28220 Federal Register / Vol. 66, No. 99 / Tuesday, May 22, 2001 / Notices

Prior to 2001, the Vessel was owned

by F/V Defender Limited Partnership.

The Partnership was owned 49% by

Unisea, Inc. Unisea, Inc., a Washington

corporation, is wholly owned by

Nippon Suisan Kaisha, Ltd., a Japanese

company, and therefore does not qualify

as a U.S. Citizen under the AFA. In

response to the passage of the AFA,

Unisea sold its interest in F/V Limited

Partnership to Ohai Enterprises, Inc.,

one of the members of the F/V Defender,

LLC, the current vessel owner. To

facilitate this sale, a refinancing of the

Vessel that involved Unisea paying off

the original preferred mortgage on the

vessel was negotiated. Under the

refinancing arrangement, Unisea now

holds a preferred mortgage on the vessel

as security for the loan that it provided

to pay off the original mortgage on the

Vessel.

Unisea no longer has any ownership

interest in the Vessel. However, Unisea

is a fish processing company which has

had a history of purchasing

substantially all of the Vessel’s catch.

The petition states that Unisea and F/V

Defender, LLC have entered into a

fishing agreement which would require

F/V Defender, LLC to sell 90% of the

vessel’s catch to Unisea through the year

2009.

The Petition

This notice provides a summary of the

issues presented in the petition. The

portion of the petition in which the

Petitioner describes the inconsistencies

that it suggests exist between the AFA,

MARAD’s implementing rules and the

Japan FCN can be viewed over the

internet and is available for

downloading through either the DOT

Docket Management System by

following the instructions in this notice

under ADDRESSES or through

MARAD’s web site at http://

www.marad.gov/afa.html.

In consideration of the financing

provided by Unisea, the members of F/

V Defender, LLC have committed the

Vessel to continue to sell 90% of its

catch to Unisea through 2009.

Petitioners believe that the loan

agreements and the fishing agreement

do not convey impermissible control to

a Non-Citizen; however, 46 U.S.C.

356.45 prohibits a fish processor from

advancing funds to a vessel owner in

return for a security interest in the

vessel. The vessel owner submits in the

petition, on behalf of Unisea, the

mortgagee of the vessel, that such a

restriction on holding a security interest

in the vessel conflicts with Articles V

and VII of the Japan FCN as it

discriminates on the basis of alienage

against a Japanese mortgagee’s ability to

obtain adequate security for loans that it

has made to the vessel owner.

Requested Action

The petition requests that the Chief

Counsel make a determination that the

exclusive fishing agreement entered into

between F/V Defender, LLC and Unisea

and the preferred mortgage issued in

favor of Unisea may remain in force as

any restriction on the fishing agreement

or the preferred mortgage imposed by

the AFA or 46 CFR Part 356 would be

inconsistent with the protections

provided to existing investments of

Unisea as a mortgagee under the JapanFCN.

Dated: May 16, 2001.

By Order of the Maritime Administrator.

Joel Richard,

Secretary, Maritime Administration.

[FR Doc. 01–12837 Filed 5–21–01; 8:45 am]

BILLING CODE 4910–81–P

DEPARTMENT OF TRANSPORTATION

Maritime Administration

[Docket No. MARAD–2001–9670]

Pacific Prince—Applicability of

Ownership and Control Requirements

for Fishery Endorsement

AGENCY: Maritime Administration,

Department of Transportation.

ACTION: Invitation for public comments

on a petition requesting MARAD to

issue a determination that the

ownership and control requirements of

the American Fisheries Act of 1998 and

46 CFR Part 356 are in conflict with an

international investment agreement.

SUMMARY: The Maritime Administration

(MARAD, we, our, or us) is soliciting

public comments on a petition from the

owners and mortgagees of the vessel

Pacific Prince—Official Number 697280

(hereinafter the ‘‘Vessel’’). The petition

requests that MARAD issue a decision

that the American Fisheries Act of 1998

(‘‘AFA’’), Division C, Title II, Subtitle I,

Pub. L. 105–277, and our regulations at

46 CFR Part 356 (65 FR 44860 (July 19,

2000)) are in conflict with the U.S.-

Japan Treaty and Protocol Regarding

Friendship, Commerce and Navigation,

206 UNTS 143, TIAS 2863, 4 UST 2063

(1953) (‘‘U.S.-Japan FCN’’ or ‘‘Treaty’’).

