The MARAD Small Vessel Waiver
Program of the U.S. Build Requirement
Generally, the “coastwise trade” laws prohibit the transportation of passengers or merchandise between points in the United States in any vessel other than one:
- built in the U.S.;
- documented with the U.S. Coast Guard; and
- owned by persons who are U.S. citizens.
The Passenger Vessel Services Act authorizes the U.S. Maritime Administration (“MARAD”) to waive the U.S. build requirement in certain situations. These waivers are known as Small Vessel Waivers. To be eligible for a Small Vessel Waiver, the vessel must:
- be owned by a U.S. citizen or organization;
- be at least three years old;
- intend to carry passengers only (not cargo);
- carry no more than 12 passengers at a time when in service; and
- satisfy a series of separate U.S. Coast Guard requirements.
Application for the waiver is available online. It takes about three months for a final decision to be made. Once a waiver is obtained, it becomes part of the vessel’s documentation and stays with the vessel if it is sold.
MARAD will not issue a waiver if it will cause an undue adverse effect on vessels built in the United States and already operating in a particular geographic location.
Disclaimer: This outline provides only a general overview of these issues. Please consult with legal counsel regarding application of the law to your particular circumstances.

Fred Robinson is the principal attorney at Robinson Law Firm, www. frobinsonlawfirm.com. He practices exclusively in yacht law, representing clients on matters involving vessel acquisition, ownership structures, usage, and taxation.