Yachting has evolved from a purely leisure activity into a dynamic industry where asset optimization is becoming increasingly important for yacht owners. One notable innovation in this space is the Yacht Engaged in Trade (YET) program, which offers a flexible, legally compliant framework for yachts to alternate between private use and occasional commercial charter. However, while this program has been embraced by jurisdictions like France, Monaco and Greece, many EU countries have yet to adopt it. This is despite the fact that the legal foundation for YET lies firmly within the Union Customs Code (UCC), particularly its provisions on temporary admission.
The Yacht Engaged in Trade Program: A Dual-Use Opportunity
The Yacht Engaged in Trade (YET) program is a flag-state compliance framework, not an EU status, offered by registries including the Republic of the Marshall Islands, the Cayman Islands, the Isle of Man, Bermuda, and the British Virgin Islands. It permits privately registered, non-EU-flag yachts that meet full commercial-compliance standards ( ≥24 m Load Line) to undertake limited charter activity, up to 84 days per calendar year, in designated EU waters while maintaining private registration and without permanent importation or conversion to commercial status. Owners thus retain the advantages of private use (including avoiding VAT on self-use and dispensing with self-charter mechanics), while lawfully chartering for part of the season to defray operating costs, subject to commercial-level safety and manning requirements and bespoke YET certification.
Crucially, YET eliminates the need for constant import/export formalities or structural changes to the yacht’s registration status each time the use changes between private and commercial. The yacht retains its private flag status while engaging in occasional, authorized commercial activity under temporary admission. This represents a streamlined and cost-efficient solution for many owners.
Legal Basis Under the Union Customs Code
The legal foundation for the Yacht Engaged in Trade (YET) program is firmly rooted in the European Union’s Union Customs Code (UCC), particularly Articles 250–253 and the corresponding Delegated and Implementing Acts, which govern temporary admission (TA). These provisions allow third-country goods, including yachts, to enter EU customs territory with full relief from import duties and VAT, provided they are not placed on the EU market or used for permanent commercial purposes.
Temporary admission with full relief may cover yachts used for private or limited commercial purposes, including occasional chartering under specific conditions. The UCC expressly permits such dual-use operations, as long as the yacht is not permanently imported or sold within the EU, and the commercial activity remains limited in time, scope, and nature.
This interpretation is reinforced by several rulings of the Court of Justice of the European Union (CJEU). In Fuchs (C‑219/12), the Court held that an activity can constitute an economic activity under VAT law even in the absence of a profit motive, provided it involves the regular supply of services for consideration. However, this does not automatically render the activity “commercial” for customs purposes. In Air Berlin (C‑80/15), the Court clarified that “commercial use” under customs law must involve the provision of transport services, specifically, the paid movement of persons from one location to another.
When read in conjunction with the Bacino Charter case (C‑116/10), these rulings provide a robust legal foundation for the YET regime. The Court held in Bacino that it is the actual use by the end user, not the commercial status of the operator, that determines whether a vessel is considered to be in commercial or private use. Accordingly, even if a yacht is chartered under a commercial framework, if the charterer uses it for private leisure, as is typical under YET arrangements, the yacht is not considered to be engaged in commercial transport and may still fall within the scope of private-use temporary admission.
It is important to recall that temporary admission is a use-based regime, not one determined by the vessel’s registration or ownership structure. Under Fuchs and subsequent interpretations by national customs authorities, the notion of “commercial use” under customs law applies only to activities whose primary purpose is transport, particularly the transport of persons for consideration. It does not encompass all economic activities involving a vessel. For example, when a yacht is chartered for leisure, tourism, or recreational sailing, even in exchange for payment, this does not constitute commercial use, as the primary service is not the carriage of persons from point A to point B.
As such, a yacht may remain under private-use temporary admission for up to 18 months, even if it is lent or chartered, whether free of charge or for consideration, provided the use remains within the scope of private leisure, and not transport services.
Together, the Fuchs, Air Berlin, and Bacino rulings, supported by evolving customs doctrine, confirm that actual use, not formal structure, determines the legal classification of a yacht under temporary admission. This decisively rebuts claims that chartering under YET, or under a standard commercial registration for a foreign-flagged, non-imported yacht, necessarily disqualifies the vessel from private-use TA. When properly applied, YET is fully consistent with the Union Customs Code and CJEU jurisprudence, offering a compliant and flexible framework for non-EU flagged yachts operating in EU waters.
Why Should All EU Countries Adopt the YET Program?
1.Legal Harmonization Under a Single EU Framework
The UCC is binding across all EU member states and provides a harmonized customs framework. YET, grounded in the UCC’s provisions, should therefore be uniformly accepted. Current fragmentation, where some EU jurisdictions allow YET while others do not, creates uncertainty and inefficiencies for owners, operators, and charter clients alike.
2.Economic Stimulus for Coastal Regions
By allowing more yachts to engage in limited commercial activity without full commercial registration, the YET program increases yacht traffic in EU waters. This translates into higher spending in marinas, shipyards, tourism, and luxury services, generating employment and tax revenues for local economies.
3.Tax Revenue Without Administrative Burden
While yachts under YET are not subject to VAT or duties upon entry, their charter activity generates substantial indirect tax benefits: VAT on charter fees, on fuel and on supplies and services (as applicable). Importantly, this is achieved without the complexity of full commercial importation.
4.Improved Oversight and Regulation
Commercially active yachts under the YET regime remain subject to EU safety and environmental standards, as well as inspection requirements. This strengthens maritime governance and helps monitor the growing dual-use segment of the fleet.
5.Owner-Friendly Compliance and Flexibility
With YET, yacht owners avoid the complications of repeatedly switching between private and commercial status, or navigating import/export customs procedures each time their intended use changes. This encourages compliance and promotes the use of EU ports and facilities.
Conclusion
YET is not a legislative carve-out; it is a flag-state compliance pathway that operates within the Union Customs Code’s temporary-admission regime. Applied correctly, it enhances compliance and increases VAT capture on charter services without requiring permanent import. EU-wide, consistent recognition of YET-style dual use would reduce legal friction, boost cross-border charter activity, and support coastal economies while preserving the integrity of EU customs principles and fiscal policy. The legal tools to do so already exist (UCC/UCC-DA, port-state control, and flag-state standards, supported by CJEU jurisprudence on use characterization and VAT treatment).
What remains is for all maritime EU countries to validly and uniformly adopt the YET program without further delay. In theory, no new authorization should even be required, since the necessary framework already exists in the texts themselves. It is now simply a matter of applying them consistently across Europe.
Yachting is often seen as the playground of the wealthy, characterized by extravagant parties and opulence. This portrayal fails to acknowledge the industry's broader economic significance and the multitude of professionals involved in its operations.
Yachting supports a vast network of jobs and contributes significantly to local and global economies (valued at USD 26.00 billion in 2023 and expected to reach USD 40.40 billion by 2029). In the Mediterranean, it supports over 450,000 jobs across various sectors, including construction, design, maintenance, marina, legal, financial services, and hospitality.
Recent actions by environmental activists, such as the vandalism of the €300 million yacht 'Kaos' in Ibiza by the group Futuro Vegetal, highlight the increasing scrutiny the industry faces also regarding its environmental footprint. This underscores the need for the industry to adopt and promote sustainable practices.
For more information, please contact:
Janet Xanthopoulos
Director and Head of Yacht & Jet Department
j.xanthopoulos@rosemont-yacht.com
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09/2025