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AML Obligations in high-value yachting: A positive development for the industry

13/08/2025

The world of luxury yachting – with its multi-million-euro vessels, glamorous clientele, and global reach – has long been associated with exclusivity and opulence. In recent years, however, it has also come under increased scrutiny for its potential misuse by criminals to launder money or hide illicit wealth. To address these risks, authorities in Monaco, France, and across the EU are imposing Anti-Money Laundering (AML) obligations on yacht brokers, VAT agents, and other professionals in the high-value yachting industry. While these requirements introduce additional costs and compliance steps, they are ultimately a positive development for the industry. Strong AML practices help safeguard the sector’s reputation, provide comfort to legitimate clients, and even offer a competitive marketing edge – all while ensuring compliance with legal mandates to avoid severe penalties. In this article, we explore why embracing AML obligations is beneficial for all stakeholders in the yachting world, from brokers and owners to regulators and advisors.



A High-Risk Sector Under Scrutiny

Luxury yachts are not only symbols of wealth – they have also proven attractive for money laundering due to their high value and mobility. In fact, superyachts frequently appear in financial crime cases worldwide. Notorious examples include the Equanimity, a 90-meter yacht that fugitive financier Jho Low bought with $250 million stolen from Malaysia’s 1MDB fund, and the 95-meter Indian Empress seized after its owner (businessman Vijay Mallya) was accused of fraud and money laundering. Such cases have exposed how easily illicit funds can be sunk into floating assets far from prying eyes. Unlike real estate, which is fixed in one jurisdiction, a yacht can be owned via an offshore “shell” company, registered under a flag of convenience, and moved from port to port – making tracing its true owner and funding more complex. It is therefore no surprise that international watchdogs rightly consider the yachting industry high-risk for money laundering and corruption.

Regulators have taken note. Monaco, for example, conducted a fresh national risk assessment in 2022 and found that yachting had become the principality’s top financial-crime vulnerability, citing a “significant” exposure to money laundering, weak customer due diligence, and a previously lukewarm commitment to compliance. In response, Monaco explicitly brought those involved in “the sale or rental of pleasure boats” under formal AML program requirements for the first time. This was a revolutionary shift for an industry that had largely avoided such scrutiny in the past. SICCFIN (now AMSF) – Monaco’s financial intelligence unit – even published detailed guidance outlining the risks of illicit finance in the yachting sector and urging robust Know-Your-Customer (KYC) practices. Updated guidance from the AMSF is expected soon.

The European Union has likewise moved to close the loopholes. In 2024, the EU adopted a new AML legislative package (including the 6th AML Directive and an AML Regulation) that extends customer identification and reporting obligations to traders of high-value goods – explicitly including yachts, luxury cars, and private aircraft. The rationale, as stated in the EU law, is that “watercraft in the higher market segments are vulnerable to misuse for money laundering given their high value and transportability”. Criminals have been known to use luxury assets to obscure the origins of dirty money, moving them across borders or into offshore accounts beyond easy reach of authorities. By bringing yacht brokers and similar intermediaries into the regulated fold, authorities aim to ensure transparency about the ownership and funding of these assets, thereby choking off a channel for illicit finance. In practical terms, this means yacht brokers, dealers, and even VAT agents facilitating yacht purchases must conduct due diligence on their clients, verify identities and beneficial owners, scrutinize the source of funds, and report any suspicious transactions.

These measures are not before time. Industry studies and enforcement reports have shown that oversight was sorely needed. Transparency International noted a few years ago that awareness and compliance with AML rules in the superyacht sector were remarkably low, even as the sector boomed. Tellingly, officials in Monaco found that an analysis of clients in the yachting business showed “one in eight is a politically exposed person” (PEP) – i.e. a government or public official with higher corruption risk – and warned that the true proportion could be even higher once professionals properly identify all ultimate owners. Red flags like these underscore why regulators globally (from Monaco’s AMSF to EU authorities) have put the luxury yachting world under the microscope. The message is clear: yachting is a high-risk sector for money laundering, and stronger AML controls are both justified and non-negotiable.



