25, 218, 219, and 220. Under Article 25(2) of the LOSC, “[i]n the case of ships proceeding to internal waters or a call at a port facility outside internal waters, the coastal State also has the right to take the necessary steps to prevent any breach of the conditions to which admission of those ships to internal waters or such a call is subject.” LOSC Article 218(1) also permits a State to investigate and institute proceedings with respect to pollution from a vessel when it is voluntarily within a port of the State.

Coastal State Jurisdiction in Zones of Adjacent Sea
A coastal State’s jurisdiction is different in the several zones of adjacent sea. See Restatement (Third) of Foreign Relations Law §§ 511-15 (1987). These zones may extend up to 200 nautical miles from the State’s baseline. See Maritime Zones and Boundaries. A State’s jurisdiction over the activities of vessels in its zones of adjacent sea diminishes as the distance from shore increases.

Territorial Sea
A State exercises almost complete sovereignty in its territorial sea, similar to that which it possesses over its land, internal waters, and ports. See Restatement (Third) of Foreign Relations Law § 512 (1987). This exercise of jurisdiction, like port state jurisdiction, is derived from the international law principle of territoriality, which gives a State exclusive authority to regulate persons within its borders. See The Schooner Exchange v. McFaddon, 11 U.S. (7 Cranch) 116, 136 (1812). Thus a State has jurisdiction over all persons and vessels in its territorial sea, without regard to the person's nationality or the vessel's flag. Cunard S.S. Co. v. Mellon, 262 U.S. 100, 124 (1923). While this includes foreign government ships operated for non-commercial purposes, a failure of compliance by such vessels is subject only to diplomatic complaint or to coastal State orders to leave its territorial sea immediately. In addition, under the doctrine of hot pursuit a coastal State may stop, inspect, and seize a foreign merchant vessel attempting to leave its territorial sea when it has good reason to suspect that the vessel has violated its laws. See Gillam v. United States, 27 F.2d 296, 298 (4th Cir. 1928).

The main limitation on a State’s sovereignty in its territorial sea is the right of innocent passage for foreign vessels. The right of innocent passage allows a foreign vessel to transit through the territorial sea of a coastal State unhindered, so long as its passage is not prejudicial to the “peace, good order, or security of the coastal State.” See Restatement (Third) of Foreign Relations Law § 513 (1987). The right of innocent passage has long been recognized as customary international law. See, e.g., Corfu Channel case (UK/Albania), I.C.J. Reports 1949 p.28; U.S. V. Louisiana, 394 U.S. 11, 22 (1969). It prevents a State from hindering the passage of a foreign vessel through its territorial sea and from adopting measures to the same effect. See Restatement (Third) of Foreign Relations Law § 513 Comment b. (1987). Still, a State may adopt some measures to protect against passage through its territorial sea that is not innocent, including regulations relating to navigational safety and the prevention of pollution. See LOSC Article 21; Restatement (Third) of Foreign Relations Law § 513(2)(b) (1987).

The LOSC recognizes coastal state sovereignty over the territorial sea in Article 2(1), which states, “The sovereignty of a coastal State extends, beyond its land territory and internal waters…to an adjacent belt of sea, described as the territorial sea.” The LOSC also codifies the right of innocent passage in Article 17, which affirms that “all States, whether coastal or land-locked, enjoy the right of innocent through the territorial sea.” LOSC Articles 18-26, 37-44, and 53 provide the measures that coastal States may adopt to prevent passage that is not innocent within their territorial sea.

Additionally, Article 27(2) provides that a foreign ship passing through a coastal State’s territorial sea after leaving its internal waters is not accorded the right of innocent passage and may be stopped by the coastal State. A coastal State’s right of hot pursuit of a foreign merchant vessel leaving its territorial sea is set forth in LOSC Article 111.

Contiguous Zone
A coastal State has limited authority in its contiguous zone. It may only apply and enforce specific national laws relating to customs, taxes, immigration, and sanitation within its contiguous zone. See Restatement (Third) of Foreign Relations Law § 513 comment f. (The U.S. is of the view that such national laws include environmental laws. See., e.g., Vice-President Al Gore, "Extension of Federal Enforcement Zone in U.S. Coastal Waters Will Help Prevent Violations of Environmental, Customs, or Immigration Laws"(Sept. 2, 1999)). This limited jurisdiction is likely derived from the protective principle, which is recognized under international law. See United States v. Zehe, 601 F. Supp. 196 (D. Mass. 1985) (holding that under international law, a State can punish criminal acts that threaten national security or directly obstruct governmental functions even if committed outside its territory by persons who are not its citizens). The protective principle provides for jurisdiction over certain conduct outside of a State’s territory that threatens its security. See Restatement (Third) of Foreign Relations Law § 402(3).

