Despite the obstruction caused by SARS-CoV-2, the sailing season is returning to its normal course.
The negative effects of COVID-19 have certainly affected this year's number of entities carrying out "legalization" of purchased vessels. This specific period has seen problems with the execution of orders by shipyards, problems with the transport of ordered vessels (especially from abroad), troublesome changes in the operation of public agencies and, of course, a ban on sailing.
However, it turns out that the epidemic has not been the only contributor to the remarkable confusion among sailing enthusiasts.
We are now facing a major change in the law relating to the registration of vessels.
Specifically, this is the ‘Act of 12 April 2020 on the registration of yachts and other vessels up to 24 m in length’.
This regulation was originally intended to enter into force at the beginning of 2020, but the deadline was finally postponed until 1 August 2020.
As a result, in just over a month and in the middle of the sailing season, we will be faced with the introduction of a new law!
Instead of quickly taking care of formal and administrative matters related to launching their new vessels, yacht operators are forced to consider whether this is the optimal time for the registration procedure or whether it would be more appropriate to wait for the new law to enter into force first.
However, while uncertainty about new rules always seems to be a major challenge, the proposed regulations to apply from 1 August 2020 should significantly facilitate the registration of yachts and other vessels.
Therefore, waiting may be a good idea, as long as, of course, the system starts effectively on 1 August 2020.
Those interested in yachting are familiar with the commonplace practice of Polish operators and owners transferring their yachts to foreign registries.
The new regulations are exactly intended to stop this process, while additionally encouraging both Polish and foreign owners or operators to transfer their yachts to the Polish registry.
These circumstances should make the so-called "Polish flag" more attractive to offshore yacht operators.
OBLIGATION TO REGISTER YACHTS
Under the new law, yachts (both offshore and inland) with a length of more than 7,5 m or motor-driven boats with an engine power of more than 15 kW not exceeding 24 m (or vessels used for sailing outside the territory of the Republic of Poland) are subject to registration.
However, the following will not be subject to registration:
(1) vessels exclusively intended for regattas and sports competitions, having a rating class and a valid certificate issued by a Polish sporting association or a competent body in the flag state of the yacht, as well as rowing racing boats;
(2) vessels propelled exclusively by human power;
(3) surfboards, windsurf boards or other similar craft.
The rule is that the registration is obligatory for a ship that is Polish property, that is to say a ship (within the meaning of the Act a yacht is also a ship) that:
1) is at least half-owned by a legal person established in Poland or a Polish national residing in Poland, if the operator of that vessel has their domicile or principal or branch establishment in Poland and the ship, at the request of all the joint owners, has been entered in the permanent registry ledger of the Polish registry of ships;
2) is owned by a corporate entity established abroad in which a legal person established in Poland or a Polish national residing in Poland holds a participation if the operator of that ship is domiciled or has his principal or branch establishment in Poland and the ship, at the request of the owner, has been entered in the permanent registry ledger of the Polish registry of ships;
A ship owned by a citizen of an EU Member State or a legal person established in an EU Member State may also be entered in the Polish registry, with the reservation that the following ships are also considered to be such ships:
1) a ship that is at least half-owned by a legal person established in an EU Member State or an EU Member State national, if the operator of that ship has their domicile or principal or branch establishment in an EU Member State and the ship, at the request of all the joint owners, has been entered in the permanent registry ledger of the Polish registry of ships;
2) a ship that is owned by a corporate entity established abroad in which a legal person established in an EU Member State or an EU Member State national holds a participation if the operator of that ship is domiciled or has his principal or branch establishment in an EU Member State and the ship, at the request of the owner, has been entered in the permanent registry ledger of the Polish registry of ships.
AUTHORITIES RESPONSIBLE FOR REGISTERING YACHTS
To date, depending on the dimension and purpose criteria, vessels in Poland have been registered with a sports association, an admiralty court or a maritime office.
The thing is, however, that it has been quite a challenge to select the appropriate authority for such registration.
Now, the new law only establishes two types of registration bodies authorities.
1) the starost,
2) the relevant Polish sports association (e.g. The Polish Yachting Association).
This means that from 1 August 2020 onwards, a yacht used for sports or leisure purposes not exceeding 24 meters in length will be subject to registration with a sports association or a starost office.
This wording of the new rules no longer requires a time-consuming legal interpretation.
This will also be a particular facilitation for foreign vessel operators or owners who under the new law have been given the possibility to register their craft under the Polish flag.
The data entered in the general registry by either of the registration authorities will then be administered by the Director of the Maritime Office in Szczecin, who will be responsible for running the general registry of yachts.
It is worth adding, though, that a yacht exceeding 24 m in length, or one whose owner wants to use to establish a mortgage on, will still be subject to registration with an admiralty court.
YACHT REGISTRATION FEES AND DEADLINES
As from 1 August 2020, a new fee tariff for administrative procedures before yacht registration authorities will apply. According to the Act on the registration of yachts and other vessels up to 24 m in length and its implementing acts, the fee for:
1) the registration and issue of the registration document,
2) an amendment to the registered data and the issue of the registration document,
3) the issue of a duplicate of the registration document,
will be PLN 80 (approx. EUR 18).
4) the issue of a certified copy of or extract from the registry of yachts, will be PLN 15 (approx. EUR 3.36).
The registration authority shall record the vessel in the registry or decide not to register the vessel within 30 days. This period will run from the date of the submission of the complete application for registration.
VALIDITY OF THE EXISTING REGISTRY ENTRIES
Registry entries and registration documents issued under the existing rules will remain valid, but unfortunately only for a limited period of time.
The legislator has assumed the following qualification:
- registry entries made and documents issued by 1 January 2000 - for a period of 12 months from the date of entry into force of the Act, i.e. until 1 august 2021
- registry entries and documents issued before 1 January 2006 - for a period of 18 months from the date of entry into force of the Act, i.e. until 1 February 2022
- registry entries and documents issued after 1 January 2006 - for a period of 30 months from the date of entry into force of the Act, i.e. until 1 February 2023
After these deadlines expire, the owner of each craft registered under the existing legislation shall be obliged to re-register it under the new rules.
However, the owner of a vessel which has not been subject to registration under the existing legislation will now be required to register it within 17 months of the date of entry into force of the Act.
Therefore, caution must be exercised as no automatic registration is envisaged, requiring us to remember to re-register each unit!
A full analysis of all the changes goes beyond the framework of this publication, but it basically appears that the new regulations, by providing administrative simplifications and maintaining fees at a very reasonable (as for European standards) level, should make the "Polish flag" more attractive also to foreign vessel operators and owners.
The changes planned by the Polish legislator are valuable due to the centralization of the registry and its extensive cooperation with external entities. This will certainly improve the safety of the legal system and of sailing itself.
We will continue to return to the subject of the new yacht registration rules in the coming weeks.
Tomasz Wiśniewski, Patryk Zbroja
Kancelaria Zbroja Adwokaci