Congress members object to CBP Jones Act move
Written by Marine Log Staff
Image (C) Architect of the Capitol
U.S. Customs and Border Protection (CBP) is going ahead with changes in its interpretations of the Jones Act that it first proposed October 23. causing considerable concern in some areas of the maritime industry and causing a bipartisan group of members of Congress to demand action by CBP parent agency, the Department of Homeland Security,
CBP announced the decision to proceed with the changes in a notice in its Customs Bulletin Weekly of December 11, 2019
BLANK ROME COMMENTARY
Law firm Blank Rome says the decision “will substantially alter how certain operations conducted by coastwise and non-coastwise vessels can be conducted offshore in the oil and gas and wind industries. The changes become effective on February 17, 2020 and, says Blank Rome, “stakeholders should examine this decision to determine how it will impact their operations.”
According to Blank Rome, “the notice clarifies CBP’s position on whether certain items constitute ‘vessel equipment,’ which is not ‘merchandise’ and may be transported by non-coastwise qualified vessels. The notice also contains a section clarifying that ‘lifting operations’ are not ‘transportation’ within the meaning of the Jones Act.”
In short, says Blank Rome, the notice “eliminates previous erroneous decisions that allowed non-coastwise qualified vessels to transport items that should have been considered merchandise and not ‘vessel equipment’ under the Jones Act. The Notice also returns CBP to the position that it held for decades that lifting operations may be conducted by non-coastwise qualified vessel.”
Read the rest of the Blank Rome briefing HERE
CONGRESS MEMBERS REACT
The CBP decision has come in for considerable criticism — including a bipartisan group of more than 50 members of Congress who fired off a letter December 16, to Chad Wolf, Acting Secretary, U.S. Department of Homeland Security and Mick Mulvaney, Acting White House Chief of Staff.
Among other things, the letter says:
“While we applaud CBP for attempting to improve enforcement of the Jones Act on the Outer Continental Shelf and finally revoking and modifying letter rulings that allow foreign-flagged vessels to unlawfully transport merchandise within the U.S., we are concerned with significant aspects of CBP’s proposal. Specifically, we object to the portions of the ‘interpretive guidance’ that create non-statutory loopholes to the Jones Act and contradict the rule of law. These aspects will undermine enforcement of the Jones Act, allowing the foreign-flagged vessels who rely upon them to continue taking work from U.S. mariners and shipyard workers – all in U.S. waters, without paying U.S. taxes.
“Moreover, while the process laid out in 19 U.S.C. 1625 is correct for the revocation and modification of letter rulings, CBP does not have the authority to issue definitions that contradict the law. The Jones Act clearly prohibits foreign vessels from engaging in any part of the transportation of merchandise between U.S. points. The responsibility of amending the statute to properly balance U.S. national security with other U.S. interests rests with Congress alone, and no amount of agency-issued ‘interpretive guidance’ or economic analysis by the Administration can change the separation of powers under the Constitution.
“The Jones Act provides for our national, homeland, and economic security. It ensures that American workers in American shipyards build vessels that are manned by American mariners in U.S. waters. Foreign owned and manned vessels have unfairly undercut our domestic maritime industry with low wage maritime vessel and shipyard workers. They do not abide by laws applicable to U.S. ships and mariners and do not have our national security interests at heart. U.S. workers, mariners, and the entire domestic maritime industry have been waiting over a decade for the Jones Act to be properly enforced. Therefore, we strongly believe CBP should proceed with revoking the letter rulings issued in contravention of the law and ensure the remaining components of its proposal do not violate the Jones Act.”
OMSA STATEMENT
Aaron Smith, President and CEO of the Offshore Marine Services Association issued the following statement
“On behalf of thousands of American mariners and shipyard workers, we are disappointed that the U.S. Customs and Border Protection (CBP) has decided to put America second by creating potential loopholes for foreign vessels and crews to unlawfully operate in American waters and take the jobs of American vessels and workers.
“We support the more than 50 bipartisan members of Congress who correctly asserted that only the U.S. Congress can amend the Jones Act. We will be closely scrutinizing CBP’s implementation of these legally dubious loopholes to ensure that CBP follows the law and requires all foreign-flagged vessels to request and receive letter rulings. If CBP will not enforce the Jones Act as enacted by Congress, then it is essential they at least provide transparent documentation of the use of these new loopholes.”
