Issue 13 of The Superyacht Owner takes a look at the details surrounding cash allowances on board superyachts – a complex and important topic to understand should a yacht, its owner and its crew wish to stay clear of additional customs inspections or detainment. Here, Hill Robinson financial director Ian Petts takes the discussion further and explains some additional factors for consideration.
When it comes to cash allowances, Petts acknowledges that being aware of the laws on cash limits on board is less of an issue than many believe; the issue at hand is practical application. “The difficulty arises since the limit is per crewmember, passenger and guest, and it covers all notes and coins in every currency. Therefore monitoring the amount on board is difficult and would need converting to a euro equivalent regularly – a time-consuming and difficult process.”
Petts is confident in attributing the use of an Imprest system whereby the value of receipts and cash always equals that of the float. “It is easy to check at any moment in time the balances and they will always be below the limit,” explains Petts. “A spot check can be done at any time and it’s recommended the captain or chief stewardess checks floats and cross-check each other’s floats each month. The management company should check each time they visit the vessel, too.”
The process of monitoring on-board cash allowances can be significantly eased if there is an understanding of the best times to use cash – in short, not very often at all. “There are actually very few instances where paying cash is better than a wire transfer, credit card payment or debit card payment,” says Petts. “It’s best to reduce the cash needed on board using pre-paid cards. Also, if the yacht stays in one place, set up credit terms with key suppliers and get the management company to do the work of paying and negotiating discount terms for you. Similarly, set up fuel cards and toll cards if you are in Europe.”
With the introduction of the Maritime Labour Convention, 2006 (MLC), dealings with crew are expected to be above board and Petts is keen to emphasise that payment of crew wages, which in the past has been known to occur cash-in-hand, should be cash-free and done via wire transfer or payslips.
It is the captain’s responsibility to ensure all on-board operations are undertaken in the correct manner – morally and legally – but it is paramount that owners, too, understand the factors surrounding the topic of on-board cash allowances and the consequent penalties should the amounts not be declared and managed correctly. Undeclared cash can see yachts being detained and confiscated by customs officers and, worse, depending on the circumstances, paying in cash can be counted as a bribe, whereby owners and yachts find themselves in the territory of the Bribery Act.
More information on cash allowances on board superyachts can be found in issue 13 of The Superyacht Owner, in ‘Preparing to declare’.
When it comes to cash allowances, Petts acknowledges that being aware of the laws on cash limits on board is less of an issue than many believe; the issue at hand is practical application. “The difficulty arises since the limit is per crewmember, passenger and guest, and it covers all notes and coins in every currency. Therefore monitoring the amount on board is difficult and would need converting to a euro equivalent regularly – a time-consuming and difficult process.”
Petts is confident in attributing the use of an Imprest system whereby the value of receipts and cash always equals that of the float. “It is easy to check at any moment in time the balances and they will always be below the limit,” explains Petts. “A spot check can be done at any time and it’s recommended the captain or chief stewardess checks floats and cross-check each other’s floats each month. The management company should check each time they visit the vessel, too.”
The process of monitoring on-board cash allowances can be significantly eased if there is an understanding of the best times to use cash – in short, not very often at all. “There are actually very few instances where paying cash is better than a wire transfer, credit card payment or debit card payment,” says Petts. “It’s best to reduce the cash needed on board using pre-paid cards. Also, if the yacht stays in one place, set up credit terms with key suppliers and get the management company to do the work of paying and negotiating discount terms for you. Similarly, set up fuel cards and toll cards if you are in Europe.”
"There are actually very few instances where paying cash is better than a
wire transfer, credit card payment or debit card payment."
-Ian Petts, financial director, Hill Robinson
-Ian Petts, financial director, Hill Robinson
With the introduction of the Maritime Labour Convention, 2006 (MLC), dealings with crew are expected to be above board and Petts is keen to emphasise that payment of crew wages, which in the past has been known to occur cash-in-hand, should be cash-free and done via wire transfer or payslips.
It is the captain’s responsibility to ensure all on-board operations are undertaken in the correct manner – morally and legally – but it is paramount that owners, too, understand the factors surrounding the topic of on-board cash allowances and the consequent penalties should the amounts not be declared and managed correctly. Undeclared cash can see yachts being detained and confiscated by customs officers and, worse, depending on the circumstances, paying in cash can be counted as a bribe, whereby owners and yachts find themselves in the territory of the Bribery Act.
More information on cash allowances on board superyachts can be found in issue 13 of The Superyacht Owner, in ‘Preparing to declare’.
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