171
chapter only on the condition that the vessel will be available to the Govern-
ment in time of war or national emergency.
‘‘§ 53903. Insurable interests
‘‘(a) IN GENERAL.—The Secretary of Transportation may provide insur-
ance and reinsurance under this chapter for—
‘‘(1) an American vessel, including a vessel under construction;
‘‘(2) a foreign vessel—
‘‘(A) owned by a citizen of the United States; or
‘‘(B) engaged in transportation in the waterborne commerce of
the United States or in such other transportation by water or such
other services as the Secretary considers to be in the interest of
the national defense or national economy of the United States,
when so engaged;
‘‘(3) cargo—
‘‘(A) shipped or to be shipped on a vessel insurable under this
section, including by express or registered mail;
‘‘(B) owned by a citizen or resident of the United States;
‘‘(C) imported to or exported from the United States, or sold
or purchased by a citizen or resident of the United States, under
a contract of sale or purchase the terms of which provide that the
risk of loss by war risks or the obligation to provide insurance
against war risks is on a citizen or resident of the United States;
or
‘‘(D) shipped between ports in the United States;
‘‘(4) disbursements, including advances to masters and general aver-
age disbursements, and freight and passage money of a vessel insurable
under this section;
‘‘(5) personal effects of an individual on a vessel insurable under this
section;
‘‘(6) loss of life, injury, or detention by an enemy of the United
States after capture, with respect to an individual on a vessel insurable
under this section; and
‘‘(7) statutory or contractual obligations or other liabilities of a ves-
sel insurable under this section or of the owner or charterer of such
a vessel, of a nature customarily covered by insurance.
‘‘(b) CONSIDERATIONS FOR FOREIGN VESSELS.—In determining whether
to provide insurance or reinsurance for a foreign vessel, the Secretary shall
consider the characteristics, employment, and general management of the
vessel by the owner or charterer.
‘‘(c) NON-WAR RISKS.—Insurance of a risk under subsection (a)(5)–(7),
insofar as it involves a liability related to an individual on the vessel, may
172
include risks other than war risks to the extent the Secretary considers ad-
visable.
‘‘§ 53904. Liability insurance for persons involved in war or
defense efforts
‘‘(a) IN GENERAL.—The Secretary of Transportation may provide insur-
ance under this chapter against legal liability that a person may incur in
providing services or facilities for a vessel if, in the opinion of the Secretary,
the insurance—
‘‘(1) is required in prosecuting a war or for national defense; and
‘‘(2) cannot be obtained at reasonable rates or on reasonable terms
and conditions from approved companies authorized to do insurance
business in a State of the United States.
‘‘(b) LIMITATIONS.—Employer liability insurance and worker compensa-
tion insurance against legal liability to employees may not be provided under
this section.
‘‘§ 53905. Agency insurance
‘‘(a) IN GENERAL.—With the approval of the President, an agency of the
United States Government may obtain insurance provided for by this chap-
ter from the Secretary of Transportation, except as provided in sections
17302 and 17303 of title 40.
‘‘(b) PREMIUM WAIVERS.—With the approval of the President, the Sec-
retary of Transportation may provide insurance under this chapter at the
request of the Secretary of Defense and other agencies the President may
prescribe, without payment of an insurance premium if the Secretary of De-
fense or agency agrees to indemnify the Secretary of Transportation against
loss covered by the insurance. The Secretary of Defense and agencies may
make such an indemnity agreement.
‘‘(c) PRESIDENTIAL APPROVAL.—The signature of the President (or an
official designated by the President) on the agreement shall be treated as
the approval required by section 53902(a) of this title.
‘‘§ 53906. Hull insurance valuation
‘‘(a) STATED VALUATION.—The valuation in a hull insurance policy for
actual or constructive total loss of the insured vessel shall be a stated valu-
ation determined by the Secretary of Transportation. The stated
valuation—
‘‘(1) shall exclude national defense features paid for by the United
States Government; and
‘‘(2) may not exceed the amount that would be payable if the owner-
ship of the vessel had been requisitioned under chapter 563 of this title
at the time the insurance attached under the policy.
173
‘‘(b) REJECTING STATED VALUATION.—Within 60 days after the insur-
ance attaches under a policy referred to in subsection (a) or within 60 days
after the Secretary determines the valuation, whichever is later, the insured
may reject the valuation and pay, at the rate provided in the policy, pre-
miums based on the asserted valuation the insured specifies at the time of
rejection. However, the asserted valuation is not binding on the Government
in any subsequent action on the policy.
‘‘(c) AMOUNT OF CLAIM.—If a vessel is actually or constructively totally
lost and the insured under a policy referred to in subsection (a) has not
rejected the stated valuation determined by the Secretary, the amount of a
claim adjusted, compromised, settled, adjudged, or paid may not exceed the
stated valuation. However, if the insured has rejected the valuation, the
insured—
‘‘(1) shall be paid, as a tentative advance only, 75 percent of the
stated valuation; and
‘‘(2) may bring a civil action against the Government in a court hav-
ing jurisdiction of the claim to recover a valuation equal to the just
compensation the court determines would have been payable if the own-
ership of the vessel had been requisitioned under chapter 563 of this
title at the time the insurance attached under the policy.
‘‘(d) ADJUSTING PREMIUMS.—If a court makes a determination as pro-
vided under subsection (c)(2), premiums paid under the policy shall be ad-
justed based on the court’s determination and the rates provided for in the
policy.
‘‘§ 53907. Reinsurance
‘‘(a) IN GENERAL.—To the extent the Secretary of Transportation is au-
thorized to provide insurance under this chapter, the Secretary may provide
reinsurance to a company authorized to do insurance business in a State
of the United States. The Secretary may obtain reinsurance from such a
company for any insurance provided by the Secretary under this chapter.
‘‘(b) RATES.—The Secretary may not provide reinsurance at rates less
than, nor obtain reinsurance at rates more than, the rates established by
the Secretary on the same or similar risks or the rates charged by the insur-
ance company for the insurance reinsured, whichever is more advantageous
to the Secretary. However, the Secretary may provide an allowance to the
insurance company for the costs of services and facilities the company pro-
vides, in an amount the Secretary considers reasonable according to good
business practice. The allowance to the company may not include any
amount for soliciting or stimulating insurance business.
174
‘‘§ 53908. Additional insurance privately obtained
‘‘With the approval of the Secretary of Transportation, a person having
an insurable interest in a vessel may obtain insurance on the vessel with
other underwriting agents in addition to the insurance with the Secretary.
The Secretary is not entitled to the benefit of the additional insurance.
‘‘§ 53909. War risk insurance revolving fund
‘‘(a) IN GENERAL.—There is a war risk insurance revolving fund in the
Treasury.
‘‘(b) DEPOSITS.—There shall be deposited in the fund amounts appro-
priated to carry out this chapter and amounts received in carrying out this
chapter.
‘‘(c) PAYMENTS.—There shall be paid from the fund amounts for return
premiums, losses, settlements, judgments, and all liabilities incurred by the
United States Government under this chapter.
‘‘(d) INVESTMENT.—On request of the Secretary of Transportation, the
Secretary of the Treasury may invest or reinvest any part of the fund in
securities of the Government or securities whose principal and interest are
guaranteed by the Government. Interest and benefits from the securities
shall be deposited in the fund.
‘‘§ 53910. Administrative
‘‘(a) ACCORDANCE WITH COMMERCIAL PRACTICE.—In carrying out this
chapter, the Secretary of Transportation may act in accordance with com-
mercial practice in the marine insurance business.
‘‘(b) REGULATIONS.—The Secretary may prescribe regulations the Sec-
retary considers appropriate to carry out this chapter.
‘‘(c) POLICIES, RATES, AND ANNUAL FEES.—The Secretary may pre-
scribe and change forms and policies, and fix and change the amounts in-
sured and rates of premium, under this chapter.
‘‘(d) ANNUAL FEES.—The Secretary may charge and collect an annual
fee in an amount calculated to cover the expenses of processing applications
for insurance, employing underwriting agents, and appointing experts under
this chapter.
