Flag Standards

james

Inside the superyacht registry race as owners demand greater flexibility, stronger compliance, geopolitical security and global credibility.

Words: Claire Griffiths

Intended use, cruising plans, ownership structure and operational preferences are all thrown into the thinking pot when yacht owners choose a flag state. Initially (hopefully) they’ll also take a squint at the Paris MoU White, Grey, Black (WGB) list. A state on the White list being the one to aim for. Why? The list presents the full spectrum, from quality flags to flags with a poor performance that are considered high or very high risk.

It is based on the total number of inspections and detentions over a 3-year rolling period for flags with at least 30 inspections in the period. Yachts registered on the White list tend to have fewer port state controls and fewer detentions. This month ONBOARD contacted a cross section of flag registries: The Isle of Man, Antigua & Barbuda, Panama and Portugal are White listed flag states. Belize is on the Black list. The British Virgin Islands (part of the Red Ensign Group) is not listed on the Paris MoU because the list requires a minimum of 30 port state control inspections over a three year rolling period to formally rank a flag state on the WGB performance list. 

 

FLEXIBLE FRIENDS

Today yacht owners are looking for maximum flexibility from their flag. They want the option to cruise privately and then turn commercial when the time suits. So, are the flag states stepping up to meet this increasing demand? Giorgios Bazos is Business Development Manager at the Virgin Islands Shipping and Maritime Authority (VISMA). He believes the flag offers fast, easy transitions between private and commercial options and owners can upgrade or downgrade their vessel’s status quickly with minimal paperwork and same-day processing. He says, “We are prominent in the commercial market and can code vessels under all yacht codes up to the Passenger Yacht code.” It’s the same story at the Isle of Man Shipping Registry, with a defined pathway that allows the switch from private to commercial almost instantly. The fundamental principle that allows easy switching between private and commercial registration is that the vessel must maintain full commercial compliance at all times, even when on a private certificate.

This means that all audits, inspections and surveys are kept up to date, as well as any other requirements. The only noticeable difference on a private certificate of registry is that the vessel is issued with Statements of Compliance instead of Certificates.Paul Grace is Principal Marine Surveyor at the Isle of Man Shipping Registry and explains: “We understand that this flexibility is vital to the operation of many modern superyachts. To switch from commercial to private, we only require a written request from the owner or an authorised person, together with a declaration of pleasure use.To switch from private to commercial requires a remote survey on the vessel to verify that commercial compliance has been maintained throughout the period of pleasure use. There is no charge for this service, and it can be arranged at short notice.”

In 2025 the Isle of Man introduced its Yacht Engaged in Trade scheme, which allows yachts (subject to certain conditions) to undertake occasional charter activity whilst maintaining pleasure certification.Antigua and Barbuda Department of Marine Services and Merchant Shipping (ADOMS) has also introduced a dual-mode registration policy, that allows the switch under a clearly defined regulatory framework.“The process is based on transparency and compliance,” explains Amb Dwight Gardiner OBE, Director and Registrar General of ADOMS. Owners are required to notify ADOMS when changing operational mode, and the yacht’s certification, manning and onboard documentation must always correspond with its declared status. This provides owners with the commercial flexibility they seek while ensuring that safety and regulatory standards are fully maintained.

Gardiner adds, “We believe this approach offers practical benefits to owners, charter managers and financiers by reducing administrative burden while maintaining the integrity of the Registry and compliance with international standards.”The Panama Flag Registry handles the switch by re-classification explains Cónsul General, Ana Helena Altamirano at the Consulate of Panama based in Marseille. To make the change, an application for a Change of Vessel Type must be submitted. Based on the information provided, the vessel would be reclassified from a Pleasure Yacht to a Commercial/Passenger Vessel or vice varsities process is initiated through the Consulate. First, the Navigation Department conducts an assessment to confirm whether the requested change of classification is feasible. The owner must submit a letter stating the intended number of passengers. 

