The UAE is on track to become the first flag state in the world to lay down specific regulations for personal yachts measuring more than 24 metres in length.

Pleasure yachts of this length have so far not had their own classification. They could only be classified as something else, eg a cargo ship, and the owners would then have to abide by regulations applicable to that category of vessels.

When the new regulations come into effect from July 1 – the first ship to be registered here is being built right now – yacht owners would get their own category, and the UAE, as the first such registry hub in the world, stands to make money from the registrations, though the amount payable as fees has not been disclosed yet.

The regulations, developed by the UAE National Transport Authority (NTA) and shipbuilding group, Abu Dhabi MAR, with support from DNV (Det Norske Veritas), a risk management consultancy firm, are applicable to private yachts that are more than 24m long and not for those engaged in commercial activities. There is no restriction on the number of guests onboard.

Abu Dhabi MAR is currently building the Swift 141, a 141m yacht that will comply with the new regulations and sail under the UAE flag.

"The UAE has a very ambitious maritime strategy," said Antony DSouza, DNV Regional Manager for Middle East and Indian Subcontinent. "Every vessel has to be registered with some countries and, currently, there is no registry focusing on some market segments. The UAE saw that [gap] and it jumped at the opportunity."

Until July 1, yachts of this size will operate as cargo ships with exemptions. "This means, as an owner or shipyard, you will be able to build and operate a ship to be used as a yacht over 24m officially. Earlier, you could do that but in a class certificate – it is called a cargo ship – which is not what people want," said Mark Bell, DNV's Middle East Area Manager.

Still some wrinkles

Industry players welcomed this development but indicated that this is just one of many wrinkles that need to be ironed out. "Any regulation that can promote safety on the seas as well as a structured way of handling privately-owned large vessels is to be welcomed," said Nasser Alshaali, CEO of local luxury yacht builder, Gulf Craft.

"We hope that these regulations will bring clarity to industry users, especially in our part of the world, where we offer fewer restrictions on classifications. In most cases, we refer to regulations outside the region," he said.

According to Christopher Mills, Partner at Clyde & Co, Dubai Office, the UAE Maritime Commercial Law (Federal Law No26 of 1981) provides that, among other exempted vessels such as small fishing vessels, pleasure boats of less than 10 tonnes shall be exempted from registration.

This has meant, however, that larger yachts have been subject to the provisions of that law, provisions that are primarily aimed at commercial shipping. If a national or a foreigner intends to keep such a yacht in the UAE, the yacht must be registered on the UAE Ship Register.

This provision, Mills said, presents problems because many lenders require registration in a particular flag state, so that a lender's interest charge against the yacht can be made on the register and the lender can be assured that in the event of default, he will have a proper remedy.

Many lenders would not currently allow a yacht, the purchase of which they were being asked to fund, to be registered in the UAE. Even if registered in the UAE, if the yacht is foreign-owned, it cannot be offered out for charter on a commercial basis. Only a UAE national- or company-owned yacht can be used for commercial charter operations.

"It is possible for such a yacht to be registered with another flag state and to obtain a UAE navigation licence but, if it is, it will then only be allowed to remain in UAE waters for a maximum of 21 days at a time before it has to do the yachting equivalent of a visa run," he said.

He said that with the exception of the exclusion of certain regulations imposed upon commercial vessels by the Maritime Commercial Law, none of these issues are addressed by the new regulations for yachts over 24m in length.

"It is hoped that the amended Maritime Law will tackle some of these issues to make it easier for UAE flagging of such yachts and, consequently, an increase in ownership of such yachts under the UAE flag," he said.

Issues addressed

What these new regulations do accomplish, however, is recognition of the fact that there are issues specific to such yachts that are not properly dealt with by the current Maritime Commercial Law, Mills said.

He noted that addressing issues such as manning, life-saving equipment on board, navigation, building (structure, buoyancy, stability), prevention of pollution etc and the new regulations are, therefore, to be praised as a step in the right direction.

"What is not, however, yet known, is how other flag and port states will view these regulations and compliance certification issued pursuant to the regulations. I believe that they have been submitted to the IMO (International Maritime Organisation), but I don't know what response has been received," Mills said.

DSouza added: "There is room for improvement here. The UAE needs a complete set-up, starting with the establishment of national rules so that yard owners can comply with it. So, there is much work that needs to be done. They need to pass legislation to support the registries."