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Law Leaves Charter in Question

While the US Congress and President Obama seem to be able to get little done in the national interest these days, they did, in November, hustle a bill into law enabling foreign-flagged racing yachts and their support vessels to operate in San Francisco waters during the coming America’s Cup festivities. The America’s Cup Act of 2011 does, however, leave unresolved the extent to which foreign-flagged charter yachts will be able to conduct business during the 2013 event and its run-up.


The Act, introduced by California Senator Dianne Feinstein and others, and signed into law by the President in late November, basically provides an exemption to the Jones Act and the Passenger Vessel Safety Act for foreign-flagged involved in the competition and those directly supporting the competing yachts, but in its definitions of what is an “eligible vessel” it excludes foreign-flagged boats that “transport individuals in point-to-point service for hire.”

Fraser Yachts is the superyacht “Operational Partner” for the event. Fraser Global Marketing Director Patrick Coote answered some questions about the Act and the landscape concerning yacht charter for the 2013 competition:

What does the title "Operational Partner of the 34th America's Cup Superyacht Program" mean exactly?

As Operational Partner, Fraser Yachts is the company that will liaise between the America’s Cup organizers and the yachting community as far as yacht supply is concerned. Therefore ideally, every request coming from clients or brokers about bringing or chartering a yacht during the America’s Cup should go through us so that we can coordinate everything and ensure that there is clear communication between all parties about what is involved.

How does the America's Cup Act of 2011 impact the ability of foreign-flagged charter yachts to do business during the Cup and related events?

This still needs to be fully defined. Whilst exemption will give the right for foreign flagged vessels to enter domestic waters in the various locations of the races, it is much more for the racing yachts than anything else. It is still a foot in the door, but how foreign flagged vessels will be allowed to conduct business still needs to be defined.

The Act is specific about what types of vessels are exempt from the Jones Act and the Passenger Vessel Safety Act. It appears foreign flagged pleasure boats and charter yachts are not covered. Is there, or will there be a mechanism for inclusion of such vessels in place by the time of the Cup summer and fall?

Legislation always takes a long time so it might be difficult to have something in place by the summer, but we certainly hope that there will be by the fall.

Is it possible yacht charter will be limited to U.S.-flagged boats?

This is a possibility, particularly if no one goes and negotiates with the coast guards and local authorities on the behalf of the foreign flagged vessels. The different syndicates will want different spectator boats attending for their guests so they should be the ones lobbying for this.

What is your expectation on demand for superyacht charter during the Cup summer and fall? Given the relative scarcity of product in the region, will supply be able to meet demand?

We are expecting a good level of interest and we believe that supply will be able to meet demand so long as everything is well organized. If we are able to put a decent charter program together, at least a year in advance, to prove to the owner that it is worth not returning to Europe after the Caribbean season and there are plenty of destinations to explore on the west coast before the Cup takes place, then we will be to encourage enough owners to attend to be able to meet demand. It is also up to the brokerage companies to do their job and generate enough serious charters for the owners to accept the investment.