‘‘(e) PAYMENT OF CLAIMS AND JUDGMENTS.—The Secretary may settle
and pay claims, and pay judgments against the United States Government,
related to insurance under this chapter.
‘‘(f) UNDERWRITING AGENTS.—
‘‘(1) IN GENERAL.—The Secretary may, and when the Secretary
finds it practical to do so shall, employ a domestic company or group
of domestic companies, authorized to do marine insurance business in
a State of the United States, to act as underwriting agent for the Sec-
175
retary. The services of an underwriting agent may be used in adjusting
claims, but a claim may not be paid until approved by the Secretary.
‘‘(2) COMPENSATION.—The Secretary may allow the company or
group of companies reasonable compensation for services as the under-
writing agent. The compensation may include an allowance for expenses
reasonably incurred by the agent, but may not include any amount for
soliciting or stimulating business.
‘‘(g) FEES FOR ARRANGING INSURANCE.—Except as provided in sub-
section (f)(2), the Secretary may not pay an insurance broker or other per-
son acting in a similar intermediary capacity a fee or other consideration
for participating in arranging insurance when the Secretary directly insures
any of the risk.
‘‘(h) EMPLOYMENT OF MARINE INSURANCE EXPERTS.—The Secretary,
without regard to the laws and regulations on the employment of Federal
employees, may appoint and prescribe the duties of experts in marine insur-
ance as the Secretary considers necessary to carry out this chapter.
‘‘(i) SERVICES OF OTHER GOVERNMENT AGENCIES.—With the consent of
another Government agency, the Secretary may use information, services,
facilities, officers, and employees of the agency in carrying out this chapter.
‘‘(j) VESSEL LOCATION REPORTING.—The Secretary may prescribe by
regulation vessel location reporting requirements for a vessel insured under
this chapter.
‘‘§ 53911. Civil actions for losses
‘‘(a) IN GENERAL.—If there is a disagreement about a loss insured under
this chapter, a civil action in admiralty may be brought against the United
States Government in the district court of the United States for the district
in which the plaintiff or the plaintiff’s agent resides. If the plaintiff has no
residence in the United States, the action may be brought in the United
States District Court for the District of Columbia or in the district court
for any district in which the Attorney General agrees to accept service. Any
person who may have an interest in the insurance may be made a party,
either initially or on the motion of either party.
‘‘(b) EXCLUSIVE REMEDY.—A civil action against the Government under
this section is exclusive of any other action by reason of the same subject
matter against an officer, employee, or agent employed or retained by the
Government under this chapter.
‘‘(c) PROCEDURE.—A civil action under this section shall be heard and
determined under chapter 309 of this title.
‘‘(d) TOLLING OF LIMITATIONS PERIOD.—If a claim is filed with the Sec-
retary of Transportation, the running of the limitations period for bringing
a civil action is suspended until the Secretary denies the claim, and for 60
176
days thereafter. The Secretary is deemed to have denied the claim if the
Secretary does not act on the claim within 6 months after the claim is filed,
unless the Secretary for good cause shown agrees with the claimant on a
different period for the Secretary to act on the claim.
‘‘(e) INTERPLEADER.—If the Secretary acknowledges the indebtedness of
the Government under the insurance and there is a dispute about the per-
sons entitled to receive payment, the Government may bring a civil action
interpleading those persons. The action shall be brought in the United
States District Court for the District of Columbia or in the district court
for the district in which any of those persons resides. A person not residing
or found in the district may be made a party by service in any reasonable
manner the court directs. If the court is satisfied that unknown persons
might make a claim under the insurance, the court may direct service on
those unknown persons by publication in the Federal Register. Judgment
after service by publication in the Federal Register discharges the Govern-
ment from further liability to all persons.
‘‘§ 53912. Expiration date
‘‘The authority of the Secretary of Transportation to provide insurance
and reinsurance under this chapter expires on June 30, 2005.
‘‘PART D—PROMOTIONAL PROGRAMS
‘‘CHAPTER 551—COASTWISE TRADE
‘‘Sec.
‘‘55101.
Application of coastwise laws.
‘‘55102.
Transportation of merchandise.
‘‘55103.
Transportation of passengers.
‘‘55104.
Transportation of passengers between Puerto Rico and other ports in the United
States.
‘‘55105.
Transportation of hazardous waste.
‘‘55106.
Merchandise transferred between barges.
‘‘55107.
Empty cargo containers and barges.
‘‘55108.
Platform jackets.
‘‘55109.
Dredging.
‘‘55110.
Transportation of dredged material.
‘‘55111.
Towing.
‘‘55112.
Vessel escort operations and towing assistance.
‘‘55113.
Use of foreign documented oil spill response vessels.
‘‘55114.
Unloading fish from foreign vessels.
‘‘55115.
Supplies on fish processing vessels.
‘‘55116.
Canadian rail lines.
‘‘55117.
Great Lakes rail route.
‘‘55118.
Foreign railroads whose road enters by ferry, tugboat, or towboat.
‘‘55119.
Yukon River.
‘‘55120.
Transshipment of imported merchandise intended for immediate exportation.
‘‘§ 55101. Application of coastwise laws
‘‘(a) IN GENERAL.—Except as provided in subsection (b), the coastwise
laws apply to the United States, including the island territories and posses-
sions of the United States.
‘‘(b) EXCEPTIONS.—The coastwise laws do not apply to—
177
‘‘(1) the Virgin Islands until the President declares by proclamation
that the coastwise laws apply to the Virgin Islands; or
‘‘(2) American Samoa.
‘‘§ 55102. Transportation of merchandise
‘‘(a) DEFINITION.—In this section, the term ‘merchandise’ includes—
‘‘(1) merchandise owned by the United States Government, a State,
or a subdivision of a State; and
‘‘(2) valueless material.
‘‘(b) REQUIREMENTS.—Except as otherwise provided in this chapter or
chapter 121 of this title, a vessel may not provide any part of the transpor-
tation of merchandise by water, or by land and water, between points in
the United States to which the coastwise laws apply, either directly or via
a foreign port, unless the vessel—
‘‘(1) is wholly owned by citizens of the United States for purposes
of engaging in the coastwise trade; and
‘‘(2) has been issued a certificate of documentation with a coastwise
endorsement under chapter 121 or is exempt from documentation but
would otherwise be eligible for such a certificate and endorsement.
‘‘(c) PENALTY.—Merchandise transported in violation of subsection (b) is
liable to seizure by and forfeiture to the Government. Alternatively, an
amount equal to the value of the merchandise (as determined by the Sec-
retary of Homeland Security) or the actual cost of the transportation,
whichever is greater, may be recovered from any person transporting the
merchandise or causing the merchandise to be transported.
‘‘§ 55103. Transportation of passengers
‘‘(a) IN GENERAL.—Except as otherwise provided in this chapter or chap-
ter 121 of this title, a vessel may not transport passengers between ports
or places in the United States, either directly or via a foreign port, unless
the vessel—
‘‘(1) is wholly owned by citizens of the United States for purposes
of engaging in the coastwise trade; and
‘‘(2) has been issued a certificate of documentation with a coastwise
endorsement under chapter 121 or is exempt from documentation but
would otherwise be eligible for such a certificate and endorsement.
‘‘(b) PENALTY.—The penalty for violating subsection (a) is $300 for each
passenger transported and landed.
‘‘§ 55104. Transportation of passengers between Puerto Rico
and other ports in the United States
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) CERTIFICATE.—The term ‘certificate’ means a certificate of fi-
nancial responsibility for indemnification of passengers for nonperform-
178
ance of transportation issued by the Federal Maritime Commission
under section 44102 of this title.
‘‘(2) PASSENGER VESSEL.—The term ‘passenger vessel’ means a ves-
sel of similar size, or offering similar service, as any other vessel trans-
porting passengers under subsection (b).
‘‘(b) EXEMPTION.—Except as otherwise provided in this section, a vessel
not qualified to engage in the coastwise trade may transport passengers be-
tween a port in Puerto Rico and another port in the United States.
