In a landmark legal decision issued on July 15, 2010 by the Supreme Court of Cassation - Criminal Section in Rome, Italy, a legal team led by John Leonida at London Law firm Clyde & Co LLP quashed as unlawful the five month long arrest of a Cayman-flagged superyacht seized by the Italian custom authorities (Guardia di Finanza) last February.

John Leonida's team, which also included James Lawson of the London law team at Hill Dickinson, established that the flag of a yacht chartering in Italy is of no relevance and that it is perfectly possible for a non-EU flagged vessel, no matter how it is owned provided the owning company has a business established in the EU, to legitimately operate a charter business in European waters.

Tax liability arises upon the subject which has the obligation to pay and declare duties hence where a smuggling offence is alleged tax liability must refer to the laws applied by the State of incorporation of the owning company and not to the State of the flag.

The full reasoning of the court should be available by the middle of August and is awaited by many watching this case.

Superyacht Business/Michael Howorth, 21 July 2010