(p) No abstract of title of any vessel issued in accordance with paragraph (0) of this section shall be recorded by any collector of customs, nor shall any endorsement be made in the index when such an abstract is furnished to any person.

(Sec. 40, 40 Stat. 902, as amended, sec. 30, subsecs. C, H, 41 Stat. 1000, 1002, sec. 2, 43 Stat. 948; 46 U. S. C. 838, 921, 926, 1012) [13 F. R. 7918, Dec. 18, 1948, as amended by T. D. 52155, 14 F. R. 885, Feb. 26, 1949; T. D. 53336, 18 F. R. 5404, Sept. 9, 1953; T D. 53399, 18 F. R. 8686, Dec. 24, 1953]

§ 3.34 Issue of temporary document upon sale. (a) When a vessel entitled to be documented changes ownership and is in a port other than the home port designated by the new owner, a temporary document may be issued by the collector at the port where she is.

(b) If application is made to the collector at the home port designated by the new owner and all requirements of law are complied with except the issuance of the document, he shall authorize the collector at the port where the vessel then is to issue a temporary document to the vessel.

(c) If application is made to the collector at the port where the vessel then is, the same proceedings shall be had as are required by law at the vessel's home port, except that the bill of sale shall not be recorded at the port where the vessel is. If the bill of sale is presented to the collector at the port where the temporary document is issued, it shall be noted on his record and then forwarded to the collector at the home port designated by the new owner. The recording fees shall be collected by the issuing collector and forwarded with the bill of sale to the collector at such home port.

(d) The bill of sale shall be recorded by the collector at the home port designated by the new owner, but only after that collector has received from the collector at the former home port and re

corded the abstract of title of the vessel as required by § 3.33 (m).

(e) The temporary document shall be surrendered within 10 days after the arrival of the vessel within the district to which she belongs.

(R. S. 4159, 4160, sec. 30, subsecs. C, H, W, 41 Stat. 1000, 1002, 1006, as amended, sec. 2, 43 Stat. 948; 46 U. S. C. 29, 30, 921, 926, 983, 1012) [13 F. R. 7919, Dec. 18, 1948, as amended by T. D. 52155, 14 F. R. 885, Feb. 26, 1949]

§ 3.35 Sale abroad. A documented vessel which has been sold or transferred in whole or in part to a citizen while such vessel is outside the limits of the United States shall be entitled on her first arrival thereafter to all the privileges of a vessel of the United States if a new document is obtained within 5 days after she arrives at the first port in the United States.

(R. S. 4166, sec. 434, 46 Stat. 711, as amended; 19 U. S. C. 1434, 46 U. S. C. 35) [13 F. R. 7919, Dec. 18, 1948]

§ 3.36 Sale or charter to an alien. (a) When a documented vessel is sold in whole or in part, even in trust or confidence, to one who is not a citizen, its document shall be delivered (1) within 7 days after the sale to the collector at the port where the vessel is, if it is in the United States, or (2) within 8 days after the first arrival of the master in the United States to the collector at the port of his first arrival, if the vessel is at sea or not in the United States at the time of sale.23

(b) The master and all watch officers of a documented vessel chartered to one who is not a citizen 23 shall be citizens. (R. S. 4146, as amended, 4172, sec. 9, 39 Stat. 730, as amended; 46 U. S. C. 23, 41, 808) [13 F. R. 7919, Dec. 18, 1948]

23 See footnote 21, § 3.32.

24"(a) A valid mortgage which, at the time it is made, includes the whole of any vessel of the United States (other than a towboat, barge, scow, lighter, car float, canal boat, or tank vessel, of less than two hundred gross tons), shall, in addition, have in respect to such vessel and as of the date of the compliance with all the provisions of this subdivision, the preferred status given by the provisions of section 953 of this title, if—

(b) A preferred mortgage may not be placed upon any vessel which is not a documented vessel, nor upon any vessel of less than 200 gross tons which is a towboat (including tugs and other vessels used for towing), barge, scow, lighter, car float, canal boat, or tank vessel. It may cover more than one vessel, but may not be limited to a part of any vessel.