‘‘(c) EXPIRATION OF EXEMPTION.—
‘‘(1) WHEN COASTWISE-QUALIFIED VESSEL OFFERING SERVICE.—On
a showing to the Secretary of the department in which the Coast Guard
is operating, by the vessel owner or charterer, that a United States
passenger vessel qualified to engage in the coastwise trade is offering
or advertising passenger service between a port in Puerto Rico and an-
other port in the United States pursuant to a certificate, the Secretary
shall notify the owner or operator of each vessel transporting pas-
sengers under subsection (b) to terminate that transportation within
270 days after the Secretary’s notification. Except as provided in sub-
section (d), the authority to transport passengers under subsection (b)
expires at the end of that 270-day period.
‘‘(2) WHEN
NON-COASTWISE-QUALIFIED
VESSEL
OFFERING
SERV-
ICE.—On a showing to the Secretary, by the vessel owner or charterer,
that a United States passenger vessel not qualified to engage in the
coastwise trade is offering or advertising passenger service between a
port in Puerto Rico and another port in the United States pursuant
to a certificate, the Secretary shall notify the owner or operator of each
foreign vessel transporting passengers under subsection (b) to termi-
nate that transportation within 270 days after the Secretary’s notifica-
tion. Except as provided in subsection (d), the authority of a foreign
vessel to transport passengers under subsection (b) expires at the end
of that 270-day period.
‘‘(d) DELAYING EXPIRATION.—If the vessel offering or advertising the
service described in subsection (c) has not begun that service within 270
days after the Secretary’s notification, the expiration provided by subsection
(c) is delayed until 90 days after the vessel offering or advertising the serv-
ice begins that service.
‘‘(e) REINSTATEMENT OF EXEMPTION.—If the Secretary finds that the
service on which an expiration was based is no longer available, the expired
authority to transport passengers is reinstated.
179
‘‘§ 55105. Transportation of hazardous waste
‘‘(a) IN GENERAL.—The transportation of hazardous waste, as defined in
section 1004(5) of the Resource Conservation and Recovery Act of 1976 (42
U.S.C. 6903(5)), from a point in the United States to sea for incineration
is deemed to be transportation of merchandise under section 55102 of this
title.
‘‘(b) NONAPPLICATION TO CERTAIN FOREIGN VESSELS.—
‘‘(1) IN GENERAL.—Subsection (a) does not apply to transportation
performed by a foreign-flag ocean incineration vessel owned by or
under construction on May 1, 1982, for a corporation wholly owned by
citizens of the United States under section 50501(a)–(c) of this title.
‘‘(2) STANDARDS
FOR
INCINERATION
EQUIPMENT.—Incineration
equipment on a vessel described in paragraph (1) must meet standards
of the Coast Guard and the Environmental Protection Agency.
‘‘(3) INSPECTION.—A vessel described in paragraph (1) shall be in-
spected by the Coast Guard, regardless of whether inspected by the flag
nation. The inspection shall be the same as would be required of a ves-
sel of the United States, including drydock inspection and internal ex-
amination of tanks and void spaces. The inspection may be made con-
currently with an inspection by the flag nation or within one year after
the initial issuance or next scheduled issuance of the Safety of Life at
Sea Safety Construction Certificate. In making the inspection, the
Coast Guard shall refer to the condition of the hull and superstructure
established by the initial foreign certification as the basis for evaluating
the current condition of the hull and superstructure. The Coast Guard
shall allow the substitution of fittings, material, apparatus, equipment,
and appliances different from those required for vessels of the United
States if satisfied they are equivalent and at least as effective as those
required for vessels of the United States. A satisfactory inspection
under this paragraph shall be certified in writing by the Secretary of
the department in which the Coast Guard is operating.
‘‘(c) EFFECTIVE DATE.—Subsection (a) is not effective until an appro-
priate vessel has been built and documented under chapter 121 of this title.
‘‘§ 55106. Merchandise transferred between barges
‘‘(a) IN GENERAL.—On terms and conditions the Secretary of Homeland
Security may prescribe by regulation, the Secretary may suspend the appli-
cation of section 55102 of this title to the transportation of merchandise
that is transferred, when moving in the foreign trade of the United States,
from a barge certified by the owner or operator as designed specifically for
carriage on a vessel and carried regularly on a vessel in foreign trade, to
another such barge owned or leased by the same owner or operator. How-
180
ever, this subsection does not apply to transportation between the conti-
nental United States and noncontiguous States, territories, or possessions
to which the coastwise laws apply.
‘‘(b) RECIPROCITY REQUIREMENT FOR FOREIGN VESSELS.—This section
applies to a vessel of foreign registry only if the Secretary of Homeland Se-
curity finds, based on information from the Secretary of State, that the gov-
ernment of the nation of registry extends reciprocal privileges to vessels of
the United States.
‘‘§ 55107. Empty cargo containers and barges
‘‘(a) IN GENERAL.—Subject to subsections (b) and (c), and on terms and
conditions the Secretary of Homeland Security may prescribe by regulation,
section 55102 of this title does not apply to the transportation of—
‘‘(1) empty cargo vans, empty lift vans, or empty shipping tanks;
‘‘(2) equipment for use with cargo vans, lift vans, or shipping tanks;
‘‘(3) empty barges specifically designed for carriage aboard a vessel
and equipment (except propulsion equipment) for use with those
barges;
‘‘(4) empty instruments for international traffic exempted from the
customs laws under section 322(a) of the Tariff Act of 1930 (19
U.S.C. 1322(a)); or
‘‘(5) stevedoring equipment and material.
‘‘(b) CONDITIONS.—
‘‘(1) CLAUSES (1)–(4).—Clauses (1)–(4) of subsection (a) apply only
if the items named are owned or leased by the owner or operator of
the vessel and transported for its use in handling its cargo in foreign
trade.
‘‘(2) CLAUSE (5).—Clause (5) of subsection (a) applies only if the
items named are—
‘‘(A) owned or leased by the owner or operator of the vessel or
by the stevedoring company having the contract for the loading or
unloading of the vessel; and
‘‘(B) transported without charge for use in the handling of
cargo in foreign trade.
‘‘(c) RECIPROCITY REQUIREMENT FOR FOREIGN VESSELS.—This section
applies to a vessel of foreign registry only if the Secretary of Homeland Se-
curity finds, based on information from the Secretary of State, that the gov-
ernment of the nation of registry extends reciprocal privileges to vessels of
the United States.
‘‘§ 55108. Platform jackets
‘‘(a) DEFINITIONS.—In this section:
181
‘‘(1) COASTWISE QUALIFIED VESSEL.—The term ‘coastwise qualified
vessel’ means a vessel that has been issued a certificate of documenta-
tion with a coastwise endorsement under chapter 121 of this title.
‘‘(2) PLATFORM JACKET.—The term ‘platform jacket’ refers to a
single physical component and includes any type of offshore explo-
ration, development, or production structure or component thereof,
including—
‘‘(A) platform jackets;
‘‘(B) tension leg or SPAR platform superstructures (including
the deck, drilling rig and support utilities, and supporting struc-
ture);
‘‘(C) hull (including vertical legs and connecting pontoons or
vertical cylinder);
‘‘(D) tower and base sections of a platform jacket;
‘‘(E) jacket structures; and
‘‘(F) deck modules (known as ‘topsides’).
‘‘(b) AUTHORIZED TRANSPORTATION.—Section 55102 of this title does
not apply to the transportation of a platform jacket in or on a non-coastwise
qualified launch barge between two points in the United States, at one of
which there is an installation or other device within the meaning of section
4(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1333(a)), if—
‘‘(1) the launch barge was built before December 31, 2000, and has
a launch capacity of at least 12,000 long tons; and
‘‘(2) the Secretary of Transportation makes a determination, in ac-
cordance with procedures established under subsection (c), that a suit-
able coastwise qualified vessel is not available for use in the transpor-
tation and, if needed, launch or installation of a platform jacket.
