Clarity Penetrates Bureaucracy's Fog

Our free ride was over. For 15
years, my partner, Brian, and I had been taking summer cruises in
Europe and leaving the boat wherever we ended up, while at the same
time watching the EU take shape and waiting for it to notice us and sic
its tax machinery on us. Occasionally, we dared to hope we'd simply
grandfathered the whole rulebook--but no.

The letter from the French Customs Service came in October 2002: Get Clarity
out of the European Union by February or else. It didn't mention the
option of paying the Value-Added Tax (VAT), simply threatened fines if
we overstayed, and customs had decided to start the 18-month clock
ticking back in July 2001. We had just four months left.

I subsequently spent the entire winter chasing up blind alleys, at
first in search of a comprehensive set of regulations and later for any
scrap of information that would help me know what to expect when the
time came to engage the bureaucracy. What appears below as apparent
officialese is how I imagined the regulations would be written, should
I ever discover them.

The European Union limits the stay of
non-EU-flagged boats to a total of 18 months in all EU waters, after
which the vessel must either leave or pay VAT plus import duty at the
rates prevailing in the country where the payments are made.
Alternatively, if the vessel leaves and visits a non-EU port, it may
then return to the EU for another 18 months.

I briefly envisioned getting a leave of absence from work in order to
put to sea in February. But even a mid-winter dash to Tunisia would
earn us only one free summer of cruising before we'd have to devote
another summer's cruise to sailing the several hundred miles to exit
and re-enter again. Nor was the alternative appealing. VAT plus import
duty could amount to a quarter of the boat's value, and we had no idea
what value would be declared for a 23-year-old one-off boat. We needed
more time.

I called the sympathetic manager of our boatyard. She puffed herself up to formidable mode and called la douane
(customs) to demand a six-month extension, which was granted. We were
safe until my normal arrival in the summer. Thus began a winter of
fretting while trying to obtain reliable information.

My painstakingly crafted letters to la douane,
pleading for guidance as to how the process would go, brought opaque
form-letter replies. Close scrutiny (including faxing them to French
friends for translation) revealed the need for a valuation survey.

In order to establish the value of
the boat for taxation purposes, the boat owner must furnish the
authorities with any relevant documentation, such as purchase records,
builder's contract, government tax records, and so on, and must arrange
for a professional valuation survey to assess current value.

But in which country would we undertake all this? Jimmy Cornell, a CW contributing
editor who apparently thinks nothing of sailing a few thousand miles to
score a bargain, helpfully e-mailed me VAT rates for various countries,
and he recommended Ma-deira, Portugal, as the cheapest. We considered
Spain, which has a VAT rate lower than France's, but for all I knew
valuations might be significantly higher there, erasing any benefit. We
decided to stay put and take our chances. The French agency that has
been doing our periodic insurance surveys for years agreed to do the
valuation survey, but it had never helped a client through this process
and had no idea what would happen after that.

I arrived in France in July with every remotely relevant scrap of paper Clarity had ever generated, including copies of ancient Cruising World
articles, proving we'd been in the EU for well over a decade, and the
yellowing builder's contract, with the all-important bottom line on the
last page.

Usually, on arrival, I embark on an immediate, vigorous clean-up of the winter's mistral-driven grit, but this year, Clarity needed to look derelict for one extra day.

The next morning, as arranged, the surveyor arrived. George was one of
those brisk young professionals whose crisply-ironed shirts withstand
historic heatwaves. He ascended the ladder, stepped gingerly through
the filth and artfully tangled rigging of the cockpit, and joined me
below for our conference. I'm so proud of Clarity,
so used to extolling her virtues, that I felt like a cad pointing out
her shortcomings--her lack of refrigeration, hot water, pressure water,
roller furling; every trace of wear and tear--as though following the
advice of a shady divorce lawyer. Finally, I took a deep breath and
told George what I wanted: a valuation fixed at half her original cost.
His response was a thoughtful, cryptic smile.

