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[Federal Register Volume 89, Number 237 (Tuesday, December 10, 2024)]
[Notices]
[Pages 99261-99263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-28996]

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FEDERAL MARITIME COMMISSION

[FMC 2024-0008]

Closure of Investigation Into Conditions Affecting United States 
Carriers in Connection With Canadian Ballast Water Regulation in the 
United States/Canada Great Lakes Trade

AGENCY: Federal Maritime Commission.

ACTION: Notice of closure of investigation.

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SUMMARY: The Federal Maritime Commission (Commission) has closed its 
investigation, initiated pursuant to chapter 423, into conditions 
created by the Government of Canada (Canada) in connection with 
regulation of ballast water management systems that may adversely 
affect the operation of United States carriers in the United States/
Canada Great Lakes trade. Although sufficient short-term improvements 
have been made to the conditions under review, the Commission's 
parallel long-term investigation of those conditions pursuant to 
chapter 421 will remain open.

FOR FURTHER INFORMATION CONTACT: For questions regarding this Notice, 
contact David Eng, Secretary; Phone: (202) 523-5725; Email: 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Introduction

    On May 22, 2024, the Federal Maritime Commission (Commission) 
initiated an investigation, pursuant to 46 U.S.C. 42302, of whether 
conditions created by the Government of Canada (Canada) in connection 
with regulation of ballast water management systems adversely affected 
the operation of United States carriers in the United States/Canada 
Great Lakes trade, in particular the carriers operating vessels that 
were to become subject to regulation in September 2024, within the 
meaning of 46 U.S.C. chapter 423

[[Page 99262]]

(Foreign Shipping Practices) (46 U.S.C. 42301-42307). With respect to 
those vessels, Canada has now granted exemptions from the regulation, 
or issued determinations that exemptions were not needed. As a result, 
the Commission has determined to close this investigation but to keep 
open its parallel investigation pursuant to 46 U.S.C. chapter 421 
(Regulations Affecting Shipping in Foreign Trade) (46 U.S.C. 42101-
42109) in order to address potential longer-term issues involving 
Canadian ballast water management regulation.