The vessel’s account will be reviewed to ensure that all fees and obligations are up to date. The owner must submit a letter stating the intended number of passengers ordeclaration of non-commercial use in case of a switch to pleasure yacht. Once the reclassification is approved, the vessel will be subject to taxes and fees according to its gross tonnage. For the pleasure yacht, the unique biannual tax will be settled.Once the switch is processed, depending on the type of registrationany applicable statutory certificates and financial securities required by Segumar Office (Marine Safety)must also be obtained.“Most reputable registries, including MAR (the international shipping register of Madeira), have established procedures that allow vessels to transition between private and commercial registration, provided the yacht meets the applicable regulatory, manning, safety, insurance and tax requirements relevant to the new operational status,” says Sara de Sa Leao, Head of Fairway Madeira.
“The key challenge is ensuring that the vessel remains compliant when changing use.”Commercial registration requires additional certifications, inspections, crewing standards and operational procedures. The most successful registries are those that can guide owners efficiently through this process while maintaining regulatory standards. “Owners value registries that provide clear guidance, responsive administration and practical solutions rather than unnecessary bureaucracy. Flexibility is important, but it must be balanced with safety, compliance and international credibility,” says de Sa Leao.Erik A De Koning is Managing Director of Hubel Marine B.V based in the Netherlands. He has represented the Belize International Merchant Marine Registry (IMMARBE) for the last three decades and is authorised to issue vessel registration documents, seafarers’ certificates and endorsements, as well as dispensations, waivers and exemptions on behalf of the Administration. All services are delivered through IMMARBE’s secure digital platform, managed by the Registry headquarters in Belize.IMMARBE’s Declaration of Private Use allows privately registered yachts to charter for up to 112 days within any 12-month period, provided they comply with the additional safety and technical requirements applicable during commercial use. It offers owners flexibility while maintaining full regulatory compliance.

SCRUTINY ON THE BOUNTY 

So most registries, the reputable ones anyway, clocked the need for flexibility some while back. But an onslaught of regulatory scrutiny and questions relating to provenance is something else that makes some yacht owners quite twitchy. Regulatory scrutiny has increased significantly across all sectors, including yachting, particularly in relation to anti-money laundering, beneficial ownership transparency, sanctions compliance and source-of-wealth verification. There’s not always much the registries, can (or are prepared to) do about that. Like VISMA, for example. Explains Bazos, “VISMA has long maintained high compliance standards. We proactively verify vessel provenance and ownership structures to ensure security and transparency.

This approach gives our clients confidence and protects the registry’s reputation.” Erik A de Koning echoes Bazos’ comments, “Enhanced due diligence, sanctions screening and ownership verification are now essential. We fully support these developments because they protect both the Registry and legitimate owners.” He adds, “Our office carries out thorough pre-screening before applications are submitted to IMMARBE, ensuring transparency and compliance from the outset.”  “While some clients initially see these requirements as burdensome, we view them as a positive development for the industry,” says de Sa Leao at Fairway. “Strong compliance standards help protect the reputation of reputable owners, service providers and registries. The most effective approach is preparation and transparency from the outset.

Regulatory scrutiny has increased significantly, in relation to anti-money laundering, beneficial ownership transparency, sanctions compliance and source-of-wealth verification.

We place considerable emphasis on due diligence, documentation and understanding ownership structures. This proactive approach helps to reduce registration delays and ensures that vessels can operate confidently within an increasingly regulated environment.”Panama claims it is all for strengthening due diligence and has a Precheck Tool to ensure compliance before registration. “There are no nationality restrictions for vessel owners, so shipowners from around the world are welcome to register under the Panamanian flag,” Consul Altamirano points out. At ADOMS Gardiner and his team work closely with owners, managers and professional advisers to ensure compliance with applicable international sanctions and regulatory requirements. “Basically,” says Paul Grace, “for yachts that are well operated and maintained, increased regulatory scrutiny and provenance should not be an issue.” IOM also carries out checks of the yachts, in particular checking of sanctions or port state control issues.