Vessel documentation is a national form of registration. It is one of the oldest functions of Government, dating back to the 11th Act of the First Congress. Documentation provides conclusive evidence of nationality for international purposes, provides for unhindered commerce between the states, and admits vessels to certain restricted trades, such as coastwise trade and the fisheries. Since 1920, vessel financing has been enhanced through the availability of preferred mortgages on documented vessels.
US Coast Guard documentation of a vessel is considered the preferred method of recording ownership of your boat with the government. As a national form of registration, you receive benefits that would not otherwise be available under state registration and is generally considered a more prestigious form of registry.
Customs officials universally recognize a US Coast Guard Certificate of Documentation as proof of ownership and authentication of the boat’s origin. If you travel to foreign waters, your Certificate of Documentation immediately provides you with the protection and the status that comes from the US Government. This also facilitates a smooth entry and clearance at foreign ports.
The US Coast Guard holds strict requirements to ensure each documented vessel will have a clear and irrefutable history of ownership. A record of all transactions, including bills of sale, mortgages, and satisfactions, are kept by the National Vessel Documentation Center as the “chain of title.” Establishing this chain of title enables owners of documented vessels to expedite transfers of ownership and refinancing. Documentation of a vessel also becomes helpful when tracking stolen vessels across state lines with the federally documented record of ownership
Each boat documented with the US Coast Guard is given an “official number” which remains the same throughout the life of the boat. The owner is required to place the number on the interior structure of the hull. For vanity’s sake, marking the interior of the hull provides a more desirable appearance. For practicality purposes, it is simple to have one number assigned for the duration of ownership that is accessible while aboard the boat.
The National Vessel Documentation Center provides a trusted chronicling of ownership and lien recordation that is preferred by lenders. For this reason, when financing your vessel, most lenders will require the boat is US Coast Guard documented. If the lender does not require USCG documentation, they may still provide better terms if you agree to have the boat documented with the Coast Guard. The “First Preferred Ships Mortgage” filed with the Coast Guard is acceptable collateral and enforceable throughout the U.S., its territories, and some foreign countries.