What Does “Not For Sale in US Waters to a US Resident” Mean?

Written by Andrew Holland

As you are browsing through listings of potential catamarans to consider while you are online shopping, you may keep recognizing a familiar phrase for boats for sale that have you interested. Directly at the top of the listing you are looking at is a bolded “Not For Sale In US Waters To A US Resident”, but what does this really mean? As a US Citizen are you not able to buy the boat?

The language “Not For Sale In US Waters To A US Resident” must legally be added to listings for non-US Registered boats that are in US Waters under a cruising permit and placed for sale by the owner. As the current owner of the boat has not paid the US Import Duty on the boat, a sale cannot legally occur on the boat to a US Resident while she is in US Waters, and a broker cannot legally advertise the boat without making prominently clear that the boat is “Not For Sale In US Waters To A US Resident”.

Does this mean that a US Citizen cannot purchase the boat? No, not necessarily..

There are several ways a sale could occur on the boat you are looking at as a US Citizen. The first and preferred way would be for the seller of the boat to purchase a US Customs Entry Bond and pay the US Import Duty due on the boat. Exact rates of the US Import Duty would depend on where the boat was built and can range from .02% to 1.8% of the value of the boat.

The second way would method would be an “Offshore Closing” or a closing that occurs in the Bahamas or somewhere else outside of US Territory that is at least 12 nautical miles off the coast. An “Offshore Closing” transaction does complicate matters slightly as potential buyers for boats that have not been US Duty paid cannot board or view the boat while she is US Waters, so the transaction details must follow a strict protocol that abides by the laws of the United States. This will take the coordination and expertise of your broker for a transaction to be completed properly.

Many foreign flagged boats decide to delay paying the US duty on the boat while she is being marketed for sale in US Waters as to potentially sell the boat to another non-US citizen who can purchase the boat in US Waters without the owner having to pay the US duty prior to the sale.

Now, the Florida Yacht Brokers Association is proposing a change to the US law to allow owners of used foreign flagged boats in US waters with a valid cruising license to offer them for sale to US residents while in US waters, without paying duty, but to date this change has not been made. If and when these changes are made, this article will be updated to reflect the updated laws.

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About Andrew Holland

Andrew Holland is the Sales and Marketing Manager of 5 Oceans Marine Group and is an avid catamaran enthusiast. He began working at 5 Oceans Marine Group in 2007 after graduating from Temple University with a degree in Journalism and a minor in Marketing. Before joining TMC in 2007, Andrew worked for Philadelphia Media Holdings on the production team and freelanced for several major magazines around the country.

After joining the 5 Oceans Marine Group team in 2007 as the Web and Marketing Manger, Andrew began working closely with TMC President and catamaran expert, Phillip Berman, where he quickly learned the many facets of the catamaran industry and soon took over the role of Sales Manager at TMC. Now, after being aboard and sailing nearly all of the major productions cats along the Eastern coastline and Caribbean, Andrew has taken that expertise to work with TMC clients, whether they are buying or selling a catamaran.  Andrew has now oversaw the sale of over 800 catamarans around the world since he began working with TMC and is able to take the most complex transaction and make it a breeze!  Articles by Andrew Holland include: