hi guys welcome back to the channel um i thought i'd do something a little bit different today um
a little bit more informal if you like and i wanted to discuss a topic that comes up a
lot in the questions in the comments section on my youtube channel and it's about the way super
yachts are flagged and why we see so many um British ensign red ensign flags and not
not so many or if any American or united states um flags basically the way
when a yacht when the conception of a yacht is is designed the owner goes to a company and they
they hire an architect to design it or yacht designer whatever you want to call them
and they have to they're governed by rules so you'll often see on on my videos where i'll
mention in the stats of a yacht things like the length more importantly the gross tonnage
and the amount of guests that are allowed and very often you'll see people say well only 12 guests on
a yacht of that size on a 90 meter yacht and you can only have 12 guests well that's because it's
governed by a set of rules for the design and the running of these yachts and it's called the large
commercial yacht code generally there's there's two that they refer to most often is ly2 and ly3
and there's also something called the passenger yacht code which is more recent the guidance is
for right down from the designers to the builders to the owners operators
uh the crews so that so there's an awful lot of uh governing going on so basically the yacht is built
to that code so for instance an ly2 code is for all yachts under 300 gross tons
the ly3 code is for all yachts under 3 000 gross tons anything over 3 000 gross tons
is classed as a commercial vessel so that means that it's governed by commercially the same as any
commercial vessel basically are governed by those different rules and that's one of the reasons why
these yachts are usually 2 900 gross tons or something like that it's because of these laws
if they have more than 12 guests in in the past they would also fall into the commercial code
but what the the yachting authorities have done in the last few years is they brought
out a new code called the passenger yacht code so basically the passenger code is of any size
in pre in private or trade use carrying 13 to 36 passengers and not carrying cargo so one of the
other things you need to take into account is the employees that you have the the type
of qualification your engineers and your deck officers need to have is based on the type of
yacht you're going to work on well let's just take the engineers for now to be able to work
as a chief engineer on a yacht of under 500 gross tons and up to 1500 kilowatts so the power of the
yacht it also comes in it's not just about the gross tonnage it's about the power of the yacht
that the yacht generates um you can you have something called a y4 engineering certificate
now if you want to work on a yacht up to 3 000 gross tons and 3000 kilowatts
then you need to have a y3 then there are two others y2 and y1 they're both based on the power
of the yacht and but the limit of the gross tonnage is the same so up to 3 000 gross tons
uh 6 000 kilowatts you need a y2 and 9000 kilowatts you need a y1 so these these are
engine chief engineers qualifications for your vessels up to 3 000 tons and those power
designations now if you want to work on a yacht over 3 000 gross tons regardless of the power
you need to have something called an engineering office of the watch unlimited and that is uh
it's a it's a bigger job to get that for obvious reasons um because so what you what you often find
is when you go to a yacht of over 3 000 gross tons you'll find yourself very frequently working with
engineers and deck officers who come from the commercial industry so tankers cruise ships all
kinds of different massive vessels and they've got lots of experience on big vessels and they
come to yachting for the same reasons most people do because the pay is very good and the conditions
are very good but you often find that the the slightly older the crew because they've had to
go through that process of a cadet ship so a three-year cadet ship which includes college
and sea time and then they go and they you know they they um work on the tankers for a number of
years so they get that experience and then they come to super yachts that's often the way it goes
if you go onto a vessel under 3000 gross tons you often find that the captain and especially
from my point of view i noticed this because i'm older but you find that the captains and
chief engineers are quite like very young the last vessel i worked on that was under 3000 gross tons
the chief engineer and the captain were only 30 years old so um yeah so that's one of the
things that they have to take into account and obviously uh on the bigger the bigger yachts
the salaries tend to be bigger because those people have more experience uh not necessarily
more experienced they have more qualifications higher qualification and they generally pay more
than the smaller vessels so that's another thing that they have to take into account
when when they decide where they're going to go in terms of size with these shots now
in the in the us um you don't see super yachts of any size except under 300 tons with a us flag on
them and there's a reason for that because in the us these rule obviously the us has its own rules
and they don't they don't abide up until very recently they didn't abide by these same rules
in the u.s they deemed that any vessel over 300 gross tons regardless if it was for recreation
it was classed as a commercial vessel so even if you had a 400 gross ton vessel which is you know
quite small you were governed by the commercial codes which is you know extremely expensive and
very strict so i'll just read a section here from mega news article it says for at least
half a century ridiculous regulations prohibited american citizens from displaying their patriotism
by flying an american flag on their yacht those regulations have now changed
thanks to an amendment passed with bypasses support private u.s flagged super yachts
exceeding 300 gross tons are permissible so basically they what they've done to cut that down
and like i said i'll put a link below for this article is they've basically taken
the steps to make into law it's very similar to the MCA system where vessels over under 3
000 tons will fall into a ly3 a large junk code 3 designation now apparently what's going to happen
next to the us is there's articles from 2018 by the way so but what what what this says in the
article is basically that the they have to go to the coast guard and the coast guard have to create
their own uh set of regulations based on this new law so it's going to take some time however
if you own a yacht in the in the us and it's under 3000 gross tons you can now as long as it's
mca compliant so the maritime coast guard agency which is a British organization as long as it's
mca compliant you can apply for the same status in the us and you can flag it as a u.s vessel