II. Summary of Status of Investigation

    In 2020, the Commission opened an investigation under 46 U.S.C. 
chapter 421 following a petition by the Lake Carriers Association 
(LCA). See FMC Docket No. 20-10. That petition alleged that Canadian 
regulation set to take effect in September 2024 would create conditions 
unfavorable to shipping by requiring U.S. vessels to install new 
ballast water management systems. It became apparent that only a small 
group of U.S. Lakers built after 2008 would be affected by the Canadian 
regulation in 2024, with about 50 older Lakers not subject to it until 
2030. See Investigation into Conditions Affecting United States 
Carriers in Connection with Canadian Ballast Water Regulation in the 
United States/Canada Great Lakes Trade, FMC-2024-0008, 89 FR 44979 (May 
22, 2024) (May 2024 Notice of Investigation).
    It also became apparent that the U.S. Environmental Protection 
Agency (EPA), in its rulemaking to implement the Vessel Incidental 
Discharge Act (VIDA), would likely issue rules as to ballast water 
management equipment that would be less restrictive than those of 
Canada. See May 2024 Notice of Investigation, 89 FR 44979. In October 
2024, the EPA did issue such rules. Vessel Incidental Discharge 
National Standards of Performance, 89 FR 82074, 82094-82095 (Oct. 9, 
2024).
    Meanwhile, in May 2024 the Commission on its own motion initiated a 
chapter 423 investigation into whether Canadian ballast water 
management regulation in the Great Lakes adversely affected the 
operation of United States carriers in violation of 46 U.S.C. 42302(a). 
See May 2024 Notice of Investigation, 89 FR 44979. Under the 120-day 
time limit set by 46 U.S.C. 42302(c), the initial deadline for the 
Commission to complete the chapter 423 investigation was in September 
2024.
    In response to the May 2024 Notice of Investigation, the Commission 
received 14 comments. The Canadian government and those representing 
the interests of Canadian carriers, as well as those representing 
environmental interests, opposed the potential imposition of sanctions. 
On the other hand, those representing the interests of U.S. carriers 
and workers were supportive of such measures.
    In late July 2024 Transport Canada, the responsible Canadian 
agency, made available to U.S. carriers a procedure for seeking 
exemptions to the relevant ballast water management requirements, 
although the Commission understands that a comparable process had been 
available to Canadian carriers much earlier. See Procedure to request 
an exemption to install Ballast Water Management Systems under Ballast 
Water Regulations for foreign-flagged vessels in Canadian waters, 
Transport Canada (July 25, 2024) (Exemption Procedure), available at 
https://tc.canada.ca/en/marine-transportation/marine-safety-management-system-tp-13585-e-tier-ii-procedures/tier-ii-procedure-request-exemption-install-ballast-water-management-systems-under-ballast-water-regulations-foreign-flagged-vessels-canadian-waters. At the time this 
detailed exemption procedure for U.S. carriers was established, there 
was relatively little time to complete the application process before 
the relevant compliance date of the Canadian rule, which was September 
8, 2024.
    Accordingly, also in September 2024, the Commission extended the 
time for decision in its chapter 423 investigation by 90 days, to 
December 18, 2024. Extension of Time for Decision in Investigation Into 
Conditions Affecting United States Carriers in Connection With Canadian 
Ballast Water Regulation in the United States/Canada Great Lakes Trade, 
89 FR 74273 (Sept. 12, 2024) (September 2024 Notice). At the same time, 
the Commission established a new comment period to gather more 
information on the apparent disparity between the exemption processes 
available to U.S. and Canadian carriers, and on whether those processes 
may have themselves led to adverse conditions in violation of 46 U.S.C. 
42302(a). Id.
    In response to the September 2024 Notice, the Commission received 
comments from six entities. See Comments, Investigation Into Conditions 
Affecting United States Carriers in Connection With Canadian Ballast 
Water Regulation in the United States/Canada Great Lakes Trade, Docket 
No. FMC-2024-0008, available at https://www.regulations.gov/document/FMC-2024-0008-0018/comment. Comments from those representing the 
interests of U.S. entities argued that the Canadian exemption processes 
did create disparate effects, particularly in that the U.S. process was 
not available until late July 2024, shortly before the early September 
compliance date. There were also statements that the process for U.S. 
Lakers was more complex and time-consuming. But Canada and those 
representing Canadian carriers argued that there was no unlawful 
disparity. Canada asserted generally that there had been no 
differential treatment with regard to exemptions, although it did not 
specifically dispute the difference in the application availability 
dates.
    Information received to date indicates that the Canadian regulation 
at issue in this chapter 423 investigation may create conditions that 
adversely affect the operation of the U.S. Lakers, in a way that 
Canadian carriers do not face under current U.S. law, within the 
meaning of 46 U.S.C. 42302(a). First, such adverse conditions may exist 
as a result of the substantive Canadian regulation involved here. There 
appears to be no dispute that the EPA does not currently require, at 
least as part of its VIDA implementation, that U.S. Lakers meet the 
same ballast water management equipment standards as Canada does, 
although Canada and some other commenters have argued that the U.S. has 
imposed comparably burdensome ballast water regulation on Canadian 
carriers through other rules. Second, it may be that the procedures for 
exemptions from Canada's rule have themselves created such disparate 
conditions, most notably in the failure until late July 2024 to 
establish a detailed process for U.S. Lakers that is arguably 
comparable to the one available to Canadian carriers. That delay 
appears to have prevented the completion of the process by the early 
September 2024 compliance date for post-2008 Lakers.
    However, due in part to the statutorily imposed deadline of 
December 18, 2024, the Commission will not, at this time, make an 
affirmative determination as to disparate treatment under 46 U.S.C. 
42302(a). The immediate concerns that prompted this investigation have 
been temporarily resolved. Information received indicates that Canada 
has granted exemptions for certain U.S. vessels affected in September 
2024, and has determined that the other affected vessels would not be 
subject to the rule in 2024. In its most recent comments, Canada stated 
that three of the six exemption requests by U.S. carriers were granted 
on October 14, 2024, and that the other three vessels ``will be 
informed that they do not require an exemption based on the 
regulations.''

[[Page 99263]]

Comments of Canada (Oct. 15, 2024) at 2. The LCA, in a public 
submission, provided an email attaching a chain of recent 
communications with Transport Canada. That email chain confirms that 
three of the six U.S. vessels had been granted exemptions and that two 
of the remaining vessels had been determined not to need an exemption. 
See LCA Submission (Oct. 28, 2024) at 2-6. The LCA's late October 
submission indicated that the sixth vessel had not yet received a final 
determination, but the Commission understands that that vessel received 
an exemption in early November 2024. However, the exemptions are only 
temporary in nature, so the vessels will be in a similar precarious 
operating position when the exemptions expire.
    The Commission notes that the exemption process, due both to the 
lateness of its availability and the seeming onerousness of its 
process, may have imposed negative effects on certain U.S. carriers. 
Accordingly, there are ongoing concerns with respect to specific 
elements of the above exemption determinations. Those issues will be 
pursued in the agency's longer-term chapter 421 investigation, which 
remains open. The Commission will continue to investigate these 
concerns and strongly encourages affected entities or anyone with 
relevant information to participate in the ongoing chapter 421 
proceeding.

III. Closure of Investigation

    For the above reasons, the Commission has closed its Investigation 
into Conditions Affecting United States Carriers in Connection with 
Canadian Ballast Water Regulation in the United States/Canada Great 
Lakes Trade, FMC-2024-0008, 89 FR 44979 (opened May 22, 2024).

    By the Commission.

    Dated: December 5, 2024.
David Eng,
Secretary.
[FR Doc. 2024-28996 Filed 12-9-24; 8:45 am]
BILLING CODE 6730-02-P
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