United States Ship Registry Requirements
Ship registry service is provided by United States Coast Guard. In United States, ship registry is maintained through the National Ship Documentation Center located in Falling Waters, West Virginia.
United States Coast Guard provides ship registry for commercial ships and those recreational ships like yachts and boats which are voluntarily registered by their owners.
Before 1995, United States Coast Guard maintained ship documentation offices in major inland and coastal ports around the United States.
In the United States, most states maintain ship registration systems for recreational pleasure yachts and boats. State numbering systems must generally comply with the federal ship numbering system in a standard format.
In order to be eligible to be registered and receive Certificate of Documentation by the United States Coast Guard:
– Ship, boat, yacht or vessel must be wholly owned by a United States citizen or company
– Ship, boat, yacht or vessel must be at least 5 net tons.
– Ship, boat, yacht or vessel must not be documented by another country.
United States Coast Guard registered ships do not have to be built in the United States unless they seek to qualify for the domestic trades and benefit from the Jones Act trade. Due to shipbuilding costs, virtually all of the United States flag ships engaged in the United States foreign trade were built outside the United States.
According to United States Coast Guard:
5. Joint Ventures
are eligible to register ships in United States.
For ship registration purposes, a corporation must be incorporated under the laws of the United States or of a state, its chief executive officer by whatever title must be a United States citizen, corporation chairman of BOD (Board of Directors) must be a United States citizen, and no more than a minority of the number of persons necessary to constitute a quorum of the board of directors may be non-United States citizens.
Generally, United States ship registry is considered a national registry, 100% of the stock of a corporation that qualifies as a United States citizen may be owned by non-United States citizens for foreign trades.
For United States Domestic Trade (Jones Act), 100% of the stock of a corporation must be owned by United States citizen. Limited Liability Company (LLC) may register a ship with United States Coast Guard. Limited Liability Company (LLC) must comply with either the general partnership or corporation regulations.
United States-registered ship must employ a United States-citizen crew. United States ship registry has a citizen manning requirement. Each registered ship must have United States citizen licensed officers and no more than 25% of the unlicensed seamen may be non-United States citizens. Non-United States citizen crew members must have Green Card in other words they must be lawful permanent United States residents.
What does the United States Coast Guard require to Register a Ship?
• Applicant must file a ship documentation application on Form CG -1258 that is application for Initial Issue, Exchange or Replacement of Certificate of Documentation; Re-documentation
• Applicant must provide proof of title in the form of a Builder’s Certificate (if the ship is being delivered to the owner by a shipyard), or a Bill of Sale (if the ship is being sold by a prior owner). United States Coast Guard has available simplified forms for a Bill of Sale (Form CG -1350) and for a Builder’s Certificate (Form CG -1261). Document must be notarized.
• Applicant must pay fees, although the United States ship registration fees are generally nominal. Persons registering a ship that will be engaged in foreign trade will also need to obtain a Continuous Synopsis Record (CSR) that sets out certain key information required by the International Ship and Port Facility Security Code (ISPS Code). The required form for the first issue of a Continuous Synopsis Record is Form CG-6039. If a ship already has a Continuous Synopsis Record, the form to amend the Continuous Synopsis Record is Form CG -6038A.
Unlike other ship registries, which typically require a number of Classification Society Certificates and related applications to complete a ship registration, United States Coast Guard will complete a registration with the documents listed above.
However, if a ship is subject to inspection by United States Coast Guard, then immediately after registration, and before the ship can operate, it will need to undergo United States Coast Guard inspection, and either have the required Classification Certificates available beforehand, or obtain equivalent certificates from United States Coast Guard at the conclusion of the inspection.
Ship mortgages are also frequently recorded or released in connection with a ship registration. Electronic Filing is accepted by United States Coast Guard effective October 31, 2007. United States Coast Guard accepts the filing of most documents by facsimile or email as PDF documents without the need to follow up with the filing of the originals.