(c) A mortgage which includes property other than a vessel or vessels may not acquire a preferred status unless it provides for the separate discharge of such other property.

"(1) The mortgage is endorsed upon the vessel's documents in accordance with the provisions of this section;

"(2) The mortgage is recorded as provided in section 921 of this title, together with the time and date when the mortgage is so endorsed;

"(3) An affidavit is filed with the record of such mortgage to the effect that the mortgage is made in good faith and without any design to hinder, delay, or defraud any existing or future creditor of the mortgagor or any lienor of the mortgaged vessel;

"(4) The mortgage does not stipulate that the mortgagee waives the preferred status thereof; and

"(5) The mortgagee is a citizen of the United States and for the purposes of this section the Reconstruction Finance Corporation shall, in addition to those designated in sections 888 and 802 of this title, be deemed a citizen of the United States.

"(b) Any mortgage which complies in respect to any vessel with the conditions enumerated in this section is hereafter in this chapter called a 'preferred mortgage' as to such vessel.

"(c) There shall be indorsed upon the documents of a vessel covered by a preferred mortgage

"(1) The names of the mortgagor and mortgagee;

"(2) The time and date the indorsement is made;

"(3) The amount and date of maturity of the mortgage; and

"(4) Any amount required to be indorsed by the provisions of subdivision (e) or (f) of this section.

"(d) Such indorsement shall be made (1) by the collector of customs of the port of documentation of the mortgaged vessel, or (2) by the collector of customs of any port in which the vessel is found, if such collector is directed to make the indorsement by the collector of customs of the port of documentation, and no clearance shall be issued to the vessel until such indorsement is made. The collector of customs of the port of documentation shall give such direction by wire or letter at the request of the mortgagee and upon the tender of the cost of communica

(d) A preferred or ordinary mortgage may be placed on a vessel already covered by a preferred or ordinary mortgage. (Sec. 30, subsec. D, 41 Stat. 1000, as amended; 46 U. S. C. 922) [13 F. R. 7919, Dec. 18, 1948]

§ 3.38 Record and endorsement of preferred mortgages and related instruments. (a) Every preferred mortgage presented for recording shall be accompanied by three identical copies and, in the case of a blanket mortgage, one additional identical copy for each vessel in excess of one covered by the mortgage. All copies except one, which shall be inserted by the collector in his record of preferred mortgages, shall be certified by the collector and delivered to the mortgagor 25 after the record has been made. The original shall be returned to the mortgagee and a receipt obtained.

tion of such direction. Whenever any new document is issued for the vessel, such indorsement shall be transferred to and indorsed upon the new document by the collector of customs.

"(e) A mortgage which includes property other than a vessel shall not be held a preferred mortgage unless the mortgage provides for the separate discharge of such property by the payment of a specified portion of the mortgage indebtedness. If a preferred mortgage so provides for the separate discharge, the amount of the portion of such payment shall be indorsed upon the documents of the vessel.

"(f) If a preferred mortgage includes more than one vessel and provides for the separate discharge of each vessel by the payment of a portion of the mortgage indebtedness, the amount of such portion of such payment shall be indorsed upon the documents of the vessel. In case such mortgage does not provide for the separate discharge of a vessel and the vessel is to be sold upon the order of a district court of the United States in a suit in rem in admiralty, the court shall determine the portion of the mortgage indebtedness increased by 20 per centum (1) which, in the opinion of the court, the approximate value of the vessel bears to the approximate value of all the vessels covered by the mortgage, and (2) upon the payment of which the vessel shall be discharged from the mortgage." (46 U. S. C. 922)

25 "The collector of customs upon the recording of a preferred mortgage shall deliver two certified copies thereof to the mortgagor who shall place, and use due diligence to retain, one copy on board the mortgaged vessel and cause such copy and the documents of the vessel to be exhibited by the master to any person having business with the vessel, which may give rise to a maritime lien upon the vessel or to the sale, conveyance, or mortgage thereof. The master of the vessel shall, upon the request of any

(b) The affidavit of the mortgagor required by subsection D (a) (3), of the Ship Mortgage Act, 1920,26 if not included in the mortgage, shall be presented with each preferred mortgage submitted for recording and shall be retained by the collector." Any acknowledgment of such affidavit valid under the laws of the State where made may be accepted.

