The U.S. Customs and Border Protection has extended the public comment period for its notice of proposed modification and revocation of ruling letters related to the CBP’s application of the Jones Act.
CBP published the proposed ruling on January 18, 2017, just two days before President Obama left office. It can be found at (opens as pdf in new window): Customs Bulletin (Vol. 51, No. 3, at p. 1).
CBP has extended the comment period by 60 days to April 18, 2017, and will also seek comments on whether a further extension of the comment period beyond April 18 is warranted.
The proposed ruling looks to restore certain aspects of the Jones Act that would prevent non-Jones Act qualified vessels from transporting certain merchandise and vessel equipment between coastwise points by modifying or revoking prior rulings that are inconsistent under the proposed modifications.
Critics of the proposed ruling, such as the International Marine Contractors Association, which is based in the UK and has members with foreign vessels active in U.S. waters, has said the changes would represent a major change in U.S. maritime policy and its effect may prevent foreign flag construction vessels from working in the United States, most notably in places like the Gulf of Mexico’s deepwater oil and gas market where there is a need for highly specialized vessels. The proposals would also affect US flag vessels which are not coastwise qualified, according to the IMCA.
“We understand the drive to protect US tonnage given the difficulties in the PSV market today, but the deep-water construction market represents a very different sector with very different vessels and technologies,” says IMCA’s Chief Executive, Allen Leatt. “It is a truly international market, as no single domestic market can support the heavy investments of these assets. Consequently, there is areal risk to damaging the whole Gulf of Mexico market as the unintended consequences do not seem to have been thought through.”
The IMCA welcomed the CBP’s extra 60 days for the public comment period, saying the extra 60 days would allow it to undertake more research into the economic and technical impact of the changes in policy.
Those who support the proposed ruling however, such as the American Maritime Partnership, the Shipbuilders Council of America, the Offshore Marine Service Association, and certain lawmakers in Washington, say the modifications will close loopholes and restore American jobs.
“The men and women of the American maritime industry commend the U.S. Customs and Border Protection’s efforts to rightfully restore over 3,200 American jobs to the American economy and close loopholes that gave preference to foreign workers and foreign shipbuilding,” said Tom Allegretti, Chairman of the American Maritime Partnership. “We applaud President Trump’s commitment to ‘buy American and hire American,’ and the correct and lawful interpretation of the Jones Act will ensure the preservation of American jobs and maintenance of the U.S. shipyard industrial base, both of which are critical to our economic security and national security.”
The Shipbuilders Council of America and U.S.-based Offshore Marine Service Association (OMSA) echoed the AMP’s statement.
“The Shipbuilders Council of America (SCA) applauds the U.S. Customs and Border Protection’s efforts to close labor loopholes benefiting foreign shipbuilding and reestablishing more than 3,200 American jobs associated with the maritime sector,” said Matthew Paxton, President of SCA. “This correction of past misinterpretations of the Jones Act will enable our shipyards to continue to supply, build, maintain and repair the essential vessels needed by the oil and gas industry.”
“The Offshore Marine Service Association (OMSA) applauds the Administration’s strong step to restore the congressional intent of the Jones Act. This Notice opens a domestic market to U.S. mariners on U.S.-built vessels, owned by U.S. companies,” said OMSA President Aaron Smith. “The offshore service industry is ready, willing, and capable of completing this work, having recently invested $2 billion in U.S. shipyards on vessels tailored to safely completing this work.”
Lawmakers who have supported the proposed ruling include U.S. Senator John Kennedy (R-La), Rep. Duncan Hunter, chairman of the House Subcommittee on Coast Guard and Maritime Transportation, Majority Whip Steve Scalise (R-LA), and Rep. Garret Graves (R-South Louisiana).
“This decision will get Louisiana mariners back to work by restoring the proper treatment of U.S.-built vessels crewed by U.S. citizens in the Gulf of Mexico,” said U.S. Senator John Kennedy (R-La). “The offshore industry is a lifeblood to Louisiana. We need to close loopholes that benefit foreign workers at the detriment of Louisiana mariners. I look forward to working with President Trump on this issue, and I applaud the CBP for taking a positive step that will benefit the lives of many Louisiana families.”
“The Jones Act is a pillar for America’s maritime industry that serves to put this nation’s workers and ingenuity ahead of foreign interests,” added Rep. Duncan Hunter, chairman of the House Subcommittee on Coast Guard and Maritime Transportation. “This decision by CBP is in the spirit of recognizing and upholding the Jones Act. And by closing loopholes that existed to the detriment of American workers, CBP has taken an important step that underscores the extraordinary importance of the Jones Act and its role in strengthening our maritime industry. My hope is that this decision is the start of an even stronger transition in favor of the Jones Act across the entire federal government and I commend CBP for its leadership in taking this action.”
“I applaud the corrective action taken last week by US Customs and Border Protection that supports the rule of law and reinforces the federal government’s compliance with the Jones Act,” said Majority Whip Steve Scalise (R-LA). “This corrective action is the right thing to do for Louisiana workers and will also benefit the American economy. In addition, unlike so many job-killing regulations and rules the Obama Administration issued on its way out the door, this agency ruling from Customs actually reverses some of the economic damage the Obama Administration allowed to take place on its watch. It will help to ensure the oil and natural gas industry in the Gulf, which is vital to local and national economic growth, will continue to have a robust supply of U.S. crews and vessels to strengthen America’s energy security and help bring reliable energy to families across the nation.”
“The corrective actions taken by the CBP return us to appropriate rule of law, help to eliminate unfair advantages of foreign workers and companies, and protect America’s national security interest. This is the right decision for Louisiana’s energy workforce and for America’s energy security,” said Rep. Garret Graves (R-South Louisiana).