Building Trust and Safeguarding Reputations

For legitimate players in the yachting industry – the honest yacht brokers, diligent VAT agents, reputable owners and their advisors – the new AML obligations can actually be a blessing in disguise. By weeding out bad actors and adding transparency to transactions, these rules help protect the reputation of the industry as a whole. Clients who buy, sell, or charter yachts through compliant firms gain peace of mind that they are dealing with above-board counterparties, not unwittingly transacting with fraudsters, drug traffickers, tax evaders, corrupt or sanctioned individuals. In a marketplace built on luxury and trust, this assurance is invaluable.

From the yacht owners’ perspective, knowing that brokers and agents will verify the identity and background of all parties provides comfort that their mega-yacht won’t end up moored next to one owned by a notorious criminal – or worse, get entangled in an asset seizure because of a tainted past owner. It also means the ownership structures (often complex companies or trusts) behind these yachts are vetted for legitimacy. If an owner ever decides to sell their vessel, having proper documentation of the yacht’s provenance and the funds used can smooth the sales process and avoid delays caused by banks or lawyers raising compliance concerns.

Crucially, most legitimate clients have come to expect KYC checks as a normal part of doing business. Wealthy clients are used to compliance requests nowadays and they or their family offices will normally have a well prepared set of documents to support their source of wealth and funds. They will be aware of the legal obligations on professionals, having already experienced such checks from financial institutions that they work with, and will be willing to share such information with regulated professions subject to confidentiality provisions. Wealthy clients who operate in international business or finance will see AML due diligence as a sign of a professional operation. By contrast, if a prospective customer refuses to disclose basic information or gets evasive about the source of their wealth, that is a major red flag. Industry professionals increasingly realize that those reluctant to provide KYC details may have some reasons for not disclosing it and that a broker should be prepared to walk away from the deal rather than risk facilitating a dubious transaction. Far from scaring off good clientele, strict AML compliance actually reassures reputable clients that they are dealing with a conscientious broker who values integrity over a quick commission.

Enhanced due diligence and the exchange of information between industry players also protects the intermediaries themselves – the brokers, lawyers, accountants, tax advisors and others who facilitate yacht transactions. These professionals face legal consequences and reputational damage if they unknowingly aid in laundering illicit funds. Performing thorough background checks and documenting the source of funds is not a “sterile exercise” or mere box-ticking; it is, as experts say, a “helpful tool to prevent bad surprises” down the line. Verifying that the money used to purchase or charter a yacht actually comes from the person or company named on the contract (and identifying the true ultimate beneficial owner) can save a firm from serious liability in the future. There have been instances where, years after a yacht sale or charter, authorities investigate and trace illicit funds, potentially implicating facilitators who failed to do proper checks. By screening clients and keeping robust records at the outset, yacht brokers and their advisors create an audit trail that proves they complied with the law and acted in good faith. This protects their businesses from legal sanctions and helps uphold the integrity of the sector.

Some intermediaries hesitate to share information on their direct clients with other professionals (eg other brokers, tax advisors, lawyers, fiscal representatives) due to legitimate concerns over solicitation of their clients. These concerns should be managed through strict enforcement of non-solicitation and confidentially agreements between the parties, as well as the use of charter agreements and sales and purchase agreements that integrate the latest AML obligations to protect all parties, rather than restricting access to information that can otherwise be used to protect the reputation of the industry.

In short, robust AML practices build trust. They give honest yacht owners confidence that their brokers and agents are acting diligently. They give brokers confidence that the clients they represent are who they claim to be and that the funds changing hands are clean. They give banks and insurers confidence that they can provide services to the yachting industry without undue risk. Notably, prior to recent reforms, some banks had become increasingly reluctant to open and maintain accounts for the yachting industry. Compliance efforts are beginning to address this and restore banks’ trust. By embracing compliance, the industry safeguards its reputation and ensures that a few bad headlines about “yachts and dirty money” do not spoil the image for the vast majority of law-abiding participants.
Key benefits of AML obligations for the industry’s reputation and clients include:

  • Clean Clientele and Peer Assurance: Thorough vetting means that those who own or use yachts are reputable individuals, not criminals. Owners can take pride in belonging to a community with high standards, and clients can comfortably refer business to compliant brokers knowing all parties are screened.

  • Protected Brand Image: Firms that rigorously enforce AML policies demonstrate corporate responsibility. This proactive approach protects the brand’s reputation and financial interests. It shows that the yachting business is not a lawless Wild West but a mature, accountable industry.

  • Confidence for Financial Partners: When brokers and dealers have strong AML controls, banks, insurers, and credit institutions are more willing to work with them. This reduces the risk of account closures or refusal of services that could occur if the sector were deemed too risky.