(c) No vessel covered by a preferred mortgage shall be granted clearance at any port until the preferred mortgage endorsement required by subsection D (c) of the Ship Mortgage Act, 1920,28 has been placed on her marine document.

(d) In addition to the matters required by § 3.33 (c), the collector shall note on the index on customs Form 1332, continued if necessary on customs Form 1332-A, the day, hour, and minute that (1) the proposed mortgage endorsement is placed on the marine document, and (2) such notation was made on the index.

(e) When a marine document bearing a preferred mortgage endorsement is 29 and a new document is surrendered issued before the mortgage is satisfied or the vessel released, the endorsement shall be placed on the new document.

(f) For the purposes of this section and the related statutes, an assignment of a preferred mortgage shall be regarded in all respects as a new preferred mortgage.

(g) A notice of claim of lien upon a vessel shall be recorded only if the vessel is covered by a preferred mortgage and if the notice has been acknowledged." Any acknowledgment valid under the laws of the State where made may be

such person, exhibit to him the documents of the vessel and the copy of any preferred mortgage of the vessel placed on board thereof." (46 U. S. C. 923)

26 See footnote 24, § 3.37 (a).

en

"The collector of customs has no duty to ascertain whether there is any cumbrance on a vessel for which a preferred mortgage is presented to him for recording. 28 See footnote 24, §3.37 (a).

29 See footnote 19, § 3.30 (a).

"The collector of customs of the port of documentation shall, upon the request of any person, record notice of his claim of a lien upon a vessel covered by a preferred mortgage, together with the nature, date of creation, and amount of the lien, and the name and address of the person. Any person who has caused notice of his claim of lien to be so recorded shall, upon a discharge in whole or in part of the indebtedness,

accepted.

No customs officer or employee is authorized by section 486, Tariff Act of 1930, or Customs Delegation Order No. 2 (T. D. 53195, 18 F. R. 832), to take such acknowledgments.

(h) Each notice of claim of lien and certificate of discharge of lien presented to a collector shall be recorded in a book to be kept for that purpose and indexed on customs Form 1332, continued if necessary on customs Form 1332-A.

(i) When a preferred mortgage has been discharged in whole or in part and a certificate of such discharge has been filed with the collector of customs at the home port of any vessel covered by the discharge, the collector at the home port, or the collector at the port where the vessel is, at the direction of the collector at the home port, shall endorse the fact of such discharge upon the document of the vessel. No clearance shall be granted to such vessel until such endorsement has been made."1

(Sec. 30, subsecs. C, D, E, G, H, O, W, 41 Stat. 1000, as amended, 1001, 1002, 1004, as amended, 1006; 46 U. S. C. 921-923, 925, 926, 961, 983) [13 F. R. 7919, Dec. 18, 1948, as amended by T. D. 52155, 14 F. R. 885, Feb. 26, 1949; T. D. 53268, 18 F. R. 3092, May 29, 1953] § 3.39 Certificate of ownership. The certificate of ownership provided for in subsection I of the Ship Mortgage Act, 1920, shall be executed on customs Form 1330.

32

(Sec. 30, subsecs. I, W, 41 Stat. 1002, 1006; 46 U. S. C. 927, 983) [13 F. R. 7920, Dec. 18, 1948]

forthwith file with the collector of customs a certificate of such discharge. The collector of customs shall thereupon record the certificate." (46 U. S. C. 925 (a))

31 "The mortgagor, upon a discharge in whole or in part of the mortgage indebtedness, shall forthwith file with the collector of customs for the port of documentation of the vessel, a certificate of such discharge. Such collector of customs shall thereupon record the certificate. In case of a vessel covered by a preferred mortgage, the collector of customs at the port of documentation shall (1) indorse upon the documents of the vessel, or direct the collector of customs at any port in which the vessel is found, to so indorse, the fact of such discharge, and (2) shall deny clearance to the vessel until such indorsement is made." (46 U. S. C. 925 (b))

32 "Each collector of customs shall permit records made under the provisions of this chapter to be inspected during office hours, under such reasonable regulations as the collector may establish. Upon the request of any person the collector of customs shall furnish

33

§ 3.40 Frontier enrollment and license. (a) Vessels under frontier enrollment and license may engage in foreign or coastwise trade or the fisheries in waters covered by the license.

