A cruising licence, normally valid for one year, is obtained from U.S. Customs and Border Protection at the first port of arrival in the U.S. and exempts pleasure boats of certain countries from having to undergo formal entry and clearance procedures. Currently, boats under a cruising licence, while in U.S. waters, are forbidden to offer their boats for sale to U.S. residents until the boat is imported and duty is paid on the appraised value. Only U.S. residents are prohibited from viewing these boats while in U.S. waters.
FYBA believes that a less restrictive cruising licence, which allows used foreign flagged boats to be offered for sale to U.S. residents while in U.S. waters would "benefit American marine industry workers and generate additional state and federal tax revenue”. Furthermore, removing the restriction to offer for sale “will encourage more used foreign-flagged vessels to visit the U.S., offering their vessels for sale creating well-paying American jobs”. FYBA is also recommending that importation and payment of duty for used foreign flagged boats is collected the day a boat is sold, rather than the day it is offered for sale.
“Removing these kinds of barriers to commerce is exactly what we need to be doing to encourage boats to come to the U.S. and engage in business here,” explains Jeff Erdmann, FYBA spokesman. “The legislation discourages foreign-flagged yachts from coming over to the States. We have talked to a number of owners who are reluctant to bring their boats here if they can’t offer them for sale without paying the tax before they offer it.”
And not only is the legislation discouraging boats from coming to the U.S., it is also putting Americans off from buying foreign-flagged yachts. “Because they can’t be shown the boat while it is sitting in U.S. waters, so they then have to make arrangements to somehow convince the owner that they are willing and able buyers for a similar boat,” adds Erdmann. “They then have to encourage the owner to spend the time, money and effort to transition the boat over to the Bahamas for them even to look at the boat and they still don’t know for sure whether the buyer would actually want the boat.”
Another difficulty Erdmann points out is for brokers who are representing the client, “because if in fact it is offered to a U.S. resident while it is here, it’s in violation of the law and the boat can be seized”.
“Removing these kinds of barriers to commerce is exactly what we need to be doing to encourage boats to come to the U.S. and engage in business here."
But what stage is the initiative at? “We have delivered the proposal to congress and it is currently being vetted in Washington D.C.,” Erdmann says. “With the new Congress in place, we are anticipating that there will be a desire to pass some good trade bills. During the last State of the Union Address last January, Barack Obama told Congress that he wanted to see a trade bill on his desk that he could sign but at that time Harry Reid was Senate majority leader and did not even propose a trade bill let alone pass one. Now we have Mitch McConnnell as the new Senate majority leader next January, we fully anticipate they will want to pass legislation to improve their image with the U.S. voters and then ultimately be able to take over The White House in 2016 if they look really good.
The association remains optimistic and Erdmann estimates that, if all goes ahead as hoped, they will be looking at the first half of 2016 when they may see a trade bill pass with the FYBA initiative on it. “I think that with the new Congress and with Barack Obama wanting to finish his term on a positive note, they will want to see some legislation passed that U.S. voters can enjoy and support.”