‘‘(c) PROCEDURES TO MAXIMIZE USE OF COASTWISE QUALIFIED VES-
SELS.—The Secretary of Transportation shall adopt procedures imple-
menting this section that are reasonably designed to provide timely informa-
tion so as to maximize the use of coastwise qualified vessels. The procedures
shall, among other things, establish that for purposes of this section, a
coastwise qualified vessel shall be deemed to be not available only if—
‘‘(1) on application by an owner or operator for the use of a non-
coastwise qualified launch barge for transportation of a platform jacket
under this section (which application shall include all relevant informa-
tion, including engineering details and timing requirements), the Sec-
retary promptly publishes a notice in the Federal Register—
‘‘(A) describing the project and the platform jacket involved;
182
‘‘(B) advising that all relevant information reasonably needed to
assess the transportation requirements for the platform jacket will
be made available to interested parties on request; and
‘‘(C) requesting that information on the availability of coastwise
qualified vessels be submitted within 30 days after publication of
that notice; and
‘‘(2)(A) no information is submitted to the Secretary within that 30
day period; or
‘‘(B) the owner or operator of a coastwise qualified vessel submits
information to the Secretary asserting that the owner or operator has
a suitable coastwise qualified vessel available for the transportation, but
the Secretary determines, within 90 days after the notice is first pub-
lished, that the coastwise qualified vessel is not suitable or reasonably
available for the transportation.
‘‘§ 55109. Dredging
‘‘(a) IN GENERAL.—Except as provided in subsection (b), a vessel may
engage in dredging in the navigable waters of the United States only if—
‘‘(1) the vessel is wholly owned by citizens of the United States for
purposes of engaging in the coastwise trade;
‘‘(2) the charterer, if any, is a citizen of the United States for pur-
poses of engaging in the coastwise trade; and
‘‘(3) the vessel has been issued a certificate of documentation with
a coastwise endorsement under chapter 121 of this title or is exempt
from documentation but would otherwise be eligible for such a certifi-
cate and endorsement.
‘‘(b) DREDGING OF GOLD IN ALASKA.—A documented vessel with a reg-
istry endorsement may engage in the dredging of gold in Alaska.
‘‘(c) PENALTY.—If a vessel is operated in knowing violation of this sec-
tion, the vessel and its equipment are liable to seizure by and forfeiture to
the United States Government.
‘‘§ 55110. Transportation of dredged material
‘‘Section 55102 of this title applies to the transportation of valueless ma-
terial or dredged material, regardless of whether it has commercial value,
from a point in the United States or on the high seas within the exclusive
economic zone, to another point in the United States or on the high seas
within the exclusive economic zone.
‘‘§ 55111. Towing
‘‘(a) IN GENERAL.—Except when towing a vessel in distress, a vessel may
not do any part of any towing described in subsection (b) unless the towing
vessel—
183
‘‘(1) is wholly owned by citizens of the United States for purposes
of engaging in the coastwise trade; and
‘‘(2) has been issued a certificate of documentation with a coastwise
endorsement under chapter 121 of this title or is exempt from docu-
mentation but would otherwise be eligible for such a certificate and en-
dorsement.
‘‘(b) APPLICABLE TOWING.—Subsection (a) applies to the towing of—
‘‘(1) a vessel between ports or places in the United States to which
the coastwise laws apply, either directly or via a foreign port or place;
‘‘(2) a vessel from point to point within the harbors of ports or
places to which the coastwise laws apply; or
‘‘(3) a vessel transporting valueless material or dredged material, re-
gardless of whether it has commercial value, from a point in the United
States or on the high seas within the exclusive economic zone, to an-
other point in the United States or on the high seas within the exclu-
sive economic zone.
‘‘(c) PENALTIES.—
‘‘(1) OWNER AND MASTER.—The owner and master of a vessel tow-
ing another vessel in violation of this section are each liable for a pen-
alty of at least $350 but not more than $1,100. A penalty under this
paragraph constitutes a lien on the vessel. The lien is enforceable in
a district court of the United States for any district in which the vessel
is found. Clearance may not be granted to the vessel until the penalties
have been paid.
‘‘(2) VESSEL.—In addition to the penalties under paragraph (1), the
towing vessel is liable for a penalty of $60 per ton based on the ton-
nage of each towed vessel.
‘‘§ 55112. Vessel escort operations and towing assistance
‘‘(a) IN GENERAL.—Except in the case of a vessel in distress, only a ves-
sel of the United States may perform the following escort vessel operations
within the navigable waters of the United States:
‘‘(1) Operations that commence or terminate at a port or place in
the United States.
‘‘(2) Operations required by United States law or regulation.
‘‘(3) Operations provided in whole or in part within or through navi-
gation facilities owned, maintained, or operated by the United States
Government or the approaches to those facilities, other than facilities
operated by the St. Lawrence Seaway Development Corporation on the
St. Lawrence River portion of the Seaway.
‘‘(b) ESCORT VESSELS.—For purposes of this section, an escort vessel
is—
184
‘‘(1) any vessel that is assigned and dedicated to assist another ves-
sel, whether or not tethered to that vessel, solely as a safety precaution
to assist in controlling the speed or course of the assisted vessel in the
event of a steering or propulsion equipment failure, or any other simi-
lar emergency circumstance, or in restricted waters where additional
assistance in maneuvering the vessel is required to ensure its safe oper-
ation; and
‘‘(2) in the case of a vessel being towed under section 55111 of this
title, any vessel that is assigned and dedicated to the vessel being towed
in addition to any towing vessel required under that section.
‘‘(c) RELATIONSHIP TO OTHER LAW.—This section does not affect sec-
tion 55111 of this title.
‘‘(d) PENALTY.—A person violating this section is liable to the Govern-
ment for a civil penalty of not more than $10,000 for each day during which
the violation occurs.
‘‘§ 55113. Use of foreign documented oil spill response ves-
sels
‘‘Notwithstanding any other provision of law, an oil spill response vessel
documented under the laws of a foreign country may operate in waters of
the United States on an emergency and temporary basis, for the purpose
of recovering, transporting, and unloading in a United States port oil dis-
charged as a result of an oil spill in or near those waters, if—
‘‘(1) an adequate number and type of oil spill response vessels docu-
mented under the laws of the United States cannot be engaged to re-
cover oil from an oil spill in or near those waters in a timely manner,
as determined by the Federal On-Scene Coordinator for a discharge or
threat of a discharge of oil; and
‘‘(2) the foreign country has by its laws accorded to vessels of the
United States the same privileges accorded to vessels of the foreign
country under this section.
‘‘§ 55114. Unloading fish from foreign vessels
‘‘(a) PROHIBITIONS.—Except as otherwise provided by this section or a
treaty or convention to which the United States Government is a party, a
foreign vessel may not unload, in a port of the United States—
‘‘(1) its catch of fish taken on board on the high seas or fish prod-
ucts processed from that catch of fish; or
‘‘(2) fish or fish products taken on board that vessel on the high seas
from a vessel engaged in fishing operations or the processing of fish
or fish products.
‘‘(b) REGULATIONS
ON OBTAINING INFORMATION.—The Secretary of
Commerce may prescribe regulations the Secretary considers necessary to
185
obtain information on the transportation of fish products by vessels of the
United States for foreign fish processing vessels to points in the United
States.
‘‘(c) VIRGIN ISLANDS EXEMPTION.—A foreign vessel of not more than 50
feet overall in length may unload its catch of fresh fish (whole or with the
heads, viscera, or fins removed, but not frozen, otherwise processed, or fur-
ther advanced) in a port of the Virgin Islands for immediate consumption
in those islands. Fish unloaded under this subsection may be sold or trans-
ferred only for immediate consumption. In the absence of satisfactory evi-
dence that a sale or transfer to an agent, representative, or employee of a
freezer or cannery is for immediate consumption, the sale or transfer is
deemed not to be for immediate consumption. This subsection does not pro-
hibit the freezing, smoking, or other processing of fresh fish by the ultimate
consumer of the fish.
‘‘(d) SEIZURE, FORFEITURE, AND PENALTY.—Fish unloaded in the Vir-
gin Islands that are retained, sold, or transferred, except as allowed by sub-
section (c), are liable to seizure by and forfeiture to the Government. A per-
son retaining, selling, transferring, buying, or receiving the fish is liable to
the Government for a civil penalty of not more than $1,000 for each viola-
tion. A penalty or forfeiture under this section may be compromised, modi-
fied, or remitted under section 2107(b) of this title.
