[Code of Federal Regulations]
[Title 46, Volume 2]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 46CFR67.31]

[Page 347]
 
                           TITLE 46--SHIPPING
 
   CHAPTER I--COAST GUARD, DEPARTMENT OF HOMELAND SECURITY (CONTINUED)
 
PART 67_DOCUMENTATION OF VESSELS--Table of Contents
 
       Subpart C_Citizenship Requirements for Vessel Documentation
 
Sec. 67.31  Stock or equity interest requirements.

    (a) The stock or equity interest requirements for citizenship under 
this subpart encompass: Title to all classes of stock; title to voting 
stock; and ownership of equity. An otherwise qualifying corporation or 
partnership may fail to meet stock or equity interest requirements 
because: Stock is subject to trust or fiduciary obligations in favor of 
non-citizens; non-citizens exercise, directly or indirectly, voting 
power; or non-citizens, by any means, exercise control over the entity. 
The applicable stock or equity interest requirement is not met if the 
amount of stock subject to obligations in favor of non-citizens, non-
citizen voting power, or non-citizen control exceeds the percentage of 
the non-citizen interest permitted.
    (b) For the purpose of stock or equity interest requirements for 
citizenship under this subpart, control of non-fishing industry vessels 
includes an absolute right to: Direct corporate or partnership business; 
limit the actions of or replace the chief executive officer, a majority 
of the board of directors, or any general partner; direct the transfer 
or operations of any vessel owned by the corporation or partnership; or 
otherwise exercise authority over the business of the corporation or 
partnership. Control does not include the right to simply participate in 
these activities or the right to receive a financial return, e.g., 
interest or the equivalent of interest on a loan or other financing 
obligations.
    (c) For the purpose of this section, control of a fishing industry 
vessel means having:
    (1) The right to direct the business of the entity that owns the 
vessel;
    (2) The right to limit the actions of or to replace the chief 
executive officer, the majority of the board of directors, any general 
partner, or any person serving in a management capacity of the entity 
that owns the vessel;
    (3) The right to direct the transfer, the operation, or the manning 
of a vessel with a fishery endorsement.
    (d) For purposes of meeting the stock or equity interest 
requirements for citizenship under this subpart where title to a vessel 
is held by an entity comprised, in whole or in part, of other entities 
which are not individuals, each entity contributing to the stock or 
equity interest qualifications of the entity holding title must be a 
citizen eligible to document vessels in its own right with the trade 
endorsement sought.

[CGD 89-007, CGD 89-007a, 58 FR 60266, Nov. 15, 1003, as amended by 
USCG-1999-6095, 65 FR 76575, Dec. 7, 2000; USCG-2004-18884, 69 FR 58346, 
Sept. 30, 2004]

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