DHS Extends Jones Act Waiver and Broadens Geographic Area Covered, But Many Questions Still Unanswered

By Eric Lee and J. Michael Cavanaugh (Holland & Knight) – Acting Secretary of Homeland Security Elaine Duke has issued an extension of the original Sept. 8 Jones Act waiver to Sept. 22. The extended waiver, dated Sept. 11, 2017, but only recently posted by the U.S. Department of Homeland Security (DHS), allows foreign or U.S. non-coastwise eligible tankers and barges to carry refined petroleum products – including gasoline, diesel and jet fuel – between U.S. ports in response to hurricanes Harvey and Irma, provided the vessels are loaded by Sept. 22, 2017.

The Secretary has also significantly expanded the geographic scope of the waiver. The original waiver covered shipment of products from “New York, Pennsylvania, Texas, and Louisiana to South Carolina, Georgia, Florida, and Puerto Rico.” The expanded waiver covers shipments of products from “New York, New Jersey, Delaware, Maryland, Pennsylvania, New Mexico, Texas, Louisiana, Mississippi, Alabama, and Arkansas to Florida, Georgia, South Carolina, North Carolina, Virginia, West Virginia, and Puerto Rico.”

One of the major unknowns about the original waiver was whether it was limited to vessels physically loading and discharging in a port located in one of the named states, or if it extended to vessels loading cargo that originates in or is destined for a named state but is physically laden to or discharged in another state not on the list. The addition of several states that have no deepwater ports (e.g., Arkansas and West Virginia) and that have no marine ports at all (New Mexico) strongly suggests that the cargo origin rather than the state of the load port is what governs, but this is not expressly clear.

Many interested parties have raised the foregoing questions and others in calls and emails to DHS and U.S. Customs and Border Protection (CBP), but there have been no answers yet.

Other pending questions for interpretation of the scope of the waiver include whether “laded on board a vessel through and including September 22” means that the cargo has to be completely received aboard before midnight local time on the last day. If the vessel timely commences loading and continuously loads cargo, but the loading extends beyond midnight, will the vessel still be in compliance? Also, if a vessel arrives at the load terminal before Sept. 22 and gives notice of readiness with reasonable time to load before the end of the waiver period but due to weather, port congestion or other circumstances beyond the carrier’s control, the vessel cannot get alongside and commence lading before the end of the waiver period, will the vessel still be in compliance?

CBP has also issued two administrative bulletins – a Jones Act Waiver Guidance Update and an Update for Vessel Entrance and Cargo Clearance of Jones Act Waivers – asking persons seeking waivers or who have already booked non-Jones Act vessels in reliance on the waivers to contact CBP, but these notices do not provide any details as to CBP’s interpretation of the current waiver terms and conditions.

Read more: https://www.hklaw.com/publications/DHS-Extends-Jones-Act-Waiver-to-Sept-22-and-Broadens-Geographic-Area-Covered-09-13-2017/.

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