(b) In similar cases frontier enrollments shall bear the same endorsements as are placed on registers. When the endorsement required by § 3.2 (c), class 1, or by § 3.2 (d) (1) is placed on a frontier enrollment and license, the word "Coasting" in the license shall be deleted, and the word "Fisheries" inserted in lieu thereof.

(c) A foreign-built vessel which is owned by a citizen but which was not so owned and documented prior to February 1, 1920, or which was not owned by the United States on June 5, 1920, shall not be granted a frontier enrollment and license, but shall be registered. (See § 3.42 (f).)

(d) A yacht of less than 20 net tons enrolled and licensed to navigate the waters of the northern, northeastern, and northwestern frontiers otherwise than by sea shall not be required to surrender its enrollment and license and obtain a license when proceeding to ports in the United States, its Territories, or possessions, whether by sea or otherwise. (R. S. 4318, as amended, 4321, as amended; 46 U. S. C. 258, 263) [13 F. R. 7920, Dec. 18, 1948]

him from the records of the collector's office (1) a certificate setting forth the names of the owners of any vessel, the interest held by each owner, and the material facts as to any bill of sale or conveyance of, any mortgage covering, or any lien or other incumbrance upon, a specified vessel, (2) a certified copy of any bill of sale, conveyance, mortgage, notice of claim of lien, or certificate of discharge in respect to such vessel, or (3) a certified copy as required by subdivision (c) of (46 section 926 of this title. U. S. C. 927)

* *

See 4.98 of this chapter for fees to be collected.

33 "Any vessel of the United States, navigating the waters on the northern, northeastern, and northwestern frontiers, otherwise than by sea shall be enrolled and licensed in such form as other vessels; such enrollment and license shall authorize any such vessel to be employed either in the coasting or foreign trade on such frontiers, and no certificate of registry shall be required for vessels so employed. Such vessel shall be, in every other respect, liable to the regulations and penalties relating to registered and licensed vessels." (46 U. S. C. 258)

§ 3.41 Transfer from frontier enrollment and license. (a) Except as stated in § 3.40 (d), when a vessel under frontier enrollment and license proceeds to sea, directly or via an intermediate port, she shall surrender her frontier document. If bound on a foreign voyage partly by sea, she shall be granted a register. If proceeding from one United States port to another via the St. Lawrence River and the sea, she shall be granted only a register," but if she proceeds via the Hudson River to any United States port without going to sea, she shall retain her frontier enrollment and license.

(b) The collector at a seaport may issue a frontier enrollment and license. (R. S. 4318, as amended; 46 U. S. C. 258) [13 F. R. 7920, Dec. 18, 1948, as amended by T. D. 53336, 18 F. R. 5404, Sept. 9, 1953]

§ 3.42 Registry of foreign-built vessels. (a) The application on customs Form 1320 for an official number for a foreign-built vessel (class 9) shall state, in addition to the information therein required, the name of the former owner. (b) In lieu of the builder's certificate required for a vessel built in the United States, the application shall be accompanied by a photostatic or certified copy of the vessel's foreign register and of its foreign measurement certificate, if there be one, together with a duly authenticated translation of any such evidence that may be written in a foreign language. Satisfactory evidence shall be produced to establish that the transfer of registry has the approval of the foreign government concerned. If the vessel was built for the applicant and never under foreign registry, the builder's certificate shall be produced but no approval of a foreign government shall be required. If the vessel was not built for the applicant, satisfactory evidence of ownership shall be produced as in the case of a vessel built in the United States. There shall also be produced a certificate of the merchant marine officer in charge that the vessel is safe to carry dry and perishable cargo, and if the vessel is required to possess a certificate of inspection," it shall be produced.

