Four situations bring these questions to the firm. Before signing, the pre-acquisition due diligence that traces liens and mortgages. After delivery, a latent defect the survey did not reveal. During the build or the refit, a dispute with the yard over delay or defective work. And at any stage, a dispute with the broker over commission or the deposit.
2026 guide: the legal, tax and customs framework of an international yacht transaction
Selling a yacht between parties of different nationalities looks simple: an agreement to transfer ownership of a pleasure craft. In practice, the transaction engages contract law, maritime law, private international law, customs and tax law, and anti-money laundering rules all at once, a level of complexity that matches the value of the assets involved, often tens of millions of euros. Here are the points of vigilance that structure a secure transaction.
1. A sale excluded from the Vienna Convention and governed by ordinary contract law
Contrary to a common assumption, the sale of a yacht is never governed by the Vienna Convention of 11 April 1980 on the international sale of goods: its Article 2(e) expressly excludes ships and vessels from its scope, whatever their size. In the absence of an equivalent international convention, the contract must itself settle every important question (conformity, warranties, passing of risk), because no international safety net will fill its gaps. Within the European Union, the Rome I Regulation of 17 June 2008 allows the parties to choose the applicable law freely; English law dominates the market for its predictability, but that choice never displaces the overriding mandatory rules (customs, tax, anti-money laundering, sanctions) that apply whatever law the contract designates. A jurisdiction clause (Brussels I bis Regulation) and an arbitration clause must never coexist in the same contract: the two mechanisms exclude each other. Choosing one means giving up the other.
2. Standard forms to be adapted, not copied
The market has standardised around model contracts drawn up by the brokerage associations: the MYBA Memorandum of Agreement governs most second-hand yacht sales in Europe, the IYBA form requires more detailed seller disclosures on the North American market, and BIMCO’s Norwegian Saleform is aimed at larger tonnage. These templates must be tailored to each situation: the nationality and tax residence of the parties, the ownership structure, the delivery schedule. Several clauses deserve particular attention: the deposit (usually 10% of the price) paid into an escrow account rather than directly to the seller, the technical survey and sea trial that allow the buyer to withdraw without penalty, and the distinction between passing of risk and transfer of title. Unless reservations are lifted before completion, an “as is, where is” clause sharply limits the seller’s warranties. The buyer then acquires the actual condition, not the promise.
3. VAT and customs status: a hidden risk that changes hands
The customs status of the vessel (“Union goods” or not) is governed by the Union Customs Code (Regulation (EU) No 952/2013) and the VAT Directive 2006/112/EC. That status attaches to the vessel, not to its owner: without documented proof that VAT was duly paid, the buyer may have to pay it at a later customs inspection, even if he was never told. The temporary admission procedure allows a non-Union vessel to sail in Union waters free of duty for eighteen months, renewable, provided the flag is non-European and the vessel is used only by non-Union residents; breach of that last condition triggers a retroactive tax assessment. The leasing structures used in Malta and Cyprus to reduce the VAT due have moreover been severely curtailed since the European Commission tightened its scrutiny. Brussels is now watching closely.
4. The choice of flag is never an administrative detail
The flag determines the applicable safety rules, the taxation of ownership, the formalities on resale and, at times, access to certain territorial waters. It must be decided consistently with the vessel’s VAT status and the chosen ownership structure.
| Flag | Legal framework | Main strengths | Point of vigilance |
|---|---|---|---|
| France | Francisation: Customs Code / Transport Code | Legal certainty, well-established ship mortgage | Nationality and residence conditions for the owner |
| Malta | Merchant Shipping Act / Commercial Yacht Code | Tonnage tax, flexibility, reputable registry | Private versus commercial use to be documented |
| Marshall Islands | Marshall Islands Maritime Act | Speed, tax neutrality, bank recognition | Non-EU registry: impact on VAT status |
| United Kingdom (Part I) | Merchant Shipping Act 1995 | Historic registry, registered mortgage | Post-Brexit: separate EU customs status to be checked |
5. Securing the transfer: Bill of Sale, mortgages and escrow
Title passes by delivery of the Bill of Sale, a formal document distinct from the sale contract, whose wording varies with the registry chosen. The flag changes the form, never the substance. Three operations must take place almost simultaneously under the control of the escrow agent: delivery of the Bill of Sale, payment of the balance of the price and release of the escrowed funds. Before any sale, an up-to-date mortgage search must be requested from the registration authority: under French law, the ship mortgage works on a logic close to that of the real estate mortgage, with priority by date of registration. The 1993 Geneva Convention on Maritime Liens and Mortgages has not been ratified by France, which applies its own national law, a point to be checked systematically for the flag concerned.
6. Anti-money laundering compliance and international sanctions
The FATF identifies luxury yachting as a possible vehicle for money laundering, because of the high value of the assets and the frequent use of corporate or trust structures. Money moves fast; vigilance must keep pace. The successive European anti-money laundering directives require brokers, lawyers and banks to identify the beneficial owner, the natural person holding more than 25% of the rights in the owning structure, and to verify the origin of funds; under French law these obligations are set out in Articles L. 561-1 et seq. of the Monetary and Financial Code and bind lawyers without professional secrecy standing in the way. Since the outbreak of the war in Ukraine, EU Regulations No 269/2014 and No 833/2014 further allow the freezing of assets of persons and vessels listed in their annexes: several hundred vessels now appear on those lists, and checking that no designation applies has become a systematic step in every transaction, on a par with the mortgage and customs searches.
7. Dispute resolution: arbitration and conservatory arrest
Yachting disputes are mostly resolved by arbitration, for the confidentiality it offers and the technical expertise of the arbitrators: the London Maritime Arbitrators Association under English law, the Chambre Arbitrale Maritime de Paris for disputes governed by French law. Two possible forums, only one chosen in advance. The conservatory arrest of the vessel, available in France under Article L. 5114-22 of the Transport Code as soon as a maritime claim appears founded (without a prior final judgment), remains the most effective means of pressure for an unpaid creditor, and a real risk to anticipate before completing a sale.
The complete guide, with operational checklists
The firm has prepared a 51-page practical guide covering all of these topics: characterisation of the contract, ownership structuring, financing, insurance, the social security regime of the crew on larger units and commercial charter, together with operational checklists for the buyer and for the seller. It is available as a free download in exchange for a professional email address:
Download the guide “International Yacht Sales”
For assistance with a maritime dispute or transaction, see our page on maritime law and, on this specific topic, our page on yacht disputes.
See also our practice page on yacht sale and purchase.