Illegal Yacht Charter: First Yachts Denied Entry into Croatia
On Monday 8th May 2017, Turkish Gulet Adatepe 4, was stopped in the Port of Dubrovnik and sent back to her port of embarkation in Montenegro, after it was discovered she did not possess the correct documents to operate in Croatia – ruining the holiday of British clients aboard.
Thanks to new regulations imposed on May 1 2017, by the Ministry of Maritime Affairs, Croatia is now making it more difficult for ‘Black Charter’ Yachts to enter and charter in Croatia. Turkish Gulet Adatepe 4, is one of several who have recently been refused entry into Croatian waters. This was the result of tremendous efforts from the local Union of Yacht Owners and Charter Agents; for months, they have been pushing for changes to protect the local market and set stronger regulations for foreign boats who wish to operate in Croatian waters.
So far, this news has gone almost unnoticed in the media, but it is of huge importance for the Croatian economy and charter market at large.
What does Black Charter mean? Simply speaking – yachts that operate illegally in Croatia. Meaning, they do not have licences to Charter in Croatia, they do not apply the same standards and regulations of the Croatian Ship Register and they do not pay taxes in Croatia. It goes without saying, this is more than damaging to the local economy.
With the unstable political situation and declining yacht market in Turkey and Greece, Croatia has become a very lucrative destination for many Turkish gulets, who use loopholes in regulations to conduct illegal charters. Many foreign yachts re-register from commercial to private and secretly operate as a commercial yacht; they then embark their passengers in Montenegro – which has a very attractive 0% VAT and duty-free fuel, before proceeding to Croatia. Not only this, but many Gulets are severely under-cutting their prices, creating unfair competition, making it almost impossible for local yacht owners and charter agents to compete.
Healthy competition in any market can be a good thing – however, this is anything but healthy; especially knowing that the number of Turkish gulets far outnumber Croatian gulets.
Prior to changes put into effect on May 1, 2017, any yacht who embarked their passengers outside of Croatia, did not need to have a Croatian Charter license, nor pay VAT in Croatia. Yachts will now need to pay VAT on days spent in Croatian waters (not applicable to charters booked before regulation changes) and all non-EU flagged vessels are required to have a license to charter in Croatia, regardless of whether the charter started outside of Croatia. These changes to regulations are now more in accordance with other European Union Member States.
Heading into another summer season, word of yachts being rejected from Croatian waters, spells good news and a small victory to local yacht owners and agents. Hopefully this sends a message to yachts wishing to illegally charter in Croatia and the agents who support them. The only shame is that unwitting British clients have just had their holidays ruined because of it!
What does this mean to those wishing to charter a yacht in Croatia? When chartering a yacht, be sure of the agent you use and the yacht you charter, especially if it has a foreign flag and, if the price seems too good to be true, then it probably is.
The Port Authority of Dubrovnik stated what is already written quite clearly here: ”A foreign vessel carrying passengers from one harbour into another harbour in a foreign country is not allowed to do so without obtaining the necessary permissions from the appropriate Ministry of that country and therefore this vessel was asked to leave. These laws will now be applied strictly.”