Ask A Maritime Attorney: Can you Clarify? How many passengers can a foreign-built sailing catamaran carry on a charter business in California, given that a MARAD Waiver has been obtained allowing the boat to operate as a charter vessel?

Question:

            I am interested in using my 46-foot sailing catamaran in a charter business in California.   My research into the legal requirements for charter boats led me to one of your old articles in The Log, where you explained that the rules that require a charter boat to be built in the United States may be waived by obtaining a “MARAD Waiver.”  My boat was built in France.  I applied for a Waiver, and today I received a letter from the U.S. Maritime Administration, granting the Waiver.  I was also pleased to read in the letter that the Waiver is good for up to 12 passengers.  This contradicts the information in your article, where you advised that we would only be able to carry six passengers.  Can you clarify?

 

Answer

The United States is one of many nations that protects its domestic transportation industries through “cabotage” laws. These laws require the transportation of passengers or cargo between U.S. ports to be performed aboard boats that are registered and built in the United States.

Cabotage laws apply regardless of how many passengers are being carried aboard the boat, which may be a problem since many sailing yachts in the size range of our reader’s boat are foreign built.  A foreign built vessel may not legally carry passengers for hire in this country unless the owner obtains a waiver of the restriction through to the Small Vessel Waiver Program administered by the United States Maritime Administration (“MARAD”).  Information regarding a waiver is available on MARAD’s web site at http://www.marad.dot.gov (follow the links to the Small Vessel Waiver Program).

Our reader successfully complied with the requirements of the waiver program, and his foreign-built boat may now be used in his charter business.  But he is mistaken about the number of passengers that he may carry on his charters.

A MARAD Waiver will allow a vessel to carry up to 12 passengers for hire, but only if all other legal requirements are met, including (as discussed below) the size of the vessel.  The phrase “passengers for hire” refers to passengers who are paying compensation to the vessel owner for their transportation.  Carriage of passengers for hire requires a vessel owner to obtain a “Coastwise Trade Endorsement” on the vessel’s Certificate of Documentation.  Foreign vessels are ineligible for this endorsement unless they carry a MARAD waiver.

Most vessels that carry passengers for hire in the U.S. are “inspected.”  This does not refer to a safety check conducted by the Coast Guard Auxiliary.  Instead, it refers to a strict set of Coast Guard regulations, a rigorous Coast Guard inspection that addresses constructions standards and safety equipment, and the boats are issued a Certificate of Inspection from the Coast Guard.

An exception to the Coast Guard inspection process is allowed for “Uninspected Passenger Vessels” (“UPV”).  These are vessels that carry six or fewer passengers for hire (often referred to as “six-pack” charters).  The UPV limit is increased to twelve passengers (a “12-pack” charter) if the boat measures more than 100 gross tons, and collectively (these regulations are set forth in 46 C.F.R. sec. 2.01-7).  Referring back to our reader’s case, the MARAD waiver has no effect on the Coast Guard inspection or UPV regulations.  The letter received by our reader highlights this, with a note that “this is not a waiver of any vessel documentation, crewing, or inspection requirements.”

We should close with a warning that vessels that carry passengers for hire in U.S. waters are subject to a very long list of regulations, concerning the boat, the captain or operator, the owners and the waters on which the voyage will take place.  Charter industry licensing and vessel inspection regulations and passenger restrictions vary substantially around the world, and an experienced maritime attorney should be consulted in the jurisdiction in which a particular charter boat will be operating.

 

David Weil is licensed to practice law in the state of California and as such, some of the information provided in this column may not be applicable in a jurisdiction outside of California. Please note also that no two legal situations are alike, and it is impossible to provide accurate legal advice without knowing all the facts of a particular situation. Therefore, the information provided in this column should not be regarded as individual legal advice, and readers should not act upon this information without seeking the opinion of an attorney in their home state.

 

David Weil is the managing attorney at Weil & Associates (www.weilmaritime.com) in Seal Beach. He is certified as a Specialist in Admiralty and Maritime Law by the State Bar of California Board of Legal Specialization and a “Proctor in Admiralty” Member of the Maritime Law Association of the United States, an adjunct professor of Admiralty Law, and former legal counsel to the California Yacht Brokers Association. If you have a maritime law question for Weil, he can be contacted at 562-799-5508, through his website at www.weilmaritime.com,  or via email at dweil@weilmaritime.com.