and and and away you go now the laws there are quite strict on the type of crew that you have
to have when you have a u.s flag vessel your crew must be from the u.s so that there are
there are still restrictions in that sense the owners of what they can do and who they
can hire which is still going to limit i think um which owners decide to go down that route because
it's not just about the flag it's about how it's governed and like i said you have to have all u.s
crew on board uh Norwegian cruise lines tried to do this thing with the u.s flagged cruise ships
i don't think it's still going it was a disaster basically because everybody on board had to be
flag had to be a u.s citizen they were it did what they did provoke was because they couldn't
get the crew for these because these vessels had like you know 1200 1500 crew and they couldn't
get the people to stay in the jobs so what they started to do is they could hire somebody who had
paperwork in to apply for us citizenship so they started hiring people from other countries like
especially uh ireland because there's an easy path for people from ireland to get u.s citizenship and
they started to hire all these people and started to put in paperwork for them it was it was a big
mess i i knew uh some people who worked there because i worked for ncl in the past and they were
saying it was a disaster so i don't think i think they may have i'm not sure about this they may
have one other vessel still doing it but um i'm not sure but uh yeah they had three at one point
and anyway um go went off topic a little bit there why do we see so many uh super yachts with
um british jensen well there are different types of british engine and a lot of the um
the british commonwealth the british commonwealth countries and islands they're all entitled to have
a british incident it's called a deface denson so it's a red flag with a with the union flag in the
corner and then they'll have some thing on there that identifies them separately to the uk so a
british flag is just the red ensign with the union flag in the corner and that's it that's blank if
you see that usually that's british flagship there are some instances where cayman island ships fly
that flag i'm not i'm still i asked um i asked the chap who was from the flag state once when we were
being audited and he explained it to me but it didn't make any sense but for for the most part
the british engine is like if it's registered in london or southampton or something like that
you'll have that british flag if it's got a little thing on it then it's from one of the
commonwealth countries i know not all the commonwealth countries have british flags but
that's the general rule so what you'll see is most of the most of the super yachts they're registered
in the cayman islands and there are reasons for this the biggest reason why they do this
is for tax reasons if you want to build your yacht in germany or in netherlands
or wherever you want to build it and you're going to register your vessel as a cayman islands vessel
once your vessel is built you have you have to leave the eu you have to you have to sail out of
the eu otherwise if you if you like if i if my yacht was built and we were in bremerhaven for
instance and then i decided i wanted to go to the uk and we sailed straight to the uk upon arriving
in the uk i would be required not right there and then but because i went to the uk i didn't leave
the eu i would be immediately required to pay all the tax that was due on that vessel now if i if
i instead of doing that if i sail to norway which is very popular from the northern part of germany
um i i leave the eu and now i don't have to pay that tax now i can i can stay there overnight
and then i can sail right back which is what you'll see very often in a lot of these
press reports you'll see uh um you know this vessel's just been launched in germany or in
holland and now it's on its way to norway and that that's the reason why there's no other reason it's
not just that the owner's just decided he wants to go to norway it's because of the tax liability so
uh once uh for and if it's in the south in the mediterranean they'll sell to gibraltar
which now gibraltar is part of the uk commonwealth but they have special stasis tax exemption all the
fuel is very uh is very cheap not cheap but it's very competitive there as well because
they have very good tax laws there so the vessels that leave from this from
the mediterranean area so if they're built in italy or in france or last youtube places like
this they'll sell to gibraltar and then very often they'll turn around and they'll sell back
into the eu now once they've made that stop and they turn around and go back they're free to go
about their business so uh they're not paying all that tax so if you think about a big yacht
you know like eclipse or something like that the the yacht the uh the tax that was owed on
that vessel when it was built was probably like i don't know 60 million euros 80 million euros
so i thought even for a billionaire that's a lot of money main the main reason is uh for tax
reasons also like i said the cayman islands flag and and many of these these flags allow the owner
to employ people from lots of different countries they have um the cayman islands laws are very
relaxed when it comes to that kind of thing so this is where the phrase the flag of convenience
comes from because the owner of the yacht is not from the cayman islands none of the crew are from
the cayman islands uh the vessel is not going to reside in the cayman islands not going to
be docked in the cayman islands it might go there occasionally but it's not going to be
it's just a flag of it's a flag that allows the owner to be very flexible with who he employs
how he employs them how they pay them work you know because all that stuff is all all
tied into the flag the rules of the boat are based on the laws of that place
i will put links below to these articles there are some other articles out there you can google it um
just google uh um super yachts us flag and you'll get lots of different results but i'll put the one
in that i read from because i used it on this video uh if you've got any questions let me
know in the comments below uh tell me what you think about this um it's an interesting subject
i could go i could dive into it very deeply but i just wanted to put that out there uh depending on
the kind of response i get and the questions i get uh i might do a follow-up video but um okay i'm
gonna end it there let me know what you think of this video um what do you think of my riva by the
way this is uh so i can i can actually tell people i have a riva yacht um i don't say how big it is
but it's the river yacht right so i can't get in it but i can look at it the next best thing all
right guys thanks for watching and i hope you enjoyed this please be sure to like uh be sure
to subscribe if you haven't already and uh and look out for more videos to come alright guys bye