The right of hot pursuit also permits a coastal State to stop a foreign merchant vessel attempting to leave its contiguous zone when it has good reason to suspect that the vessel has violated its laws that apply within that zone. See Restatement (Third) of Foreign Relations Law § 513 comment g. In addition, because the contiguous zone is a part of the EEZ, a coastal State has the same sovereign rights in its contiguous zone as in its EEZ, including the authority to regulate economic activities (see below).

A coastal State’s limited authority within its contiguous zone is reflected in Article 33 of the LOSC, which states that within its contiguous zone a “coastal State may exercise the control necessary to… prevent infringement of its customs, fiscal, immigration or sanitary laws and regulations within its territory or territorial sea.” In addition, LOSC Article 303(2) protects archaeological and historical objects found within a State’s contiguous zone by establishing the presumption that their removal without the State’s approval would violate its laws within its territorial sea.

Exclusive Economic Zone
A coastal State has sovereign rights to the management of natural resources and other economic activities within its Exclusive Economic Zone (EEZ). See Restatement (Third) of Foreign Relations Law § 514. It does not have sovereignty within its EEZ, so foreign vessels possess the same non-economic rights within a State’s EEZ as on the high seas. This type of limited jurisdiction is likely derived from the effects principle, which is a basis for exercising jurisdiction over an activity outside of the State, but having a substantial effect within its territory. See Restatement (Third) of Foreign Relations Law § 402(1)(c). This basis of jurisdiction is recognized under international law. See The S.S. Lotus Case (France/Turkey), P.C.I.J. Ser. A, No. 10, p. 4 (1927) (holding that international law permitted a Turkish court to exercise jurisdiction over the captain of a French ship, which had collided with and sank a Turkish ship on the high seas); U.S. v. F/V Taiyo Maru, 395 F. Supp. 413 (D. Maine 1975).

The right of hot pursuit permits a coastal State to stop a foreign merchant vessel attempting to leave its EEZ when it has good reason to suspect that the vessel has violated its laws that apply within that zone. See Restatement (Third) of Foreign Relations Law § 513 comment g. The uninterrupted pursuit may continue on the high seas and within the EEZs of other states, as long as the pursued vessel does not enter the territorial sea of another coastal State. See Restatement § 513 comment g.

Article 56 of the LOSC recognizes a coastal State’s sovereign rights for the purpose of exploring, exploiting, conserving, and managing the natural resources within its EEZ. A coastal State also has sovereign rights to engage in other activities, such as the production of energy from the water, currents, and winds. The rights of other states to non-economic uses of a coastal State’s EEZ are reflected in Article 58. The LOSC also provides in Article 246 that a coastal state has the authority to regulate marine scientific research within its EEZ, but that the state should normally grant consent for research to be carried out by another state, unless the research has direct significance for the exploration of economic resources in the zone. And LOSC Article 210(5) specifies that dumping in the EEZ may not be carried out with the express prior approval of the coastal State. “Dumping” is defined in LOSC Article 1(5) to mean the deliberate disposal of wastes or other matter from vessels as well as the deliberate disposal of the vessel itself. “Dumping” does not, however, include the disposal of wastes or other matter incidental to, or derived from the normal operations of vessels.

https://www.gc.noaa.gov/gcil_jurisdiction.html

[goboatingnow]

People quoting long pieces of boilerplate text miss the whole point

A vessel lying in national waters or more so on the hard , is NOT stateless the moniker has no meaning. It’s conflating a persons status. People are legal entities , a boat is a “ goods”

UNCLOS has been widely abused no more then under Covid with nations widely making up new rules. The US never even ratified it.

The fact remains.

A pleasure vessel within national waters is subject to the national rules of the state it is in. Of course most nations practice comity , but they may modify that and many do.

You do not enjoy diplomatic immunity on your flag state boat. You and your boat are subject to national law of the territorial waters of the state you are in ( you can argue that with a French gunboat anytime you like )

UNCLOS has long been either ignored or abused by major powers anyway.

The point is the OP boat he mentioned isn’t “ stateless “. It’s status under its previous registration is not any impediment to its sale ( lots of other things are )

[HarmenR]

Thank you all for your comments. It's been most helpful.

As I understand it now, the VAT and CE need to be sorted by the current owner first, as she has overstayed the TIP, before she can be sold.

Once that is sorted, she'll have VAT paid and CE status and there should be no worries about moving around the EU.

Registering her could then be done in Poland, Holland, Malta or anywhere I like in the EU.

As it stands the whole admin/import procedure will probably take eons, and I'll most likely have to walk away from her. Real shame!

Still haven't had a response from the broker as the VAT clearly is an issue....

[goboatingnow]

Yes a quiet broker usually means he’s trying to find an idiot that won’t ask questions, you’d be stunned how many people don’t ask the obvious questions.