The CBP Proposal
Customs and Border Protection, an agency under the Department of Homeland Security, has the responsibility for enforcing the Jones Act. It interprets the law through a ruling letter process through which industry writes and describes an upcoming transportation activity and asks whether it is allowed under the Jones Act. The problem has been that only companies hoping to use foreign vessels have any reason to seek letter rulings and the companies that write the letters tend to describe the proposed activities in such a way as to almost ensure that it will be allowed. Over time, these ruling letters have shifted interpretations of the Jones Act away from the original intent of the law and frequently in ways that contradict earlier interpretations.
That is precisely what happened in the case of vessels carrying cargo offshore to be installed at offshore energy sites. Early ruling letters made it clear that, while foreign vessels can be used to
install cargo, only U.S. flag vessels can
transport the cargo from shore to the offshore site. However, later ruling letters contradicted those first decisions, creating such confusion that today foreign vessels are frequently used to move cargo that is going to be installed offshore. OMSA has long been concerned over this erosion of the law.
On July 17, 2009, CBP attempted to address this problem, click here for details. It proposed to revoke or modify roughly 20 previous ruling letters. In the proposal, CBP said that its rulings had strayed from the original intent of the Jones Act, stressing that:
- While foreign vessels can install cargo at the energy site, only U.S. flag vessels can transport it from a U.S. port to the offshore location.
- Foreign vessels can't hide behind a claim that the cargo they are installing is "equipment of the vessel," a term meaning the cargo is for the operation or safety of the vessel.
- Foreign vessels can only carry cargo offshore for use in repair operations under very limited conditions.
During the 30 day comment period called for in the CBP revocation process, the agency received some 140 letters running more than 700 pages in length. However, the Department of Homeland Security had concerns over the process and the impact and withdrew the proposal in mid-September, saying CBP would review the comments and issue a new proposal in the near future.