(c) The applicant shall submit a certificate stating that:

34 In such case, she is required by Canadi. an regulations to enter and clear at Montreal.

35 See 3.54.

(1) The transfer of the vessel conveyed complete and unconditional title and ownership to the purchaser;

(2) There is no agreement or understanding reserving to the vendor, or to any person who is not a citizen, any interest in the vessel or its operation, or any right of control thereof;

(3) The transfer is intended to be permanent and not temporary, no right to repurchase the vessel is reserved to the vendor, and there is no understanding for its retransfer:

(4) The transfer was not made during a voyage of the vessel or while it was in a blockaded port; and

(5) The transfer was not made to avoid the consequences to which a vessel of a belligerent is exposed.

(d) The papers filed in connection with the application for documentation in accordance with the requirements of this section and any other pertinent information shall be forwarded to the Commissioner of Customs for consideration before the granting of a document to the vessel. Except as otherwise provided for in this section, the usual requirements for registry shall be complied with.

(e) No foreign-built vessel owned and documented prior to February 1, 1920, by a citizen nor one owned by the United States on June 5, 1920, and sold to and owned by a citizen shall engage in the American fisheries, but it is otherwise unlimited as to documents and trade so long as it continues in such ownership. When a marine document is issued to such a vessel, the following notation shall be made thereon:

As amended by section 5 of the Panama Canal Act and by the act of August 18, 1914, and sections 22, 27, and 38 of the Merchant Marine Act of June 5, 1920, as amended. This vessel shall not engage in the American fisheries.

If the vessel is owned by a corporation and is entitled to engage in the coastwise trade, the notation required by § 3.2 (d) shall also be made on the document.

(f) A foreign-built vessel which is owned by a citizen, but which was not so owned and documented on February 1, 1920, or which was not owned by the United States on June 5, 1920, is limited to the foreign trade. A foreign-built vessel admitted to American registry and thereafter sold foreign in whole or in part or placed under foreign registry is limited, upon afterward becoming the

268016-54- -7

property of a citizen, to the foreign trade. When a register is issued to a vessel of either such class, the following notation shall be made thereon:

As amended by section 5 of the Panama Canal Act, by the act of August 18, 1914, by section 27 of the Merchant Marine Act of June 5, 1920, as amended, and by the act of May 24, 1938, entitling the vessel to engage only in trade with foreign countries or the islands of Guam, Tutuila, Wake, Midway, and Kingman Reef. This vessel shall not engage in the coastwise trade or the American fisheries.

(g) A foreign-built vessel which has been purchased from the Maritime Administration of the War Shipping Administration by a citizen shall not engage in the American fisheries, but it is otherwise unlimited as to documents and trade so long as it continues in such ownership. When a marine document is issued to such a vessel, the following notation shall be made thereon:

As amended by section 9 of the Shipping Act, 1916, as amended. This vessel shall not engage in the American fisheries.

If the vessel is owned by a corporation, the notation required by § 3.2 (d) shall also be made on the document.

(R. S. 4132, as amended, secs. 2, 9, 39 Stat. 729, as amended, 730, as amended, secs. 22, 27, 41 Stat. 997, 999, as amended; 46 U. S. C. 11, 13, 802, 808, 883) [13 F. R. 7920, Dec. 18, 1948, as amended by T. D. 53268, 18 F. R. 3092, May 29, 1953; T. D. 53336, 18 F. R. 5404, Sept. 9, 1953; T. D. 53399, 18 F. R. 8686, Dec. 24, 1953]

§3.43 Documentation of Americanbuilt foreign-flag vessels. (a) In the case of an American-built foreign-flag vessel which has never been documented as a vessel of the United States, a builder's certificate shall be produced unless a certificate of record has been issued to the vessel previously. A certificate of admeasurement shall also be produced unless a certificate of record has been issued and the tonnage of the vessel has not since been changed. Application for an official number shall be made in accordance with § 3.42 (a).

(b) In the case of an American-built foreign-flag vessel which was documented as a vessel of the United States before being placed under foreign flag, the production of a builder's certificate shall not be required, nor shall the production of a certificate of admeasurement unless the tonnage of the vessel has been changed. The official number originally awarded to the vessel shall be

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