LEGAL
“The structure perspective remains important. VAT-structures, commercial use and Temporary Admission remain topics that are often asked for. Moreover, domestic taxes like the Spanish ITP and clearing boats used under Temporary Admission becomes an often asked question for closings of second hand boats.
“The classical closing in ‘international waters’ may turn out to be ineffective and cause respective discussions/issues with the Custom Authorities. In any event we experience that Custom Authorities not only become more strict but also have a very ‘open eye’ of what is going on in their area of competency. We had a yacht stopped in the middle of the night between the Balearic Islands as the Authorities thought that a closing took place in International Waters beforehand (which was not the case and not the intention). The consequences probably would have been severe if indeed the authorities would have found a Protocol of Delivery and Acceptance and issued Bill of Sale on board evidencing that a transfer of ownership just took place.” Malinowski continues with a warning and a valid reason for getting professional advice, “We still see many suggestions for closing locations in the market for VAT-paid boats, which would immediately forfeit the status of the boat being in free circulation. Consequently, there are many factors (documentation, location, etc) to be determined and coordinated before performing a closing.”
In this buoyant market Partner at HFW Andrew Charlier adds, “From a sale and purchase perspective it is noticeable that buyers are increasingly looking to protect themselves in a seller’s market with limited inventory and competing buyers – binding Letter of Intent (LOI), exclusivity arrangements etc. We recently saw a buyer offer a small non-refundable deposit/payment in return for full right of rejection after survey.”
A niche area of uncertainty but one that has certainly been on the rise in the past year has been that surrounding crypto-currency. Bulfin elaborates, “In the past year we have seen a noticeable increase in queries concerning crypto in the context of yacht sale and purchase and construction. Recent fluctuations have reignited the scepticism many feel towards crypto, but we are certainly seeing a growth in well diversified crypto investors who are now serious players in the superyacht ownership and charter scene.”
Of course it is not just owners that are looking for representation and advice, many others within the industry reach out for assistance and legal advice. Partner at Gordon S. Blair Mousny, explains, “While dealing with captains of yachts, being employees of the owner or of a yacht management company, the issues at stake mainly deal with labour and social security scheme matters. We also accompany yacht brokerage companies by organising and planning the legal structure of their involvement both in terms of commissioning and in the scope of tasks and responsibilities. As such, they also are seeking advice in the perspective of assisting them in the context of the harmonisation of the yacht industry practice, which now mainly relies on the influence held by the Mediterranean Yacht Broker Association (MYBA) in the yacht industry.”
Staying with brokers, Bulfin says, “Queries from brokers are typically, and understandably, focussed around the shape of a potential deal. Although we often also hear from brokers looking to iron out issues between, for example, charterers and owners where there is a disagreement that can’t be immediately resolved between the parties.”
BARGATE MURRAY Bargate Murray is an internationally renowned luxury asset law firm with particular expertise in superyachts. They provide full service legal support to the yachting industry, acting for clients worldwide including the owners of some of the world’s largest and most iconic superyachts, leading shipyards and other key industry service providers. The yacht team advises on legal issues including yacht finance, ownership structures, construction, sale and purchase, insurance, operations and management, refit, crewing and much more. They also have extensive experience in dispute resolution. In recent years the firm’s litigation experts have handled a variety of contentious superyacht issues including warranty disputes, sale and purchase disputes, charter disputes, contentious tax matters and cyber-crime. With their headquarters in Mayfair, London, and a global network of trusted correspondent lawyers, Bargate Murray are widely considered to be among the world’s leading superyacht legal advisors. For more details Tel: +44 (0)207 7375 1393 or visit
www.bargatemurray.com
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