Cannes & Monaco Boat Shows: how to handle customs for your yachts?

Secure the customs status of yachts in Cannes and Monaco

Every year, the Cannes Yachting Festival (CYF) and the Monaco Yacht Show (MYS) welcome hundreds of yachts and superyachts from all over the world. For captains, yacht managers and brokers, managing yacht customs formalities is complex, but essential to avoid costly mistakes. Showing a yacht in the European Union means securing its customs and VAT status upstream.

Cannes and Monaco come under the same customs jurisdiction, so your French-registered customs representative can assist you with all the necessary formalities.

Yachts arriving at the boat shows in Cannes or Monaco

The applicable customs regime and formalities depend on the status of the vessel: pleasure or commercial.

Customs formalities on arrival of merchant ships

When a merchant ship has already been definitively imported into the European Union, notably with VAT exemption under Article 262 II 2° of the CGI or via the ATVAI mechanism (reverse charge of import VAT), its participation in the show does not require any additional customs formalities. The ship already has ‘Union’ customs status.

When the vessel is imported specifically for the event, two situations need to be distinguished:

VAT reverse charge

• If the vessel is destined to remain in the customs territory of the Union and to be operated commercially thereafter, it can be imported definitively, either VAT-exempt when the conditions are met, or via the reverse charge mechanism.

Temporary importation and admission

• If the vessel is only to be exhibited at the show, and is not intended to remain in the EU, it can be placed under the TemporaryAdmission (TA) regime by means of a temporary import declaration under regime 53 00. Under this system, duties and taxes are fully suspended for the duration of the event.

Customs formalities for pleasure boats

For pleasure yachts, there are two main situations.

Conventional temporary admission (AT boat show)

• When a yacht is imported specifically to be exhibited or presented for sale at the show, it must be placed under the Temporary Admission regime, with the submission of a temporary import declaration under the 53 00 regime (art. 234-1 RDC). This regime is governed by articles 250 to 253 of the Union Customs Code, articles 204 to 238 of the Delegated Regulation and articles 322 to 323 of the Implementing Regulation. It allows yachts to be exhibited in the European Union, while suspending customs duties and VAT for the duration of the show.

AT 18 months’ or ‘Bonafide’ temporary private admission

• A vessel previously placed under AT 18 months (within the meaning of article 136 of the Implementing Regulations) may take part in the Cannes Yachting Festival and/or Monaco Yacht Show while retaining thistemporary private admission regimefor means of transport. The vessel then retains its customs status throughout the event, and no additional customs formalities are required.

Even if the right to temporary admission for 18 months derives directly from compliance with the conditions when crossing the border, it is strongly recommended that this status be evidenced by an official document. This document, issued by French customs, offers several advantages:

• It provides proof of the date of arrival in Community waters and of the vessel’s customs status.
• It facilitates navigation, by securing controls at ports of call.
• It is recognized throughout the European Union.

Our yachting specialists in Cannes can help you with all customs formalities.

Special cases

The situation changes when the vessel is the subject of a provision contract with a local broker, or of a sales mandate involving a genuine commercial approach. In this case, the customs analysis may change: the vessel is no longer strictly covered by the private TA for means of transport. It must then leave its 18-month TA and be placed under a classic Temporary Admission regime for the boat show, by lodging a customs declaration, in accordance with article 234-1 of the Delegated Regulation. Switching to a boat show import regime will enable the shipowner to temporarily suspend his 18-month TA during the boat show. But beware: this does not reset the 18-month time limit. When the yacht leaves a boat show TA, the term of the private TA continues to run from the end of the temporary regime.

Temporary Admission is not simply a formality for ships entering the European Union. It is the first stage in a customs cycle, the outcome of which must be anticipated.

Clearance: a strategic step at the end of the boat show

Opening a Temporary Admission by filing a customs declaration is a technical operation. Closing it correctly is a strategic operation.

Discharge of a yacht under TA boat show

A yacht placed under Temporary Admission (regime 53 00) can have several outcomes at the end of the show:

• If it is sold to a purchaser established in France, the system must be discharged by means of a release for consumption system (system 40 53). The sale makes the previously suspended duties and VAT immediately payable.
  – In a B2B relationship, the import VAT reverse charge mechanism (ATVAI) may be activated.
  – In the case of a sale to a private individual, duties and taxes will be paid to customs.
• If no sale takes place and the yacht is re-exported outside the customs territory of the Union, re-exportation constitutes the natural discharge of the procedure (31 53).

Discharge of a yacht under private TA (TA 18 months)

Customs status of the vessel if not sold at the boat show

When a yacht takes part in a boat show and remains under the Temporary Private Admission regime for means of transport, in principle no special formalities are required at the end of the event if no sale is made and the conditions of the regime are still met. The yacht then continues to benefit from its 18-month TA, and the time limit continues to run.

If the yacht is sold at the end of the boat show:

• When the yacht is sold to a buyer established in France, the Temporary Admission regime must be discharged by a release for consumption with payment of duties and taxes to French customs. Regularization takes place immediately after the boat show, and must be perfectly synchronized with the signing of the bill of sale.
• Another option is to organize the sale of the yacht outside EU customs territory, notably in international waters. In this configuration, the yacht physically leaves EU customs territory, and the Temporary Admission regime is discharged by re-export. Ownership is transferred outside the European Union. The yacht can then return to the Union in the name of its new owner, and complete the customs formalities appropriate to its situation, either by setting up a new Temporary Admission of eighteen months, or by definitive importation into the European Union.