Commercial Chartering of Superyachts in Australia
With the America’s Cup on the 2021 calendar, in spite of everything that has happened in the world over the last 6 months, many superyacht owners are still intending to travel to the South Pacific for the event in Auckland. This is great news for the industry in New Zealand and Australia, as the vessels are likely to transit, and/or visit Australian ports. It is therefore appropriate to outline the ways in which superyachts, whether private or commercial, can operate in Australian waters.
Foreign-flagged superyachts - operating commercially
The good news is that Australia has recently made it easier for foreign-flagged superyachts to operate commercially. Previously these vessels could not operate commercially in Australia unless the vessels were fully imported. Under the Special Recreational Vessels Act 2019, superyachts (referred to as Special Recreational Vessels or SRVs) can now apply for a Coastal Trading Temporary Licence, which allows them to opt into Australia’s coastal trading regulatory scheme and be offered for hire or charter. Owners, masters or agents that receive temporary licences under this scheme will not have to pay goods and services tax (GST) on the importation into Australia of a superyacht. However, GST on hire and charter services will still apply.
Foreign-flagged superyachts - private use
For foreign-flagged vessels that do not intend to operate commercially, there are two clearance options depending on the time to be spent in Australian waters: a Control Permit, or temporary importation.
1. Control Permit
A Control Permit allows a vessel to sail in Australian waters for a limited period. A Control Permit is available if:
The vessel is not owned or operated by an Australian resident, unless the individual has overseas residency.
The vessel is transiting Australia for non-commercial purposes i.e. is not engaged in the commercial carriage of cargo or passengers, and it is not to be used for activities of a commercial purposes (e.g. charter, hire or lease).
The vessel, or parts of the vessel, will not be sold or listed for sale.
Control Permits may be issued for a period of 12 months, or the length of the master’s visa, whichever is less, and an extension may be available if the eligibility requirements are still met. The vessel may remain in Australia for repair or refit under a Control Permit.
2. Temporary importation
Tourists or temporary residents (i.e. a person not a corporation, company, trust, or other organisation) may be required to temporarily import the vessel into Australia if their visa allows them to reside in Australia for a limited period. Temporary importation without paying Customs duty and GST is subject to:
The vessel being exported within 12 months of arrival;
The vessel not being offered for sale, leased, hired, chartered, loaned, or engaged in the domestic economy without permission; and
A security in cash or an appropriate bank guarantee being provided equal to the duty and GST that would otherwise be payable.
Entry into non-appointed ports
Recent changes to reporting and border clearance procedures have resulted in a superyacht owner/operator/master or agent being able to seek permission to enter Australia through non-appointed ports. This applies to both private superyachts and those intending to operate as SRVs in Australia for commercial purposes and under temporary licence arrangements as described above.
A ship’s owner/operator/master or agent must submit a request through the Maritime Travellers Processing Committee (MTPC) prior to arrival, in order to gain such permission.
Due to Covid-19, the America’s Cup 2021 may well be a much more scaled back version that in the past. However, we hope that with travel and border restrictions being eased around the world, it will still be an attractive event for superyacht owners.
If you have any questions relating to how a superyacht can operate in Australian waters, please contact Peter Dawson on +64 27 229 9624 or by email peter@maritimelaw.co.nz.