United States Coast Guard only does not accept electronic filling of Builder’s Certificate. Original Builder’s Certificate must be delivered to United States Coast Guard’s National Ship Documentation Center to complete the initial registration of a ship.
Shipowners may still want to consider a live-filing with the National Ship Documentation Center, to ensure that any issues can be resolved promptly without delay of the transaction, and to provide for the most expeditious receipt of the ship documents.
United States Government has broad discretionary authority to deny permission to a ship to leave the United States registry. Authority to deny re-flagging of a United States registered ship was enacted as section 9 of the Shipping Act, 1916.
Authority to deny re-flagging of a United States registered ship is a national security measure and remains in effect today.
Eligibility for Ship Registration in National Shipping Registers and Criteria for Parties Registering Ships
In the United States, the term ‘vessel’ is broadly defined under Section 3 of Title 1 of the US Code as encompassing all kinds of watercraft or devices that can be used for water transportation. To be eligible for registration with the National Vessel Documentation Centre (NVDC) of the US Coast Guard, a vessel must weigh at least five net tons and not be registered under another country’s laws. It must also be owned by someone who qualifies as a US citizen, a definition that varies based on the type of registry endorsement required for the vessel. For instance, vessels used in US coastwise trade must be predominantly (75%) owned by US citizens and meet other criteria such as being constructed in the US. Vessels meant exclusively for international trade under the US flag, without engaging in trade between US points, need to fulfill certain corporate criteria, like having a US citizen CEO and board, but don’t have a specific citizen ownership threshold.
Ship Registration Procedure and Documentation in the USA
To register a vessel under the US flag, an “application for documentation” (USCG-1258) must be filed with the NVDC. This process also involves providing proof of ownership, construction, tonnage, and dimensions.
Reasons for Refusal of Registration
The US does not impose age restrictions on vessels for registration. As long as all other criteria are met, the NVDC will register the vessel.
Benefits of Registering Under US Flag
Vessels with a US flag and a coastwise registry endorsement are uniquely permitted to transport people or goods for hire between US points. Additionally, they are entitled to certain cargo preferences, including cargoes from the US Agency for International Development and military shipments.
Documenting a Ship’s Nationality Through Registration
Ship registration is akin to assigning a nationality to a ship, much like a passport for an individual, allowing it to engage in international travel as per the permissions granted to its nation’s citizens. According to international agreements, every merchant ship must be affiliated with a specific country, known as its “flag state.” A ship is subject to the laws of its flag state and is often described as sailing “under the flag” of its country of registration.
Regulatory Oversight by Flag States
The flag state has the responsibility to regulate its ships, a mandate enforced through regular inspections, certification of equipment and crew, and the issuance of safety and environmental protection certifications. The entity responsible for registering and ensuring the ship’s compliance is called the “registry,” which can be a governmental entity, a private organization, or, as in the U.S., a combination of both. In the U.S., the government-run registry may delegate inspection duties to a private third party under the Alternative Compliance Program.
Traditional vs. Open Registries
“Traditional” or “national” registries restrict registration to vessels owned by residents or entities of that country. In contrast, “open” registries allow foreign companies and individuals to register under their flag. Vessels under open registries are often referred to as flying under “flags of convenience.”
Purpose of Ship Registration
Historically, ship registration originated to regulate cargo ships in Europe, ensuring local construction and crewing. Today, it serves to officially document ownership, establish nationality for international treaties, and determine territorial access and financial support based on the vessel’s flag. Ships under certain flags may receive different treatment in territorial waters and financial backing due to international relations and financial laws.
Diverse Registration Requirements
International travel by sea necessitates ship registration, although local-only vessels may not require it. Each country has unique registration criteria, often varying by size, purpose, and occupancy of the vessel.
Requirements differ between national (“closed”) and open registries. Closed registries typically mandate national ownership, construction, and partial national crewing, whereas open registries have fewer restrictions, sometimes even offering online registration. Unregistered vessels, like those used for illegal activities, are often targets for naval actions due to their lack of a national flag.