‘‘§ 55115. Supplies on fish processing vessels
‘‘Section 55102 of this title does not apply to supplies aboard a United
States documented fish processing vessel that are necessary and used for
processing or assembling fishery products aboard such a vessel.
‘‘§ 55116. Canadian rail lines
‘‘Section 55102 of this title does not apply to the transportation of mer-
chandise between points in the continental United States, including Alaska,
over through routes in part over Canadian rail lines and connecting water
facilities if the routes have been recognized by the Surface Transportation
Board and rate tariffs for the routes have been filed with the Board.
‘‘§ 55117. Great Lakes rail route
‘‘Section 55102 of this title does not apply to the transportation of mer-
chandise loaded on a railroad car or to a motor vehicle with or without a
trailer, and with its passengers or contents when accompanied by the oper-
ator, when the railroad car or motor vehicle is transported in a railroad car
ferry operated between fixed terminals on the Great Lakes as part of a rail
route, if—
‘‘(1) the car ferry is owned by a common carrier by water and oper-
ated as part of a rail route with the approval of the Surface Transpor-
tation Board;
186
‘‘(2) the stock of the common carrier by water, or its predecessor,
was owned or controlled by a common carrier by rail prior to June 5,
1920;
‘‘(3) the stock of the common carrier owning the car ferry is, with
the approval of the Board, now owned or controlled by a common car-
rier by rail; and
‘‘(4) the car ferry is built in and documented under the laws of the
United States.
‘‘§ 55118. Foreign railroads whose road enters by ferry, tug-
boat, or towboat
‘‘A foreign railroad, whose road enters the United States by ferry, tug-
boat, or towboat, may own and operate a vessel not having a coastwise en-
dorsement in connection with the water transportation of the passenger,
freight, express, baggage, and mail cars used by that road, together with
the passengers, freight, express matter, baggage, and mails transported in
those cars. However, the foreign railroad is subject to the same restrictions
imposed by law on a vessel of the United States entering a port of the
United States from the same foreign country. Except as otherwise author-
ized by this chapter, the ferry, tugboat, or towboat may not, under penalty
of forfeiture, be used in the transportation of merchandise between ports
or places in the United States to which the coastwise laws apply.
‘‘§ 55119. Yukon River
‘‘Section 55102 of this title does not apply to the transportation of mer-
chandise on the Yukon River until the Alaska Railroad is completed and the
Secretary of Transportation finds that proper facilities will be available for
transportation by citizens of the United States to properly handle the traf-
fic.
‘‘§ 55120. Transshipment of imported merchandise intended
for immediate exportation
‘‘The Secretary of Homeland Security may prescribe regulations for the
transshipment and transportation of merchandise that is imported into the
United States by sea for immediate exportation to a foreign port by sea,
or by a river, the right to ascend or descend which for the purposes of com-
merce is secured by treaty to the citizens of the United States and the sub-
jects of a foreign power.
‘‘CHAPTER 553—PASSENGER AND CARGO PREFERENCES
‘‘SUBCHAPTER I—GENERAL
‘‘Sec.
‘‘55301.
Priority loading for coal.
‘‘55302.
Transportation of United States Government personnel.
‘‘55303.
Motor vehicles owned by United States Government personnel.
‘‘55304.
Exports financed by the United States Government.
‘‘55305.
Cargoes procured, furnished, or financed by the United States Government.
187
‘‘SUBCHAPTER II—EXPORT TRANSPORTATION OF AGRICULTURAL
COMMODITIES
‘‘55311.
Findings and purposes.
‘‘55312.
Determining prevailing world market price.
‘‘55313.
Exemption of certain agricultural exports from cargo preference provisions.
‘‘55314.
Transportation requirements for certain exports sponsored by the Secretary of Agri-
culture.
‘‘55315.
Minimum tonnage.
‘‘55316.
Financing the transportation of agricultural commodities.
‘‘55317.
Termination of subchapter.
‘‘55318.
Effect on other law.
‘‘SUBCHAPTER III—AMERICAN GREAT LAKES VESSELS
‘‘55331.
Definitions.
‘‘55332.
Designating American Great Lakes vessels.
‘‘55333.
Exemption from restriction on transporting certain cargo.
‘‘55334.
Restrictions on operations.
‘‘55335.
Revocations and terminations of designations.
‘‘55336.
Civil penalty.
‘‘SUBCHAPTER I—GENERAL
‘‘§ 55301. Priority loading for coal
‘‘A vessel engaged in the coastwise transportation of coal produced in the
United States, from a port in the United States to another port in the
United States, shall be given priority in loading at any of those ports ahead
of a waiting vessel engaged in the export transportation of coal produced
in the United States. However, if the Secretary of Transportation finds that
it is in the national interest, the Secretary may eliminate this priority load-
ing at any port. The Secretary shall report to Congress within 30 days an
action eliminating priority loading under this section.
‘‘§ 55302. Transportation of United States Government per-
sonnel
‘‘(a) IN GENERAL.—An officer or employee of the United States Govern-
ment traveling by sea on official business overseas or to or from a territory
or possession of the United States shall travel and transport personal effects
on a vessel documented under the laws of the United Sates if such a vessel
is available, unless the necessity of the mission requires the use of a foreign
vessel.
‘‘(b) REGULATIONS.—The Administrator of General Services shall pre-
scribe regulations under which agencies may not pay for or reimburse an
officer or employee for travel or transportation expenses incurred on a for-
eign vessel in the absence of satisfactory proof of the necessity of using the
vessel.
‘‘§ 55303. Motor vehicles owned by United States Govern-
ment personnel
‘‘Notwithstanding any other law, privately-owned American shipping serv-
ices may be used to transport motor vehicles owned by personnel of the
United States Government whenever transportation of those vehicles at Gov-
ernment expense is otherwise authorized by law.
188
‘‘§ 55304. Exports financed by the United States Government
‘‘It is the sense of Congress that any loans made by an instrumentality
of the United States Government to foster the exporting of agricultural or
other products shall provide that the products may be transported only on
vessels of the United States unless, as to any or all of those products, the
Secretary of Transportation, after investigation, certifies to the instrumen-
tality that vessels of the United States are not available in sufficient num-
ber, in sufficient tonnage capacity, on necessary schedules, or at reasonable
rates.
‘‘§ 55305. Cargoes procured, furnished, or financed by the
United States Government
‘‘(a) DEFINITION.—In this section, the term ‘privately-owned United
States-flag commercial vessel’ does not include a vessel that, after Sep-
tember 21, 1961, was built or rebuilt outside the United States or docu-
mented under the laws of a foreign country, until the vessel has been docu-
mented under the laws of the United States for at least 3 years.
‘‘(b) MINIMUM TONNAGE.—When the United States Government pro-
cures, contracts for, or otherwise obtains for its own account, or furnishes
to or for the account of a foreign country without provision for reimburse-
ment, any equipment, materials, or commodities, within or without the
United States, or advances funds or credits, or guarantees the convertibility
of foreign currencies in connection with the furnishing of the equipment,
materials, or commodities, the appropriate agencies shall take steps nec-
essary and practicable to ensure that at least 50 percent of the gross ton-
nage of the equipment, materials, or commodities (computed separately for
dry bulk carriers, dry cargo liners, and tankers) which may be transported
on ocean vessels is transported on privately-owned United States-flag com-
mercial vessels, to the extent those vessels are available at fair and reason-
able rates for United States-flag commercial vessels, in a manner that will
ensure a fair and reasonable participation of United States-flag commercial
vessels in those cargoes by geographic areas.
‘‘(c) WAIVERS.—The President, the Secretary of Defense, or Congress (by
concurrent resolution or otherwise) may waive this section temporarily by—
‘‘(1) declaring the existence of an emergency justifying a waiver; and
‘‘(2) notifying the appropriate agencies of the waiver.
‘‘(d) PROGRAMS OF OTHER AGENCIES.—An agency having responsibility
under this section shall administer its programs with respect to this section
under regulations prescribed by the Secretary of Transportation. The Sec-
retary shall review the administration of those programs and report annu-
ally to Congress on their administration.
