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.