The petition is submitted pursuant to 46

CFR 356.53 and § 213(g) of AFA, which

provide that the requirements of the

AFA and the implementing regulations

will not apply to the owners or

mortgagees of a U.S.-flag vessel

documented with a fishery endorsement

to the extent that the provisions of the

AFA conflict with an existing

international agreement relating to

foreign investment to which the United

States is a party. If MARAD determines

that the AFA and MARAD’s

implementing regulations conflict with

the U.S.-Japan FCN, the requirements of

46 CFR Part 356 and the AFA will not

apply to the extent of the inconsistency.

Accordingly, interested parties are

invited to review the petition and to

submit their views on this petition and

whether there is a conflict between the

U.S.-Japan FCN and the requirements of

both the AFA and 46 CFR Part 356. In

addition to receiving the views of

interested parties, MARAD will consult

with other Departments and Agencies

within the Federal Government that

have responsibility or expertise related

to the interpretation of or application of

international investment agreements.

DATES: You should submit your

comments early enough to ensure that

Docket Management receives them not

later than June 21, 2001.

ADDRESSES: Comments should refer to

the docket number that appears at the

top of this document. Written comments

may be submitted by mail to the Docket

Clerk, U.S. DOT Dockets, Room PL–401,

Department of Transportation, 400 7th

St., SW., Washington, DC 20590–0001.

You may also send comments

electronically via the Internet at http://

dms.dot.gov/submit/. All comments will

become part of this docket and will be

available for inspection and copying at

the above address between 10 a.m. and

5 p.m., E.T., Monday through Friday,

except Federal Holidays. An electronic

version of this document and all

documents entered into this docket are

available on the World Wide Web at

http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: John

T. Marquez, Jr. of the Office of Chief

Counsel at (202) 366–5320. You may

send mail to John T. Marquez, Jr.,

Maritime Administration, Office of

Chief Counsel, Room 7228, MAR–222,

400 Seventh St., SW., Washington, DC

20590–0001 or you may send e-mail to

John.Marquez@marad.dot.gov.

SUPPLEMENTARY INFORMATION:

Background

The AFA was enacted in 1998 to give

U.S. interests a priority in the harvest of

U.S.-fishery resources by increasing the

requirements for U.S. Citizen

ownership, control and financing of

U.S.-flag vessels documented with a

fishery endorsement. MARAD was

charged with promulgating

implementing regulations for fishing

vessels of 100 feet or greater in

registered length while the Coast Guard

Federal Register / Vol. 66, No. 99 / Tuesday, May 22, 2001 / Notices 28221

retains responsibility for vessels under

100 feet.

Section 202 of the AFA, raises, with

some exceptions, the U.S.-Citizen

ownership and control standards for

U.S.-flag vessels that are documented

with a fishery endorsement and

operating in U.S.-waters. The ownership

and control standard was increased

from the controlling interest standard

(greater than 50%) of § 2(b) of Shipping

Act, 1916 (‘‘1916 Act’’), as amended, 46

App. U.S.C. 802(b), to the standard

contained in § 2(c) of the 1916 Act, 46

App. U.S.C. § 802(c), which requires

that 75 percent of the ownership and

control in a vessel owning entity be

vested in U.S. Citizens. In addition,

section 204 of the AFA repeals the

ownership grandfather ‘‘savings

provision’’ in the Anti-Reflagging Act of

1987, Pub. L. 100–239, § 7(b), 101 Stat

1778 (1988), which permits foreign

control of companies owning certain

fishing vessels.

Section 202 of the AFA also

establishes new requirements to hold a

preferred mortgage on a vessel with a

fishery endorsement. State or federally

chartered financial institutions must

now comply with the controlling

interest standard of § 2(b) of the 1916

Act in order to hold a preferred

mortgage on a vessel with a fishery

endorsement. Entities other than state or

federally chartered financial institutions

must either meet the 75% ownership

and control requirements of § 2(c) of the

1916 Act or utilize an approved U.S.-

Citizen Trustee that meets the 75%

ownership and control requirements to

hold the preferred mortgage for the

benefit of the non-citizen lender.

Section 213(g) of the AFA provides

that if the new ownership and control

provisions or the mortgagee provisions

are determined to be inconsistent with

an existing international agreement

relating to foreign investment to which

the United States is a party, such

provisions of the AFA shall not apply to

the owner or mortgagee on October 1,

2001, with respect to the particular

vessel and to the extent of the

inconsistency. MARAD’s regulations at

46 CFR 356.53 set forth a process

wherein owners or mortgagees may

petition MARAD, with respect to a

specific vessel, for a determination that

the implementing regulations are in

conflict with an international

investment agreement. Petitions must be

noticed in the Federal Register with a

request for comments. The Chief

Counsel of MARAD, in consultation

with other Departments and Agencies

within the Federal Government that

have responsibility or expertise related

to the interpretation of or application of

international investment agreements,

will review the petitions and, absent

extenuating circumstances, render a

decision within 120 days of the receipt

of a fully completed petition.