189
‘‘SUBCHAPTER II—EXPORT TRANSPORTATION OF
AGRICULTURAL COMMODITIES
‘‘§ 55311. Findings and purposes
‘‘(a) FINDINGS.—Congress finds that—
‘‘(1) a productive and healthy agricultural industry and a strong and
active United States maritime industry are vitally important to the eco-
nomic well-being and security of the United States;
‘‘(2) both industries must compete in international markets increas-
ingly dominated by foreign trade barriers and the subsidization prac-
tices of foreign governments; and
‘‘(3) increased agricultural exports and the use of merchant vessels
of the United States contribute positively to the United States balance
of trade and generate employment opportunities in the United States.
‘‘(b) PURPOSES.—The purposes of this subchapter are to—
‘‘(1) enable the Secretary of Agriculture to plan export programs ef-
fectively, by clarifying the ocean transportation requirements applicable
to those programs;
‘‘(2) take immediate and positive steps to promote the growth of the
cargo-carrying capacity of the United States merchant marine;
‘‘(3) expand international trade in United States agricultural com-
modities and products and develop, maintain, and expand markets for
United States agricultural exports;
‘‘(4) improve the efficiency of administration of both the commodity
purchasing and selling activities and the ocean transportation activities
associated with export programs sponsored by the Secretary;
‘‘(5) stimulate and promote the agricultural and maritime industries
of the United States and encourage cooperative efforts by both indus-
tries to address their common problems; and
‘‘(6) provide for the appropriate disposition of these findings and
purposes.
‘‘§ 55312. Determining prevailing world market price
‘‘(a) AGRICULTURAL COMMODITIES
AND PRODUCTS.—The prevailing
world market price for agricultural commodities or their products shall be
determined under this subchapter under procedures prescribed by the Sec-
retary of Agriculture. The Secretary shall prescribe the procedures by regu-
lation, with notice and opportunity for public comment under section 553
of title 5.
‘‘(b) SERVICES
AND NON-AGRICULTURAL COMMODITIES
AND PROD-
UCTS.—If a determination of the prevailing world market price of any other
type of materials, goods, equipment, or service is required to determine
whether a barter or exchange transaction is subject to section 55314(b)(6)
190
or (7) of this title, the determination shall be made by the Secretary of Ag-
riculture in consultation with the heads of other appropriate agencies.
‘‘§ 55313. Exemption of certain agricultural exports from
cargo preference provisions
‘‘Sections 55304 and 55305 of this title do not apply to export activities
of the Secretary of Agriculture or the Commodity Credit Corporation under
which—
‘‘(1) agricultural commodities or their products acquired by the Cor-
poration are made available to United States exporters, users, proc-
essors, or foreign purchasers for the purpose of developing, maintain-
ing, or expanding export markets for United States agricultural com-
modities or their products at prevailing world market prices;
‘‘(2) payments are made available to United States exporters, users,
or processors or, except as provided in section 55314 of this title, cash
grants are made available to foreign purchasers, for the purpose de-
scribed in clause (1);
‘‘(3) commercial credit guarantees are blended with direct credits
from the Corporation to reduce the effective rate of interest on export
sales of United States agricultural commodities or their products;
‘‘(4) credit or credit guarantees for not more than 3 years are ex-
tended by the Corporation to finance or guarantee export sales of
United States agricultural commodities or their products; or
‘‘(5) agricultural commodities or their products owned or controlled
by or under loan from the Corporation are exchanged or bartered for
materials, goods, equipment, or services at least equal in value to the
agricultural commodities or their products for which they are ex-
changed or bartered (determined on the basis of prevailing world mar-
ket prices at the time of the exchange or barter), but this clause does
not exempt from the cargo preference provisions referred to in section
55314(b) of this title any requirement otherwise applicable to the mate-
rials, goods, equipment, or services imported under the transaction.
‘‘§ 55314. Transportation requirements for certain exports
sponsored by the Secretary of Agriculture
‘‘(a) MINIMUM TONNAGE.—
‘‘(1) IN GENERAL.—In addition to the requirement under section
55305 of this title for the transportation of a percentage of gross ton-
nage on United States-flag vessels, 25 percent of the gross tonnage of
agricultural commodities or their products specified in subsection (b)
shall be transported each calendar year on United States-flag commer-
cial vessels that—
‘‘(A) are necessary for national security; and
191
‘‘(B) if more than 25 years old, were rebuilt within the last 5
years and certified by the Secretary of Transportation as having
a useful life of at least 5 years after that rebuilding.
‘‘(2) CALENDAR YEAR.—To provide for effective and equitable ad-
ministration of the cargo preference laws, the calendar year for the
purpose of compliance with minimum percentage requirements is the
12-month period beginning October 1 of each year.
‘‘(b) APPLICABLE EXPORT ACTIVITY.—This section applies to export ac-
tivity (except inspection or weighing activities, other activities carried out
for health or safety, or technical assistance provided in the handling of com-
mercial transactions) of the Secretary of Agriculture or the Commodity
Credit Corporation—
‘‘(1) carried out under the Agricultural Trade Development and As-
sistance Act of 1954 (7 U.S.C. 1691 et seq.);
‘‘(2) carried out under section 416 of the Agricultural Act of 1949
(7 U.S.C. 1431);
‘‘(3) carried out under the Bill Emerson Humanitarian Trust Act (7
U.S.C. 1736f–1);
‘‘(4) under which agricultural commodities or their products are—
‘‘(A) donated through foreign governments or private or public
agencies, including intergovernmental organizations; or
‘‘(B) sold for foreign currencies or for dollars on credit terms
of more than 10 years;
‘‘(5) under which agricultural commodities or their products are
made available for emergency food relief at less than prevailing world
market prices;
‘‘(6) under which a cash grant is made directly or through an inter-
mediary to a foreign purchaser to enable the purchaser to obtain
United States agricultural commodities or their products in an amount
greater than the difference between the prevailing world market price
and the United States market price, free along side vessel at a United
States port; or
‘‘(7) under which agricultural commodities owned or controlled by or
under loan from the Corporation are exchanged or bartered for mate-
rials, goods, equipment, or services produced in foreign countries, ex-
cept export activities described in section 55313(5) of this title.
‘‘(c) ADDITIONAL REQUIREMENTS.—
‘‘(1) APPLICATION OF SECTION 55305.—The requirement for United
States-flag transportation under subsection (a) is subject to the same
terms and conditions as provided in section 55305 of this title.
192
‘‘(2) ALLOCATION OF COMMODITIES.—Subject to paragraph (3), in
carrying out this section and section 55305 of this title, the Corpora-
tion shall take steps necessary and practicable, and consistent with this
section and section 55305, without detriment to any port range to allo-
cate, on the principle of lowest landed cost without regard to the coun-
try of documentation of the vessel, 25 percent of the bagged, processed,
or fortified commodities provided under title II of the Agricultural
Trade Development and Assistance Act of 1954 (7 U.S.C. 1721 et
seq.).
‘‘(3) CALCULATIONS.—In carrying out paragraph (2), first there
shall be calculated the allocation of 100 percent of the quantity to be
procured on an overall lowest landed cost basis without regard to the
country of documentation of the vessel, and then there shall be allo-
cated to the Great Lakes port range any cargoes for which it has the
lowest landed cost under that calculation. The requirements for United
States-flag transportation under this section and section 55305 of this
title do not apply to commodities allocated to the Great Lakes port
range under paragraph (2). To the extent that the Great Lakes port
range is used to furnish and transport less than 25 percent of the total
annual tonnage of commodities to which paragraph (2) applies, the
commodities allocated to the Great Lakes port range under paragraph
(2) may not be reallocated or diverted to another port range to meet
the requirements for United States-flag transportation under this sec-
tion and section 55305 of this title.
‘‘(4) AWARDING CONTRACTS.—In awarding a contract for the trans-
portation by vessel of commodities from the Great Lakes port range
pursuant to an export activity referred to in subsection (b), an
agency—
‘‘(A) shall consider expressions of freight interest for any vessel
from a vessel operator who meets reasonable requirements for fi-
nancial and operational integrity; and
‘‘(B) may not deny award of the contract to a person based on
the type of vessel on which the transportation would be provided
(including on the basis that the transportation would not be pro-
vided on a liner vessel, as that term is used in the Shipping Act
of 1984, as in effect on November 14, 1995), if the person other-
wise satisfies reasonable requirements for financial and operational
integrity.
