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New legislation for Pleasure Yachts

17/04/2014

On April 14, 2014, the Greek Parliament enacted a new piece of legislation (Law 4256/2014) titled “Touristic Vessels and Other Provisions”. This Act of Parliament introduces many novelties in relation to the regulatory framework for the use and/or exploitation of pleasure yachts within Greece’s territorial waters. This new legislation intends to rationalize and contain the effects of heavy bureaucracy, simplify the chartering procedure and, subsequently, create a more flexible framework for all relevant issues.
 
Although the main distinction between pleasure yachts for private use and pleasure yachts for commercial use still remains, a set of provisions modernizes and simplifies the legal status for the use and chartering of these yachts.
 
As to the chartering of pleasure yachts designated for commercial use only, the following amendments have been implemented:
 
(A)   The administrative requirement for the issuance of a Commercial License for yachts solely designated for commercial use is no longer required and is replaced by (a) the granting of a certificate by the competent tax authority and (b) the registration of the yacht in a newly created registry, which will be described further below.
(B)   Commercial yachts with Greek flag or EU countries flags can perform charters in Greek waters. Moreover, commercial yachts with non-EU countries flags or with flags outside the European Economic Area are allowed to perform charters in Greek waters under certain technical and safety conditions and only if the passengers of the yachts board and disembark in Greece.
        
         According to the new legislation, charter brokers, shipping agents and touristic agencies can also charter yachts, with the approval of their ship owners or their managers, subject to the issuance of the license provided by the new law.
 
(C)   The new law, taking into account the recession that lowered demand in the relevant market, provides for a significant decrease in the required days a yacht should be effectively chartered in order to keep its commercial character. The number of days varies according to the oldness of the chartered yacht and its purpose is to generate taxable income in exchange for a VAT exemption.
 
To coordinate and effectively supervise the whole range of the newly established requirements, Law 4256/2014 recommends the creation of a Registry for yachts’ used for leisure purposes, private and commercial, which will be subject to the issuance of a relevant decision from the competent Ministry. The true innovation is the connection of this Registry with the information systems of the competent authorities. In addition, the charter agreements shall be submitted electronically to this Registry.
 
Another important provision of the new law provides that the owner of the yacht may unrig it for 1-3 years under certain conditions. This new possibility is granted to yacht-owners as a measure for relieving the economic burdens that have risen due to the economic crisis. 
In terms of flexibility, the new law attributes the following faculties:
 
(A)   The ability to charter yachts up to 24 meters of length without captain and crew. This provision harmonizes the Greek legislation with European standards.
 
(B)   Pleasure yachts, for private and commercial use, without crew are not obliged anymore to issue permission to sail from the port authorities and to declare their respective arrival. Chartered crewed yachts must issue a permission to sail within 48 hour from the commencement of the charter, in case the charter commences from a Greek port. No other permission to sail or declaration of arrival is needed. The Charter agreement must be certified within 48 hours from the commencement of the charter.
 
The most radical provision of the legislation in question allows the ship owners of pleasure yachts for private use of any flag to charter their yachts in Greek Waters under certain circumstances and provisions, without the obligation to perform a minimum amount of charter days. However, when pleasure yachts for private use are chartered, the VAT exemptions and other duties currently enjoyed by the commercial pleasure yachts will not be applicable.
 
Athens, April 17, 2014
Avramopoulos & Partners
 
For further information please contact:
Vicky Kolintza
Avramopoulos & Partners Law Firm
Email:  vkolintza@avralaw.gr
Tel.:  + 30 210 6912200
Fax: + 30 210 6911211

Important Note: The information contained in this newsletter is provided for your information only and should not be regarded as a legal advice.