CFR

187.323—What are the procedures for perfection of security interests?

(a) A State must specify, at a minimum, the following procedures for perfection of a security interest in a vessel titled in that State:

(1) Submission of an application for new or amended certificate of title on which the secured party must be noted.

(2) Surrender of any outstanding certificate of number and any outstanding title issued by another State.

(3) Surrender of the Certificate of Documentation of any documented vessel that is to be numbered and titled by the State.

(4) Submission of an authenticated copy of any foreign registry of the vessel and evidence of deletion from the foreign registry of the vessel that is to be numbered and titled by the State.

(5) Determination of the date of perfection.

(b) A State must recognize, under 46 U.S.C. 31322(e)(1), that, if a vessel is covered by a preferred mortgage when an application for a certificate of title is filed in that State, then the status of the preferred mortgage covering the vessel is determined by the law of the jurisdiction in which the vessel is currently titled or documented.

(c) A State must recognize, under 46 U.S.C. 31322(d)(2), that, if a vessel titled in a State is covered by a preferred mortgage, that mortgage will continue to be a preferred mortgage even if the vessel is no longer titled in the State where the mortgage, instrument, or agreement granting a security interest perfected under State law became a preferred mortgage.

(d) A State must recognize, under 46 U.S.C. 31322(d)(1), the preferred status of a mortgage, instrument, or agreement granting a security interest perfected under State law covering the whole of a vessel titled in a State after the Commandant has certified that State's titling system and the State participates in VIS with respect to the vessel.

(e) The State must provide that the perfection procedures required to be established under this section do not apply to—

(1) A lien given by statute or rule of law to a supplier of services or materials for the vessel;

(2) A lien given by statute to the United States, a State, or a political subdivision thereof;

(3) A lien arising out of an attachment of a vessel;

(4) A security interest in a vessel created by a dealer or manufacturer who holds the vessel for sale, irrespective of whether the vessel is titled;

(5) A security interest claimed in a vessel's proceeds, as defined in the Uniform Commercial Code in effect in the State, if the security interest in the vessel did not have to be noted on a vessel's title in order to be perfected; or

(6) Any vessel for which a certificate of title is not required in the State.

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