Power of Attorney VS Letter of Authorization

When do I need a PoA (Power of Attorney) and when a LoA (Letter of Authorization)?

If legal procedures are already complicated, when they are moved to the yachting industry, that works with vessels that sail between many countries with different jurisdictions can be an odyssey.

The activity of a yacht has to be linked either to the administration (application for licenses, payment of taxes,) as well as with private entities (purchase of goods for the vessel...). Normally yacht agents located in the ports are the ones who proceed with the arrangement of licenses or any other kind of paperwork on behalf of the yacht and the owner.

For this matter, the responsible agency needs a valid authorization of representation. Because in other case, it would cause on the refusal of the requested license or administration procedures.

When an agent asks for an authorization: What are the requested requirements regarding its content? Do we always have to provide a Power of Attorney (PoA) or just a letter of authorization (LoA)? 

If you are somehow familiar with the legal management of your yacht, surely the words PoA and LoA have some meaning for you. If this is all new to you, Alfons Esteve, Evolution’s International Maritime Lawyer who is specialized in the superyacht industry, briefly explains everything you need to know regarding the Power of Attorney (PoA) and the Letter of Authorization (LoA).

A Power of Attorney (PoA) is a document by which we authorize another person to represent us or act on our behalf before an administration or company. This document is issued before a notary who will verify that the grantor of the power of attorney is the person, he/she claims to be.

As a rule, the PoA is necessary when the agent of a port represents us at customs, port authority, banks, tax authorities, ... and acts on our behalf.

If the PoA is signed in one country and has to be used in another we have to comply with another requirement which is called Apostille. 

The Apostille consists of placing an annotation on the PoA (signed by a notary) that will certify the authenticity of the signature of the public documents.

And now, the question... Is the apostille valid for all countries? In other words, is the apostille that a Notary did in my country will be recognized in all countries of the world? No, it’s not. The apostille is valid in those countries that have signed the Hague Convention of 5-10-1961. To know if an apostilled PoA, is valid in the country where we want to use it, we have to look at the following web site https://www.hcch.net/es/states/hcch-members.

There are different types of PoAs. Here you can check the most important ones:

(i) General Power of Attorney: A wide list of powers are established: Representation before administrative procedures, in a judicial process, buying and selling, management of our business, collection of goods....

(ii) Specific Power of Attorney: The powers are limited, for example: to represent somebody in an export before customs.

(iii) Limited in time: A clause is established, for example, the Power of Attorney will be in force for one year.

When getting a PoA, it’s interesting have it two languages. In the language of the country where it is signed, and in the language of the country in which it will be used. This can reduce future translation needs.

We already know what a PoA is, but what about the LoA (Letter of Authorization)? What’s the main difference?

There are situations in which the PoA is not necessary. An example would be when the yacht agent has to represent us in front of a Company. In this case, the Letter of Authorization (LoA) would be enough. The Letter of Authorization is a document in which another person is granted the power to do something on your behalf. This document does not involve a notary. It’s an authorization between private individuals and its validity is limited.

For more information or advice on legal procedures and documentation please contact Alfons at legal@evolutionagents.com.

Evolution Yacht Agents is the leading-edge team of professionals dedicated to providing assured and quality support and services to superyachts, crew and yacht managers in Spanish waters.

A full range of superyacht specialized services includes charter license & legal advice, TPA (Vat exemption), customs & logistics operations, provisions & interior supplies, deck & engineering supplies and crew & VIP services.