A massive Joint Task Force operation last week detained 184 charter vessels across at least three companies for alleged safety violations and other issues, according to Customs Commissioner Wade Smith.
The seemingly sudden crackdown caused social media to blow up with frantic charter guests trying to find alternative accommodations. And although Mr. Smith claimed the move “will not affect” the BVI Spring Regatta and Sailing Festival scheduled for next week, the event’s director said some participants have been unable to charter the boats they need to race.
In a statement delivered via ZBVI on March 17, Mr. Smith said the action involved the Customs Department; the Department of Labour and Workforce Development; the Department of Immigration; the Department of Trade, Investment Promotion and Consumer Affairs; the Virgin Islands Shipping Registry; the BVI Ports Authority; and the Financial Investigation Agency.
He explained that many of the detained vessels did not meet the “minimum safety requirements” that would allow them to obtain a safety and exemption certificate to be considered home-based charter vessels. Missing equipment, he said, included propane detectors, high water alarms, smoke detectors, fire extinguishers, flares and life jackets.
At a press conference on Friday, Mr. Smith and VISR Director John Samuel elaborated further, explaining that the violations leading to the detained boats fell under the Commercial Recreational Vessel Licensing Act of 1992 and the Cruising and Home Port Permit Act of 2021.
“Vessels that do not have the commercial recreation vessel licence and requisites will not receive a commercial licence,” Mr. Smith said, adding that vessels without that licence are limited to seven charter pickups per year in the VI. “The commercial cruising permit gives them the opportunity to become home-based in the BVI.”
Forty-six of the detained vessels did not have the proper licences to perform more than seven pickups, officials explained.
“We are working closely with the companies to get these vessels compliant,” Mr. Smith said.
Although the detention of vessels happened quickly, Mr. Samuel said a review process began last year.
“We began inspecting vessels around October 2021,” he said. “The industry then indicated that they needed more time. We sat with Customs, we agreed to extensions, we extended to December 2021 for everyone to comply. With some of the tougher measures, we’ve extended to December 2022 to comply, and we began working closely with the industry to try to get their fleets up to speed.”
However, he said the industry complained that some standards were “perhaps not suited directly for BVI waters.”
“We met, we discussed those, we began a process of tagging equivalencies or exemptions for those items,” he explained. “And this process has been continuing to where we are now.”
However, he added, some vessels lacked safety items that “we cannot really exempt or allow them to continue to operate without.”
For the violations, the largest of the companies, The Moorings/Sunsail, was fined over $300,000, Mr. Smith said, adding that a total of 138 Moorings boats were detained.
Judy Petz, the director of the BVI Spring Regatta and Sailing Festival, said news of the detained vessels took her “by surprise” as the regatta prepares to return next week after two years of cancellations due to the pandemic.
The crackdown, she added, has caused problems for some regatta participants, many of whom had planned to race on boats from The Moorings.
“People were very concerned [when they heard the news], and we had a lot of calls,” she said.
Many Moorings boats are foreign-flagged, she added.
“Those boats in particular, which we do have quite a few, do need to go through a process to acquire a licence [to be able to operate],” Ms. Petz said. “You can do the paperwork on your own, but it’s quite extensive. So there’s an agent who we’ve partnered with to help.”
She added that she reached out to Customs, VISR and The Moorings to make sure “the I’s were dotted and the T’s were crossed,” but her efforts didn’t stop some would-be racers from being disappointed.
Of all the registered boats, 23 were chartered from The Moorings, she said. As of Tuesday night, at least five were unable to race, leaving at least one would-be flotilla — made up of long-time racers — with just one boat when they had expected to have five, she said.
As of Tuesday, she couldn’t determine how many more vessels were likely to be unavailable.
Other guests just about to start their vacations were caught in the crossfire, with some contacting charter companies to see whether their vessel was still available.
Molly Stepansky, a three-time visitor from Chicago, was about to leave on a trip to the VI when she spotted a social media post proclaiming that several Moorings charters had been cancelled with no warning.
“We were supposed to arrive tomorrow evening,” she told the Beacon on March 16. “And I just heard on Facebook, honestly, that there was some trouble with the charter company.”
She added that it took her several phone calls to learn the truth: She didn’t have a boat.
“It’s a little stressful,” she said, though she made the trip anyway and eventually found another yacht through charter company Navigare.