  • Peace of Mind for Advisors: Lawyers, auditors, and tax advisors involved in yacht deals can operate with confidence that their clients’ affairs are in order. This makes transactions smoother and reduces the chances of embarrassing surprises (like discovering mid-transaction that a buyer is on a sanctions list or under investigation). Ultimately, all stakeholders – from yacht crew managers to corporate service providers – benefit from the legal clarity that AML compliance brings to ownership structures and payments.

By safeguarding against criminal abuse, AML obligations elevate the entire yachting industry’s credibility. In a realm where reputation is everything, that’s a net positive outcome which far outweighs the administrative costs of compliance.


A Competitive Edge for Compliant Businesses

Embracing AML obligations isn’t just about avoiding risk – it can also provide a competitive advantage. Forward-thinking yacht brokers and service providers are turning their compliance culture into a selling point and marketing tool. They proudly advertise that they adhere to the highest standards of due diligence, positioning themselves as trusted partners for ultra-high-net-worth clients who demand discretion and legality. In doing so, these firms differentiate themselves from less diligent rivals.

How does compliance translate into marketing appeal? Consider the perspective of a wealthy individual or family office looking to purchase or charter a superyacht. This client will likely prefer to work with a broker or agent who can confidently demonstrate that “all clients are vetted and all transactions are above board.” It signals professionalism and protects the client’s own reputation by association. No principled yacht owner wants their name in the news due to a broker’s shady deal with a sanctioned oligarch, or to have a corrupt official sleeping onboard in “their cabin” because their yacht is chartered through a broker who is less vigilant. By fully complying with AML rules, a brokerage can assure clients that they won’t face such risks.

Some tangible ways compliance-oriented companies can leverage this include:

  • Highlighting Trusted Status: Weave compliance into their brand story and marketing documents. Obtaining certifications or memberships (for instance, in professional associations that promote best practices) and displaying these credentials to show the firm is at the forefront of compliant operations.

  • Client Education: Publishing thought leadership (like blogs, whitepapers, seminars) on AML and tax compliance in yachting to inform clients. This not only markets the firm’s expertise but also helps clients understand the value of doing things “the right way.”

  • Partnering with Regulators and Experts: Engaging with regulators or well-known legal experts as advisors can bolster credibility. It shows the company is serious about meeting regulatory expectations, which can attract clients who seek long-term stability in their yachting investments.

  • Positive Word-of-Mouth: Satisfied clients who went through a smooth, transparent yacht transaction are likely to recommend that broker to peers. Over time, a roster of only reputable clientele becomes self-reinforcing – bad actors will steer clear of stringent checks, while good actors will gravitate towards them. This creates a virtuous cycle enhancing the firm’s standing in the market.

In essence, compliance can be “good business.” It transforms what might seem like a bureaucratic hassle into a value proposition: trust. And in the high-value world of superyachts, trust is as important as the quality of the yacht itself. By fully integrating AML best practices into their operations, yacht brokers and related service providers not only meet their legal duties but also signal to the market that they operate at a higher standard – something clients and partners will reward.

In many ways, AML compliance in yachting is about preserving what makes this industry special: the allure of luxury untainted by criminality, the excitement of global travel supported by legitimate wealth, and the pride of ownership without shadow of doubt. Stakeholders from yacht owners and brokers to lawyers, auditors, and tax advisors all have a role in upholding these standards. Those who champion compliance are not just ticking a regulatory box – they are strengthening the very fabric of the industry. High-value yachting will always carry some inherent risk (as any big-money business does), but with robust AML measures in place, it can confidently continue to flourish as a playground for the rich and a legitimate enterprise for professionals. In the end, doing the right thing also becomes the smart thing, and that is a positive development for everyone who loves the world of yachting.
 

Read more here about Compliance obligations in the Yachting Industry: Requirements in Monaco, France, and the EU
 

At Rosemont Yacht Services in Monaco we understand the intricacies of the yachting industry, and can advise on appropriate yacht ownership structuring and yacht administration. We can assist clients in responding to compliance requests because we understand complex business structures commonly used for estate planning purposes.

Rosemont International companies can help guide professionals through their AML obligations and assist with putting on place the necessary tools to ensure your businesses are compliant and your clients are protected. Contact us at p.brigham@rosemont-mc.com



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