Illegal Charter Crackdown: What Captains Need to Know

By Chris Buseman

From sea to shining sea, the United States Coast Guard (USCG) is cracking down on illegal charters. Whether it’s a fishing trip in the Gulf of Mexico, a sightseeing tour in the Pacific Northwest or multiple voyages on the Chicago River and Lake Michigan, the USCG is making a concerted effort to improve boater safety by ensuring compliance with federal boating regulations.

As a licensed mariner, you’re responsible for the safety of your passengers and crew. If you make a mistake that could endanger your clients and result in a USCG investigation — such as operating an illegal charter — you could be at risk for significant fines and suspension or revocation of your license. Additionally, the reputational damage associated with the announcement of any charges, fees or even jail time could significantly harm your business and career. In this blog, we’ll update you on this ongoing initiative and share best practices to help keep your passengers and business safe.

How is the Coast Guard Responding to Illegal Charters?

If you’ve noticed an increase in illegal charter reports coming out of USCG sectors around the country, you’re not alone. The USCG’s efforts at curbing illicit charters have made headlines and drawn the public’s attention to this important safety issue.

In 2020 and early 2021, USCG Sector Miami alone had an “almost 100% increase” in illegal charter terminations, according to an article in Proceedings, the magazine of the U.S. Naval Institute. In November 2022, multiple federal and state agencies banded together to create the USCG-led Gulf Coast Illegal Charter Task Force (GCIC), which targets illegal charters in Alabama, Mississippi and Florida waters.

While the popular waters of the Gulf Coast have attracted significant attention from the USCG, likely due to the number of seasonal tourists in the region, it’s not the only place they’re looking for illegal charters. No matter where these dangerous charters cast off or set anchor, the USCG is scouring waterways and racking up fees for the noncompliant.

In addition to the creation of a specialized task force and enhancing patrols, the USCG is also seeking the public’s help as part of this initiative. In media interviews and public safety events, the USCG is pushing passengers to improve their safety and expose noncompliant captains by asking for the following before stepping foot on a vessel:

• A Coast Guard-issued Merchant Mariner’s Credential.
• The vessel’s certificate of inspection if more than six passengers are present; if the ship carries six or fewer passengers, passengers should ask to see the voluntary Uninspected Passenger Vessel (UPV) safety exam decal.
• A comprehensive safety plan, safety devices and required equipment for all persons onboard.
• Proof of enrollment in a drug- and alcohol-testing program.

If these essential safety and compliance materials are not provided, the USCG urges customers to cancel their journey and report the vessel immediately.

Risks of Illegal Charters: Costly, Damaging, Deadly

Operating an illegal charter isn’t just dangerous — it can be deadly. In 2022, the USCG reported a three-year average of 108 commercial mariner deaths and significant injuries; during the same period, commercial passengers experienced 58 deaths and significant injuries.

While the report doesn’t say exactly how many of those deaths or injuries resulted from illegal charters, an unfortunate number of real-life examples illustrate the grave danger posed by these operations. In 2018, an unlicensed Florida yacht captain was sentenced to prison for his role in operating an illegal charter following the death of a 25-year-old passenger who was caught and killed by the propellers while swimming. The yacht’s owner was also charged for his involvement, which includes allegations that he knowingly allowed a drug-impaired and unlicensed captain to operate his yacht.

As a captain, taking on the risk of operating an illegal charter can seriously impact your business and career. Illegal charters don’t just increase your risk of death, injury and serious criminal charges; they can also result in:

• Significant fines and penalties – The USCG takes illegal charters seriously, and its orders are not simple suggestions. Boat owners and operators of unlawful passenger-for-hire cruises may be subject to civil penalties of $60,000 or more. Charters that violate a federal Captain-of-the-Port Order may be subject to civil penalties of $111,000. Depending on the severity of the incident, owners and operators can also face criminal fines and prison time.
• Suspension or revocation of your license – As the issuing entity, the USCG has the authority to suspend or revoke your issued credentials, licenses or documents. Suspension and revocation (S&R) proceedings are overseen by Administrative Law Judges (ALJ). Complex and confusing for the uninitiated, these proceedings can be costly and time-consuming.
• Reputational harm – Word of mouth is a powerful marketing opportunity. It can also severely damage your business. If news gets out that you acted illegally, passengers should rightly avoid your business and seek safer alternatives. Additionally, if your illegal charter results in the death or injury of passengers or crew, you could become the subject of numerous media reports regarding the incident.

Ensuring Your Charters are USCG Compliant

Every time your vessel leaves the dock, you and your mariners become responsible for the safety and health of all passengers. This includes taking steps to ensure your charter is compliant with all necessary laws and requirements, such as:

• Keeping your license and inspections up-to-date – Should the USCG board your vessel during a charter, they'll need to see your Merchant Mariner's Credential (MMC) and inspection certificate. The MMC is an important “all-in-one” credential that serves as your qualification document, certificate of identification and certificate of service, according to Military to Maritime. Keep your MMC and certificate of inspection in a safe, secure location and be ready to present it to the USCG and passengers when asked.
• Staying informed – Don’t be left adrift in the face of changing maritime industry laws and regulations. Like any other industry, governments and regulatory agencies make changes to improve the safety of the maritime community. Make sure you’re on top of these updates by subscribing to industry publications or joining a professional association or group.
• USCG Licensing Simplified – Apply or Renew USCG License - A great potential resource to stay on top of your licensure is MM-SEAS.
• Knowing event-specific risks – Did you know offshore fishing charters need special permits depending on where passengers want to fish? The South Atlantic and Gulf of Mexico are known for their fishing opportunities. If your passengers are eager to catch their own Marlin or Snapper-Grouper, you must first secure the proper permits. These permits ensure all fishermen have a safe, legal and sustainable experience. To learn more about fishing regulations, read this article by NOAA Fisheries.

By educating yourself on the USCG’s ongoing crackdown on illegal charters and following these tips, you can remain compliant with their essential safety regulations. But there is another tool at your disposal to help you safeguard your career and license: Mariner Liability Insurance.

With this comprehensive coverage from 360 Coverage Pros, you'll have access to a 24-hour legal hotline when you need guidance or interact with a regulatory authority, plus coverage for license protection and defense costs arising from USCG disciplinary actions. If you become the subject of an investigation or claim, having the proper representation can spell the difference between a reasonable legal outcome and a career-ending one. Qualified applicants receive an instant certificate of insurance. To learn more about Mariner Liability Insurance or schedule a free consultation, visit 360CoveragePros.com/mariner-liability-insurance.