US abandons Jones Act amendments - a win for international shipping

US authorities have abandoned plans to tighten Jones Act coastal shipping rules – and it’s all thanks to the coordinated efforts of international government administrations, US energy firms and shipping bodies, in which the UK Chamber played its part.

America’s Customs and Border Protection (US CBP) on January 18 announced a plan to revoke past US CBP rulings that allow non-US flagged offshore vessels to carry out specialised services in specific circumstances for US offshore energy projects. 

Under the Jones Act, vessels carrying cargo between American ports must be US-built, owned by US citizens and crewed by US seafarers.

Vessels that are built, owned or crewed by foreigners are permitted operate in intra-US waters provided they are not carrying “merchandise” or passengers, according to the US CBP rulings. The rules set out various scenarios where carrying equipment that is specifically for use in offshore operations is not classified as “merchandise”. 

Because of this, the proposed Jones Act amendments would have particularly impacted specialist ships supplying services to offshore hydrocarbon and wind projects, such as pipe/cable-laying vessels; dive support vessels, subsea construction/IRM vessels and heavy lift vessels.

A portion of these vessels are operated by UK companies and/or those with UK interests. Some UK Chamber members have specialist offshore vessels that are operating or have operated in American waters. The chamber made early representations to the UK Department for Transport and the Foreign and Commonwealth Office (FCO) in order to protect interests of its members.  

When the US CBP solicited industry comments on its proposal to end these exemptions, it received an overwhelmingly negative response from overseas government bodies, the international shipping industry and US energy companies that rely on these specialist services. 

The revocations would have effectively forced non-US flagged vessels to stop operating immediately, which would have caused havoc for American energy companies. Offshore energy projects would have had to suddenly stop, which would have affected many Americans working in the offshore energy sector. 

Working with the International Marine Contractors’ Association (IMCA), the UK Chamber and its European counterparts jointly raised concerns with the European Community Shipowners' Associations (ECSA) and the International Chamber of Shipping (ICS). This spurred the European Commission and the Consultative Shipping Group (CSG) into action to write respectively to the US CBP to express the industry’s concerns. The UK Government is a member of CSG, which is a collective body of national government administrations with significant maritime interests. The 18 CSG member countries together represent more than half the world’s operated tonnage.

The proposal to revoke the rulings to the Jones Act was formally withdrawn by the US CBP in its Customs Bulletin Weekly on Wednesday this week. The withdrawal represents a win for international ship operators and shows the gains that can be made when shipping trade bodies work together with government.

Nevertheless, the UK Chamber says work needs to continue to make sure longstanding concerns about the rulings from various stakeholders can be addressed in the US interest.

“Although this development is very much welcomed, engagement with the US CBP and other stakeholders on this matter will need to continue, in order to achieve a sustainable long-term outcome that is in mutual interests of the US economically, and overseas operators,” says Anna Ziou, policy manager of the UK Chamber’s offshore panel.