For the next two days, while he wrote up his report, I fidgeted;
thousands of VAT dollars hung on his assessment. I passed the time by
calling the nearest customs office, in the neighboring town of Port de
Bouc, to see whether they could handle this sort of affair. Despite
having sent that original letter in October, they said no, that I would
have to go to the regional office in Marseille to file a request for a jauge (admeasurement) with the Service de la Jauge
in that office. I groaned, picked up a train schedule, and called the
Marseille office to make an appointment. They said nonsense, I could
pick up the request form in the Port de Bouc office and mail it. I was
clearly the guinea pig for this whole procedure.

When George arrived to deliver his report, he seemed to want to hand it
up to me and leave, which worried me. I invited him for coffee.
Glancing at his watch, he climbed the ladder. Did he notice how Clarity
now sparkled? I flipped nervously through the pages, and finally came to
the valuation: He'd done exactly as I requested. I let out a huge sigh
of relief. He must have thought my smile too conspiratorial. "No, no,"
he protested, "it simply worked out that way when I did all the
calculations."

I interrogated him about how the rest of the process would go. He
didn't know but made cell-phone calls to various friends, grimaced on
hearing that I might have to bring the boat into conformity with the
famously detailed French safety standards, then relaxed when someone
else told him I wouldn't. Now that we were allies, he even offered to
drive me to Port de Bouc for my first encounter with officialdom.

The Office of Customs will determine
the boat's taxable value based on the valuation survey and supporting
documentation provided by the vessel's owner.

Well, not exactly.

In Port de Bouc, the very official who'd set this whole pageant in
motion with that first letter back in October glanced briefly at my
plump dossier and looked up with evident satisfaction: "I can't help
you," he said.

It turned out he was the same official who'd told me on the phone that
I needed to pursue this in Marseille. I'll call him Mr. Makes
Everything Difficult, a product of the gene pool that spawns
bureaucrats the world over.

"First you must go to a transitaire," he said. "You'll need to hire a broker to negotiate with the transitaire, who will collect the VAT and the import duty. There's one in Fos, one in Istres."

"You mean there isn't one here in Port de Bouc?"

"Oh, yes, right there, on the other side of the canal."

Across the canal, in a furnace of an office at the Auxiliaire Maritime, I met my transitaire.
Patrick--blocky, red- faced, suffering with the heat--greeted me with a
peevish look, as though my arrival were the last straw. Nonetheless, he
promptly launched into my business, and I quickly realized that his
peevishness wasn't directed at me but was the demeanor of someone who'd
been yelled at so often, so undeservedly, in his life that, ever
fearful of rebuke, he'd become a fretful bumbler. While I sat, feigning
calm, he contemplated my documents. He explored his software, emitted
chuffs of frustration. When I sneaked a glance at his screen, I saw he
was actually creating a table in Microsoft Word in which to enter the
facts and figures of my case.

Within a mere hour or so, he'd accepted the surveyor's valuation,
calculated the VAT, ascertained that the import duty (which I'd been
warned might be as much as 6 percent) would be 1.7 percent, and had
come up with an overall bill far lower than what I'd feared. Such was
my gratitude, I wanted to apply a cold compress to his sweating brow.

We'd reached the moment for payment. I took out my bundle of traveler's
checks, which in my planning had seemed like the best choice for a
payment of an unknown amount in a foreign currency.

Patrick regarded this fresh challenge with consternation. He went for
advice and returned to tell me that, because they were in U.S. dollars,
I would have to go exchange them for euros. It was Monday, and all the
banks were closed.

The next morning, I visited every bank in Port de Bouc; none would
change traveler's checks, except for clients--defeating the checks'
purpose, it seemed to me. I phoned the toll-free number on the check
packet: American Express had no office in the region, not even in
Marseille, the third-largest city in France--they were terribly sorry.
I returned to Patrick and flung myself on his mercy. "I have the money,
right here. You want the money. There must be a way." He slunk off to
his superiors, as though to the gallows.

He returned with le patron, a
distinguished-looking gentleman who gave me an appraising look, offered
his hand, asked me a few friendly questions about my favorite French
ports, and agreed to call the agency's bank. Fifteen minutes later he
appeared with a yes, the exchange rate, and calculation of the dollar
amount. I sat right down and signed the requisite dozens of checks,
passing them to Patrick, who, under the boss's watchful eye,
laboriously inscribed each with "AUXILIAIRE MARITIME" in block capitals.