‘‘(5) NONAVAILABILITY OF VESSELS.—A determination of nonavail-
ability of United States-flag vessels resulting from the application of
this subsection may not reduce the gross tonnage of commodities re-
193
quired by this section and section 55305 of this title to be transported
on United States-flag vessels.
‘‘§ 55315. Minimum tonnage
‘‘(a) DEFINITION.—In this section, the term ‘base period’ means the 5-
year period running from the sixth through the second prior fiscal years.
‘‘(b) REQUIREMENT.—For each fiscal year, the minimum quantity of ag-
ricultural commodities to be exported under programs subject to section
55314 of this title is the average of the tonnage exported under those pro-
grams during the base period, discarding the high and low years.
‘‘(c) WAIVERS.—The President may waive the minimum quantity for a
fiscal year under this section if the President determines and reports to
Congress, together with reasons, that the quantity cannot be used effectively
for the purposes of those programs or, based on a certification by the Sec-
retary of Agriculture, that the commodities are not available for reasons
that include the unavailability of funds.
‘‘§ 55316. Financing the transportation of agricultural com-
modities
‘‘(a) FINANCING OF INCREASED CHARGES.—The Secretary of Transpor-
tation shall finance any increased ocean freight charges incurred in any fis-
cal year that result from the application of section 55314 of this title.
‘‘(b) REIMBURSEMENT OF INCREASED CHARGES.—
‘‘(1) IN GENERAL.—The Secretary of Transportation shall reimburse
the Secretary of Agriculture and the Commodity Credit Corporation for
the amount by which, in any fiscal year—
‘‘(A) the total cost of ocean freight and ocean freight differen-
tial for which obligations are incurred by the Secretary of Agri-
culture and the Corporation on exports of agricultural commodities
and their products under the agricultural export programs speci-
fied in section 55314(b) of this title; exceeds
‘‘(B) 20 percent of the value of the commodities and their prod-
ucts and the cost of the ocean freight and ocean freight differen-
tial on which obligations are incurred by the Secretary of Agri-
culture and the Corporation during that fiscal year.
‘‘(2) COMMODITIES SHIPPED FROM INVENTORY.—For purposes of
this subsection, commodities shipped from the inventory of the Cor-
poration shall be valued as provided in section 412(d) of the Agricul-
tural Trade Development and Assistance Act of 1954 (7 U.S.C.
1736f(d)).
‘‘(c) ISSUANCE AND PURCHASE OF OBLIGATIONS.—
‘‘(1) ISSUANCE.—To meet the expenses required to be assumed
under subsections (a) and (b), the Secretary of Transportation shall
194
issue obligations to the Secretary of the Treasury. The Secretary of
Transportation, with the approval of the Secretary of the Treasury,
shall prescribe the form, denomination, maturity, and other terms (ex-
cept the interest rate) of the obligations. The Secretary of the Treasury
shall set the interest rate for the obligations, considering the average
market yield on outstanding marketable obligations of the United
States Government of comparable maturities during the month before
the obligations are issued.
‘‘(2) PURCHASE.—The Secretary of the Treasury shall purchase the
obligations issued under this subsection. To purchase the obligations,
the Secretary of the Treasury may use as a public debt transaction the
proceeds from the sale of securities issued under chapter 31 of title 31.
The purposes for which securities may be issued under that chapter are
extended to include the purchase of obligations under this subsection.
A redemption or purchase of the obligations by the Secretary of the
Treasury is a public debt transaction of the Government.
‘‘(d) SOURCE OF FUNDS FOR REIMBURSEMENT.—Reimbursement of the
Secretary of Transportation for costs incurred under this section shall be
made with appropriated funds rather than through cancellation of notes.
‘‘(e) APPROPRIATIONS.—
‘‘(1) AUTHORIZATION.—Each fiscal year, there is authorized to be
appropriated an amount sufficient to reimburse the Secretary of Trans-
portation for the costs incurred under this section, including adminis-
trative expenses and the principal and interest due on obligations
issued to the Secretary of the Treasury.
‘‘(2) APPROPRIATION FOR ADMINISTRATIVE EXPENSES.—Each fiscal
year, such amounts as may be necessary are hereby appropriated to
pay interest and to liquidate debt on obligations issued to the Secretary
of the Treasury under this section.
‘‘(f) NOTIFICATION TO CONGRESS OF INSUFFICIENCY.—If the Secretary
of Transportation is unable to obtain the funds necessary to finance the in-
creased ocean freight charges resulting from the requirements of subsections
(a) and (b) and section 55314(a) of this title, the Secretary shall notify
Congress within 10 working days of the discovery of the insufficiency.
‘‘§ 55317. Termination of subchapter
‘‘This subchapter terminates 90 days after the date on which a notifica-
tion is made under section 55316(f) of this title, except for shipments of
agricultural commodities and their products subject to contracts made be-
fore the end of that 90-day period, unless within that 90-day period the Sec-
retary of Transportation proclaims that funds are available to finance in-
creased freight charges resulting from the requirements of sections
195
55314(a) and 55316(a) and (b) of this title. On the termination of this sub-
chapter under this section—
‘‘(1) this subchapter does not exempt export activities from, or sub-
ject export activities to, the cargo preference laws; and
‘‘(2) the 50-percent requirement in section 55305 of this title re-
mains in effect.
‘‘§ 55318. Effect on other law
‘‘This subchapter does not affect chapter 5 of title 5.
‘‘SUBCHAPTER III—AMERICAN GREAT LAKES VESSELS
‘‘§ 55331. Definitions
‘‘In this subchapter:
‘‘(1) AMERICAN GREAT LAKES VESSEL.—The term ‘American Great
Lakes vessel’ means a vessel so designated under section 55332 of this
title, but only during the period the designation is in effect.
‘‘(2) GREAT LAKES.—The term ‘Great Lakes’ means Lake Superior,
Lake Michigan, Lake Huron, Lake Erie, Lake Ontario, the Saint Law-
rence River west of Saint Regis, New York, and their connecting and
tributary waters.
‘‘(3) GREAT
LAKES
SHIPPING
SEASON.—The term ‘Great Lakes
shipping season’ means the period each year during which the Saint
Lawrence Seaway is open for navigation by vessels, as declared by the
Saint Lawrence Seaway Development Corporation.
‘‘§ 55332. Designating American Great Lakes vessels
‘‘(a) DESIGNATIONS.—The Secretary of Transportation shall designate a
vessel as an American Great Lakes vessel if—
‘‘(1) an application for designation is submitted to the Secretary
under regulations prescribed by the Secretary;
‘‘(2) the vessel is documented under the laws of the United States;
‘‘(3) the vessel, on the effective date of the designation, is—
‘‘(A) at least 1, but not more than 6, years old; or
‘‘(B) at least 1, but not more than 11, years old if the Secretary
finds that suitable vessels are not available to provide the type of
service for which the vessel will be used after the designation;
‘‘(4) the vessel has not previously been designated as an American
Great Lakes vessel; and
‘‘(5) the owner makes an agreement as provided under subsection
(b).
‘‘(b) AGREEMENTS.—A vessel may be designated as an American Great
Lakes vessel only if the person that will be the owner of the vessel at the
time of the designation makes an agreement with the Secretary providing
that if the Secretary determines that the vessel is necessary to the defense
196
of the United States, the United States Government will have an exclusive
right, during the 120-day period following the date of a revocation of the
designation under section 55335 of this title, to purchase the vessel for a
price equal to the greater of—
‘‘(1) the approximate world market value of the vessel; or
‘‘(2) the cost of the vessel to the owner less a reasonable amount
for depreciation.