The Petitioners

Pacific Prince, LLC is a Washington

limited liability company which owns,

in its entirety the fishing vessel Pacific

Prince. Pacific Prince, LLC is owned by

two individual U.S. Citizens and meets

the U.S. Citizen ownership

requirements of the AFA. MARAD has

not yet determined whether Pacific

Prince, LLC also complies with the

requirement that it be controlled by U.S.

Citizens.

The Petition

The Petitioners have filed a

consolidated petition for the vessels

Pacific Prince and Caitlin Ann. The

Caitlin Ann has a registered length of

less than 100 feet and therefore is not

directly addressed in this notice.

However, because the loan agreements,

loan guaranties, and fishing agreements

on the vessels are related, there will be

some discussion related to both vessels.

This notice provides a summary of the

issues in the petition. The portion of the

petition in which the Petitioner

describes the inconsistencies that it

suggests exist between the AFA,

MARAD’s implementing rules and the

Japan FCN can be viewed over the

internet and is available for

downloading through either the DOT

Docket Management System by

following the instructions in this notice

under ADDRESSES or through MARAD’s

web site at http://www.marad.gov/

afa.html.

The Vessel was purchased by Pacific

Prince, LLC from Fishing Vessel Pacific

Prince General Partnership in early

2000. In order to fund the purchase of

the Vessel, the owners arranged

financing through the U.S. Bank

National Association (‘‘U.S. Bank’’). As

part of the buy-out transaction, U.S.

Bank required a partial guaranty of

payment from a party with financial

strength greater than could be offered by

the individual U.S. Citizen owners of

Pacific Prince, LLC and Caitlin Ann,

LLC, the owner of the Caitlin Ann. A

payment guaranty was obtained from

Westward Seafoods, Inc. a Washington

corporation (‘‘Westward’’) which is a

wholly owned subsidiary of the Maruha

Corporation of Japan and not a citizen

of the United States for the purposes of

46 U.S.C. 12102(c) and 46 CFR Part 356.

Pursuant to the terms of the guaranty,

Westward is obligated to make any of

the first nine quarterly payments on the

Pacific Prince loan, if and to the extent

that those payments are not made when

due by Pacific Prince, LLC. In the event

that Westward is required to make all or

part of a payment to U.S. Bank on behalf

of Pacific Prince, LLC, the payments

will be deemed to be a loan by

Westward to Pacific Prince, LLC,

secured by a junior preferred mortgage

on the Vessel and will be repaid out of

excess earnings from the operation of

the Vessel. Any amount advanced by

Westward under the guaranty that is not

repaid, in full, prior to the maturity of

the U.S. Bank loan, will become due

and payable at that time.

In consideration of the guaranty

provided by Westward, the members of

Pacific Prince, LLC, and Caitlan Ann,

LLC have committed the Pacific Prince

and Caitlin Ann to continue to sell their

catch exclusively to Westward for the

next four years, as they have in the past,

so long as they continue to be paid a

competitive market price for their fish.

Requested Action

The petition requests that the Chief

Counsel make a determination that the

exclusive fishing agreement and the

guaranty agreement entered into

between Pacific Prince, LLC, Caitlin

Ann, LLC, and Westward may remain in

force as any restriction on the guaranty

or fishing agreement imposed by the

AFA or 46 CFR part 356 would be

inconsistent with the protections

provided to existing investments of

Westward and Maruha under the JapanFCN. Because the rules prohibit a fish

processor such as Westward from

holding a preferred mortgage on a

vessel, even through a mortgage trustee,

the petition also seeks a determination

that Westward’s second preferred

mortgage on the Vessels, provided as

security for any payment made pursuant

to the guaranty, does not convey

impermissible control to a Non-Citizen

and should be allowed to remain in

place as any restrictions on the

preferred mortgage would conflict with

the protections afforded Westward and

Maruha as Mortgagees under the JapanFCN.

Dated: May 16, 2001.

By Order of the Maritime Administrator.

Joel Richard,

Secretary, Maritime Administration.

[FR Doc. 01–12838 Filed 5–21–01; 8:45 am]

BILLING CODE 4910–81–P