What is a ‘MARAD’ Waiver?
SAFE CHARTERING SERIES
So you want to charter a foreign built vessel?
If you’re reading this article, you’re likely researching United States charter regulations. You may even be the owner, manager or captain of a foreign-built vessel and have recently learned the MARAD waiver is your ticket to charter eligibility with the United States Coast Guard.
After reading this brief article, you’ll know what a MARAD waiver is, who needs it, why you need it, and how to get one.
KEY FACTORS
WHO/WHAT IS ‘MARAD’?
The MARine ADministration Division of the United States Department of Transportation.
WHAT IS THE JONES ACT?
The Jones Act (46 U.S.C. § 55102) requires that vessels operating in coastwise commerce be built in the U.S. whenever possible. In this context, “coastwise commerce” relates to the domestic movement of goods between US cities.
WHAT IS A SMALL VESSEL WAIVER?
Since the Jones Act is intended to prohibit foreign cargo ships from controlling domestic transport, there are exceptions to allow certain small passenger vessels to operate for-profit. These exceptions are broadly known as the Small Vessel Waiver Program.
WHAT IS A MARAD WAIVER?
Vessels eligible for the Small Vessel Waiver Program receive a MARAD Waiver, allowing them to operate for-profit in a specific United States region with up to 12 passengers on board.
Simply put, if you’re planning to legally charter a foreign-built vessel in the United States using anything other than a Bareboat format, you’ll need a MARAD waiver to do it.
Fun Fact: The USDT estimates it grants 150 MARAD waivers annually.
Why Would my Vessel Need A MARAD Waiver?
You’ll need a MARAD waiver if:
1.) You want to charter your boat to a paying passenger, and
2.) Your boat was foreign-built OR its build location is unknown, and
3.) You don’t want to use a bareboat charter format
*For more information on bareboat chartering and what it means for you and your customer, read our article on the Troubles of Bareboat Chartering.
ELIGIBILITY AND APPLICATION PROCESS
Eligibility
The MARAD waiver has a set of requirements your vessel will need to pass in order to be eligible:
be owned by a U.S. citizen or organization,
be at least three years old,
intend to carry passengers only,
carry no more than 12 passengers at a time when in service, and
satisfy standard U.S. Coast Guard requirements for passenger vessels
Application Process
Your application includes a written request to operate the vessel in the United States, which is followed by a 30 day public notice and a subsequent wait period of up to 30 days before you receive your waiver. The public notice is offered to notify similar US-built vessels of your intention to operate within a designated reason, and a chance for them to make a claim that your vessel would impede upon their ability to operate successfully.
Non-refundable $500 government fee
Written application, including your specific operating area and purpose for operation
30-day public notice period
If no substantiated claims are made, you receive your waiver within 30 days of the notice’s end
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About the Author
Reed Nicol is a licensed yacht broker with a wealth of industry knowledge. He’s worked as an executive and sales director in yacht manufacturing and distribution, has started and managed commercial charter operations, and works now as a consultant and private broker helping his clients buy and sell great boats. Read more about Reed’s marine journey, his love of helping 1st time boaters and his entrepreneurial spirit here.
Reed Nicol [Licensed FL Yacht Broker #11926]
(201) 264-6356
Reed@RNMarine.com