Ms. Stepansky said the incident didn’t harm her view of the VI or the Moorings, however.
“I’ll definitely still come back,” she said.
At a press conference on Friday, VI officials said that although the actions seemed sudden, they were not without forewarning.
Customs held two symposia in October to familiarise companies with new rules contained in the Cruising and Home Port Permit Act of 2021 and to provide updates on the Commercial Recreational Vessel Licensing Act of 1992, according to a Customs bulletin.
However, speaking at the Friday press conference, Peter Cochran, vice president of operations for The Moorings, blamed supply-chain disruptions, finances, staffing issues and a large amount of paperwork for the company’s failure to fully comply with the rules, despite being informed of them.
“The pipeline to parts and supplies in terms of the post-Covid situation with supplies has been challenging,” he said, adding that the “paperwork element of compliance has been challenging. We have a fleet of owners that obviously have to supply documentation, and that’s been more time-consuming itself.”
He said that more than 200 vessels in his fleet have now been surveyed and that the company plans to get all vessels back into service in one to two weeks.
A statement on the company’s Facebook page said it has been working “round the clock” to contact customers whose charters were disrupted.
“We look forward to that and to solve this problem with immediacy,” said Mr. Cochran.
Mr. Smith said the Moorings was fined $110,000, which it had since paid, for vessels in a marina on Virgin Gorda that weren’t licensed to operate in the VI.
Another $140,000 will be collected for outstanding duty on the vessels, he added.
“Our compliance checks also revealed that one of our documents was tampered with by a Moorings worker; this carries a penalty of $20,000,” he said.
According to Mr. Smith, Customs also discovered an “undocumented worker” at The Moorings, though Mr. Cochran declined to address that allegation at the press conference.
Two other companies, Dream Yacht Charters and Captains Compass, were fined $95,000 and $55,000, respectively, Mr. Smith said.
“Dream Yacht has 46 boats that are currently detained and cannot be chartered at this time, for violating the [Commercial Recreational Vessel Licensing Act] and not meeting safety requirements for any of their vessels,” the commissioner said.
DYC was fined $95,000 for having 19 vessels chartering without commercial licences, he added.
DYC posted on Friday that it was continuing to work very closely with authorities to ensure compliance with regulations.
“The required equipment has been received at our base and is actively being installed while we await updated compliance documentation,” the company wrote.
A “notice of detention” posted on a Moorings boat.(Photo: PROVIDED)
The $55,000 fine for Captains Compass, Mr. Smith said, was levied for “chartering without licences, cruising permits and making false declarations to Customs officers.”
Captains Compass confirmed last week via social media that its boats had been cleared and were ready to sail.
Premier Andrew Fahie said last Thursday that the crackdown was part of his administration’s efforts to ensure that guests and crew stay safe in the territory.
“There were companies disregarding our agreements and conditions put in place to ensure the safety of our visitors and the protection of government’s revenues,” he said. “Vessels which were not authorised to charter were on charter without commercial licences and cruising permits.”
The government “cannot afford to put the lives of the captain, crew and clients in jeopardy and run the risk of having a major maritime accident involving loss of lives in BVI waters,” he said, adding, “This will project a negative image of the BVI commercial recreational sector as an unsafe maritime destination.”
At Friday’s press conference, Mr. Fahie was asked whether the situation could have been handled better so as not to inconvenience tourists and negatively affect their trips. He did not agree that it could have been handled better.
Instead, he replied, “We also have to look at safety. We also have to look at the reputation of the Virgin Islands. We also have to look at the flip side, that is a protection for our stakeholders, private and public.”
If an accident were to happen, he said, “The media will be asking us a different question: ‘Why didn’t you stop this? Why didn’t you adhere to the law?’”
In addition to the violations under Customs laws, some of the detained vessels “currently do not have any status in the Virgin Islands,” according to the government press release of last Thursday.
Without status, duty must be paid unless vessels are commercially licensed, the statement noted. Mr. Smith said Customs gave the companies until April 15 to comply.
If the vessels are not licensed by that date, the duty becomes payable at five percent of their value, he added.
“The combined value of all vessels is in excess of $100 million and the companies must produce a bond of five percent to secure the duties owed,” Mr. Smith said.
He added that the detained vessels “will be secured by bond until they meet the requirements to be offered for hire.”
Peter Twist, vice chairman of the Marine Association of the BVI, declined to comment on behalf of the organisation.