Compliance Basics for a Yacht Brokerage

Scope and a Warning

Yacht brokerage sits across several regulated areas at once: anti-money-laundering law, client money rules, sanctions screening, consumer protection, tax and data protection. Which of them bind you depends on where your brokerage is established, where the boat lies, where it is registered, and who the parties are — and those are frequently four different countries.

This guide is an orientation, not legal advice. Get your own obligations confirmed by a professional in your jurisdiction, write them into a documented procedure, and apply the procedure to every deal rather than to the ones that feel suspicious.

Why Yacht Sales Attract Attention

High-value, internationally mobile, easily re-registered, frequently owned through corporate structures, and often paid for across borders. That is a description of a yacht and also a description of what a money-laundering supervisor looks for. Assume your transactions are of interest, and behave accordingly.

Know Your Customer

Identify and verify both sides — the seller who instructs you and the buyer whose funds you handle. A workable baseline:

Individuals — government photo identification, and separate evidence of residential address. Verify against the document, not a description of it.
Companies — incorporation documents, register extract, directors, and the beneficial owners above the relevant threshold. Follow the ownership chain until you reach natural persons; a structure that cannot be followed to a natural person is a decision point, not a formality.
Representatives — evidence that the person signing is authorised to bind the owner, whether by board resolution or power of attorney.
Screening — check both parties against the sanctions lists that apply to you, and for politically exposed status. Screen again before completion; lists change, and a deal can take months.

Record when you checked, what you saw, and who did the checking. Keep the evidence for the retention period your regime requires — five years after the end of the relationship is a common figure. Where the rules allow reliance on another regulated party's checks, remember that reliance rarely transfers the liability.

Source of Funds

Identity answers who; source of funds answers where the money came from, and it is the part most often skipped. Ask for it as a routine step, early, framed as standard procedure, so it does not read as an accusation later.

Patterns that warrant a closer look, and sometimes a report:

Payment from a third party who is not the buyer and has no obvious connection.
Funds arriving from a jurisdiction with no link to the buyer or the boat.
Payment split into many transfers, or an offer of cash.
A buyer indifferent to price, condition or survey, and interested mainly in speed.
An overpayment followed by a request to refund the difference elsewhere — the classic yacht-brokerage fraud, covered in our guide on scam awareness.
An owner or buyer who resists identification entirely.

Where your regime requires a suspicious activity report, remember that tipping off the client is generally an offence in itself. Know in advance who in your firm files a report and how.

Client Money and Escrow

If you hold deposits, you are handling other people's money and the rules around it are unforgiving:

Hold client funds in a designated client account, separate from the brokerage's own money, with a bank that will confirm the designation in writing.
Never use client money for working capital, not even briefly.
Reconcile the account on a fixed schedule and keep the reconciliations.
Release funds only in the circumstances the signed agreement specifies, and get the instruction in writing from the party entitled to give it.
Confirm the interest position in the agreement — who earns it, and who declares it.

Verify payment instructions out of band before any transfer. Invoice and account-detail fraud, where a criminal intercepts an email thread and substitutes bank details, is the single most expensive incident type in this industry. Telephone the known number from your own records, not a number in the email.

Where you would rather not hold funds at all, an independent escrow agent is a legitimate answer, and increasingly a preferred one.

VAT and Import Status

In European markets the tax status of a boat is a material fact about the asset, not paperwork. Get it right and evidence it:

Establish whether VAT or import duty has been paid, and obtain the documents — the original invoice, a T2L or equivalent, or the import entry.
Understand that the status can be lost, for instance by extended periods outside the customs territory or by a change of ownership structure.
Know the treatment of a sale to a non-resident buyer, an export sale, and a sale of a boat lying outside the territory. These differ, and the difference is often a large sum.
Temporary admission for a visiting non-resident owner has time limits and conditions; a boat sitting under it is not a VAT-paid boat.

State the status in the listing in the terms the documents support, and never as an assurance you cannot evidence. Where the position is complex, say that it is and point the buyer to their own adviser — that sentence has saved more brokers than any disclaimer.

Title, Registration and Encumbrances

Before completion, establish that the seller can actually transfer clean title: check the register for the flag, look for a registered mortgage or charge, and get a written undertaking to discharge anything outstanding at completion. For a boat with finance, arrange the payoff and the discharge as part of the completion mechanics rather than trusting it to follow.

Data Protection

A brokerage holds identity documents, addresses, financial information and correspondence for people who are not its customers — the other side's buyer, a surveyor, a beneficial owner. Where GDPR or an equivalent regime applies, you need a lawful basis for each of those, a stated retention period, security appropriate to the sensitivity, and the ability to answer a subject access request.

The practical minimum: do not keep passport scans in a shared mailbox, do not keep them forever, and know which of your suppliers process personal data on your behalf.

Advertising and Consumer Rules

Descriptions must be accurate and must not mislead by omission. Where you sell to a consumer rather than between businesses, additional protections may apply — including in some jurisdictions rules on distance selling and on unfair terms. Disclaimers such as "details believed correct but not guaranteed" reduce exposure; they do not licence a description you know to be wrong.

Insurance and Accreditation

Carry professional indemnity cover sized to the transactions you handle, and check that it covers client money and cyber-enabled fraud. Membership of a recognised association brings a code of practice, a complaints route and, for many buyers, the reason they chose you. Verify that your own members' registrations are current — buyers do check.

Summary

Identify and screen both parties, follow corporate ownership to natural persons, and keep the evidence.
Ask for source of funds as routine, early, and know your reporting route.
Keep client money segregated, reconciled and released only on written instruction.
Verify every payment instruction by telephone on a number you already hold.
Evidence VAT and import status; never state a position you cannot document.
Confirm clean title and discharge any registered charge at completion.
Hold personal data lawfully, securely, and for a stated period.

Client identity documents, deal paperwork and signed contracts all live against the deal on this platform, in private storage, rather than in a shared mailbox — which makes the record above something you can produce on request. See what the platform does for brokerages.