This major hurdle behind us, Patrick handed me the first
official-looking papers I'd earned so far, one of which even said
"Communauté Européene" across the top.

Patrick insisted on driving me the two blocks across the canal back to la douane,
where he gravely presented me to the counter staff as though I were his
protégé. A short, stout woman bustled forward to take charge, and I
quickly understood Patrick's plight in life. She glanced skeptically at
his painfully achieved sheaf of paperwork and blared, "Yes, you have
calculated the value, but not the Customs Office value!" Patrick
absorbed this taunt with resignation. I groaned inwardly, dismayed that
what had been so hard won could be so simply tossed aside.

But wait--she consulted a fat binder of tables and determined that,
because of the boat's age, the tax rate would only apply to 82 percent
of the boat's current value, a tax reduction of nearly 500 euros.
Although this made no sense to me--wasn't the purpose of the survey to
determine the value now, at 23 years of age?--I felt myself begin to
smile.

But wait again--they wouldn't simply refund some of the money I'd paid
only moments before across the canal. No, the refund would take about a
month and would be a check in euros that I had no idea how I would cash.

I noticed a general stirring in the office. As usual, I was catching
only a fraction of the rapid-fire Provençal that was flying about, but
Patrick murmured to me that now came the viewing of the vessel. Three
senior staff in one car, Patrick and I in another, drove in convoy to
the boatyard.

When we got there, the three officials circled Clarity on the ground. I
watched nervously as they exchanged what I thought were knowing
glances. Was she too clean, too gorgeous? I encouraged them aboard, but
only one even climbed the ladder for a peek into the cockpit. They were
waiting to see which way the boss was leaning. Finally he said to me,
"It's a beautiful boat, worth much more than you are saying,"--he
tortured me for a beat--"but OK."

Yes! They departed, and I opened a Côtes du Rhône.

The next morning, I returned to Patrick, who'd figured out a way of
giving me a cash refund. I thanked him and trudged back across the
canal to present myself before Mr. Makes Everything Difficult and file
a request for la jauge.

After VAT and import duty have been
paid, the vessel's volume must be measured to determine the amount of
French annual navigation tax due. If it is a one-off vessel, the owner
must request a measurement to be performed by the government measuring
service. Any documents that may pertain to this measurement, such as
builder's drawings, specifications, etc., must be submitted with this
request.

Mr. M.E.D. actually seemed surprised, and newly respectful, to see me
back in his office, unaccompanied by a broker. He filled out the
request form for me, drew up a list of possible documents I should
enclose with the request, and assured me that, once I had applied for la jauge,
I could safely head off on my summer cruise. I had already accomplished
enough to satisfy any officials I might encounter while sailing; la jauge would take place after I returned. That afternoon I posted a fat packet to La Service de la Jauge.

Brian and I had a lovely cruise, and when we returned to the boatyard, there was a letter waiting from La Service de la Jauge:
No measurer's visit would be necessary; they'd used the plans to arrive
at a volume, and they'd already sent the measurement certificate to the
customs office in Port de Bouc. The next day, I returned to la douane for the last time.

Once the navigation tax has been
fixed, the vessel is issued a Passeport du Navire Etranger (Passport
for a Foreign Vessel), which allows the vessel indefinite free passage
throughout the European Union.

Mr. M.E.D. calculated the tax due, wrote out his findings in longhand
on the precious Passeport, hammered it with rubber stamps, shook my
hand, and wished me bon voyage. Back at the boatyard, I waved the Passeport triumphantly at the manager, who let out a cheer. The office staff gathered for an impromptu celebration: Clarity's Passeport was the first they'd ever seen.

A delicious final twist: Mr. M.E.D. calculated the navigation tax at 74
euros per year. Fair enough, I thought; I used to pay more than that to
the state of Connecticut. But wait--this triggered another regulation:
If the tax amounted to less than 78 euros per year, it needn't be paid,
ever!

Vive les regulations!

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William Storandt is looking forward to a little more Clarity in his future, now that he's dispersed the VAT cloud.