The Coast Guard announced in the Federal Register proposed changes to its regulations for certifying a State’s titling system for undocumented vessels to increase States’ participation in the Vessel Identification System (VIS).
The proposed changes would allow States that have adopted the recommendations of the model Uniform Certificate of Title Act for Vessels to certify their titling provisions with the Coast Guard. Once certified and participating in the VIS, a State is able to confer preferred mortgage status on financial instruments that apply to undocumented vessels, which benefits the owners of those vessels. While many of the proposed changes to the certification guidelines relate to the technical requirements of recording and maintaining titling documentation, the most significant change would be to implement a system of “branding” (permanently marking) titles for vessels that have sustained structural damage. This would help prevent a process known as “title washing,” where severe vessel damage is concealed by transferring the title to a different State.
Comments and related material must be received by the Coast Guard on or before November 22, 2021. Comments sent to the Office of Management and Budget (OMB) on collection of information must reach OMB on or before November 22, 2021.