You may have noticed the added wording in Purchase and Sale Agreement (PSA) related to the Lacey Act and the Import Summary. For our purposes, these additions relate only to imported, foreign-built vessels. We covered this subject in some detail at YBAA U in Annapolis last July and will do so again at YBAA U in Rhode Island this July. In addition, we discussed this on a webinar in January. For your edification, and to share with your buyers and sellers as needed, this is a summary of those talks:
- The Lacey Act, first enacted in 1900, is the oldest federal wildlife protection law in the United States. It was introduced by Congressman John Lacey and signed into law by President William McKinley. Originally, it aimed to preserve game and wild birds by making it a federal crime to poach animals in one state and sell them in another. Over time, the Act evolved to address broader conservation concerns, including the introduction of non-native species and the protection of plants. Amendments in 2008 expanded the Act to cover timber and plant products, requiring importers to declare the scientific name, origin, and quantity of plant materials (including boat furniture, i.e. Burmese teak). As of January 1, 2025, all boats being imported into the United States must file a declaration as to the source of the wood on board. This applies to all boats built after January 1, 2008. Violators face both civil and criminal penalties, including fines and imprisonment. The Act also prohibits falsifying documents and failing to properly mark shipments.
- Customs and Border Protection Form 7501, known as the “Entry Summary”, details import duties, tariffs and taxes paid upon a foreign-built product entering the United States. This paperwork is issued to the importing company or individual bringing in, for our purposes, a foreign-built vessel. Two problems exist, as many older boats that were imported years ago may no longer have the paperwork intact, and today’s tariffs make complying with the law an expensive proposition. You need to protect your seller, your buyer and yourselves when transacting brokerage deals with foreign-built vessels. Violations for not paying duty range from two times the lawful duties due to the value of the product, whichever is less and based on the culpability of the violation.
While at this time none of our members or clients faced any enforcement action on either of these legal requirements, there is a chance that enforcement will be initiated in the future. What do you do? If the forms are not in the hands of your sellers, you may be able to reach out to the importer (dealer) or customs broker that imported the vessel. But as this paperwork is only required to be held for three years, this may be a dead end. Be careful of assuming a US flagged vessel guarantees the duties have been paid and the boat is compliant with the Lacey Act. Many US flagged vessels may never have been through the importation process (e.g. charter boats in the Caribbean or Med), and if they have been imported, CPB keeps no records of their 7501 form. The onus is on the seller to provide, or to comply with the law as outlined in the Listing Agreement: “OWNER will transfer the VESSEL to BUYER free of all debts, claims, liens, taxes, customs duties, license fees and encumbrances of any kind;”
The PSA further spells this out for both parties in paragraph 9.i. YBAA is working on an affidavit form that would allow agreement between buyer and seller on the status of this issue and we hope to share that soon. In the meantime, be careful, and transparent, with buyers and sellers in any transaction that deals with a foreign-built vessel.
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Bill Bolin, CPYB
Managing Broker, S&J Yachts
YBAA President (2025-2027)