‘‘(c) CERTAIN FOREIGN DOCUMENTATION
AND SALE NOT PROHIB-
ITED.—Notwithstanding any other law, if the Government does not exercise
its right of purchase under an agreement under subsection (b), the owner
of the vessel is not prohibited from—
‘‘(1) documenting the vessel under the laws of a foreign country; or
‘‘(2) selling the vessel to a person not a citizen of the United States.
‘‘(d) REGULATIONS.—The Secretary shall prescribe regulations estab-
lishing requirements for submitting applications under this section.
‘‘§ 55333. Exemption from restriction on transporting cer-
tain cargo
‘‘The 3-year documentation requirement of section 55305(a) of this title
does not apply to a vessel designated as an American Great Lakes vessel
during the period of its designation.
‘‘§ 55334. Restrictions on operations
‘‘(a) PROHIBITIONS.—Except as provided in subsection (b), an American
Great Lakes vessel may not be used to—
‘‘(1) engage in trade—
‘‘(A) from a port in the United States that is not located on
the Great Lakes; or
‘‘(B) between ports in the United States;
‘‘(2) transport bulk cargo (as defined in section 40102 of this title)
that is subject to section 55305 or 55314 of this title or section 2631
of title 10; or
‘‘(3) provide a service (except ocean freight service) as—
‘‘(A) a contract carrier; or
‘‘(B) a common carrier on a fixed advertised schedule offering
frequent sailings at regular intervals in the foreign trade of the
United States.
‘‘(b) OFF-SEASON EXCEPTION.—An American Great Lakes vessel may be
used for not more than 90 days during any 12-month period to engage in
trade prohibited by subsection (a)(1)(A), except during the Great Lakes
shipping season.
197
‘‘§ 55335. Revocations and terminations of designations
‘‘(a) REVOCATIONS.—After notice and an opportunity for a hearing, the
Secretary of Transportation may revoke a designation of a vessel as an
American Great Lakes vessel if the Secretary finds that—
‘‘(1) the vessel does not meet a requirement for the designation;
‘‘(2) the vessel has been operated in violation of this subchapter; or
‘‘(3) the owner or operator of the vessel has violated an agreement
made under section 55332(b) of this title.
‘‘(b) TERMINATIONS.—On petition and a showing of good cause by the
owner of a vessel, the Secretary may terminate the designation of a vessel
as an American Great Lakes vessel. The Secretary may impose conditions
in a termination order to prevent significant adverse effects on other opera-
tors of United States-flag vessels.
‘‘§ 55336. Civil penalty
‘‘After notice and an opportunity for a hearing, the Secretary of Trans-
portation may impose a civil penalty of not more than $1,000,000 on the
owner of an American Great Lakes vessel for any act for which the designa-
tion may be revoked under section 55335 of this title.
‘‘CHAPTER 555—MISCELLANEOUS
‘‘Sec.
‘‘55501.
Mobile trade fairs.
‘‘§ 55501. Mobile trade fairs
‘‘(a) IN GENERAL.—The Secretary of Commerce shall encourage and pro-
mote the development and use of mobile trade fairs designed to show and
sell the products of United States business and agriculture at foreign ports
and at other commercial centers throughout the world where the operators
of the fairs use, insofar as practicable, vessels and aircraft of the United
States in transporting their exhibits.
‘‘(b) TECHNICAL AND FINANCIAL ASSISTANCE.—When the Secretary de-
termines that a mobile trade fair provides an economical and effective
means of promoting export sales, the Secretary may provide to the operator
of the fair—
‘‘(1) technical assistance and support; and
‘‘(2) financial assistance to defray certain expenses incurred outside
the United States, except the cost of transportation on foreign vessels
and aircraft.
‘‘(c) USE OF FOREIGN CURRENCIES.—To carry out this section, the
President may use, in addition to amounts appropriated to carry out trade
promotion activities, foreign currencies owned by or owed to the United
States Government.
198
‘‘PART E—CONTROL OF MERCHANT MARINE CAPABILITIES
‘‘CHAPTER 561—RESTRICTIONS ON TRANSFERS
‘‘Sec.
‘‘56101.
Approval required to transfer vessel to noncitizen.
‘‘56102.
Additional controls during war or national emergency.
‘‘56103.
Conditional approvals.
‘‘56104.
Penalty for false statements.
‘‘56105.
Forfeiture procedure.
‘‘§ 56101. Approval required to transfer vessel to noncitizen
‘‘(a) RESTRICTIONS.—
‘‘(1) IN GENERAL.—Except as otherwise provided in this section,
section 12119 of this title, or section 611 of the Merchant Marine Act,
1936, a person may not, without the approval of the Secretary of
Transportation—
‘‘(A) sell, lease, charter, deliver, or in any other manner trans-
fer, or agree to sell, lease, charter, deliver, or in any other manner
transfer, to a person not a citizen of the United States, an interest
in or control of—
‘‘(i) a documented vessel owned by a citizen of the United
States; or
‘‘(ii) a vessel last documented under the laws of the United
States; or
‘‘(B) place under foreign registry, or operate under the author-
ity of a foreign country, a documented vessel or a vessel last docu-
mented under the laws of the United States.
‘‘(2) EXCEPTIONS.—Paragraph (1)(A) does not apply to a vessel
that has been operated only for pleasure or only as a fishing vessel,
fish processing vessel, or fish tender vessel (as defined in section 2101
of this title).
‘‘(b) APPROVAL BEFORE DOCUMENTATION.—To promote financing with
respect to a vessel to be documented under chapter 121 of this title, the
Secretary may grant approval under subsection (a) before the vessel is docu-
mented.
‘‘(c) EXCEPTIONS.—Notwithstanding any other provision of this subtitle,
the Merchant Marine Act, 1936, or any contract with the Secretary made
under this subtitle or that Act, a person may place a vessel under foreign
registry without the approval of the Secretary if—
‘‘(1)(A) the Secretary, in conjunction with the Secretary of Defense,
determines that at least one replacement vessel of equal or greater mili-
tary capability and of a capacity that is equivalent or greater, as meas-
ured by deadweight tons, gross tons, or container equivalent units, as
appropriate, is documented under chapter 121 of this title by the owner
of the vessel placed under foreign registry; and
199
‘‘(B) the replacement vessel is not more than 10 years old on the
date of that documentation; or
‘‘(2) an operating agreement covering the vessel under chapter 531
of this title has expired.
‘‘(d) STATUS OF PROHIBITED TRANSACTION.—A charter, sale, or trans-
fer of a vessel, or of an interest in or control of a vessel, in violation of
this section is void.
‘‘(e) PENALTIES.—
‘‘(1) CRIMINAL PENALTY.—A person that knowingly sells, charters,
or transfers a vessel, or an interest in or control of a vessel, in violation
of this section shall be fined under title 18, imprisoned for not more
than 5 years, or both.
‘‘(2) CIVIL PENALTY.—A person that sells, charters, or transfers a
vessel, or an interest in or control of a vessel, in violation of this sec-
tion is liable to the United States Government for a civil penalty of
not more than $10,000 for each violation.
‘‘(3) FORFEITURE.—A documented vessel may be seized by and for-
feited to the Government if, in violation of this section, a person—
‘‘(A) knowingly sells, charters, or transfers the vessel or an in-
terest in or control of the vessel; or
‘‘(B) places the vessel under foreign registry or operates the
vessel under the authority of a foreign country.
‘‘§ 56102. Additional controls during war or national emer-
gency
‘‘(a) IN GENERAL.—During war, or a national emergency declared by
Presidential proclamation, a person may not, without the approval of the
Secretary of Transportation—
‘‘(1) place under foreign registry or flag a vessel owned in whole or
in part by a citizen of the United States or a corporation incorporated
under the laws of the United States or of a State;
‘‘(2) sell, mortgage, lease, charter, deliver, or in any other manner
transfer, or agree to sell, mortgage, lease, charter, deliver, or in any
other manner transfer, to a person not a citizen of the United States—
‘‘(A) a vessel owned as described in clause (1), or an interest
therein;
‘‘(B) a vessel documented under the laws of the United States,
or an interest therein; or
‘‘(C) a facility for building or repairing vessels, or an interest
therein;
‘‘(3) issue, assign, or transfer to a person not a citizen of the United
States an instrument of indebtedness secured by a mortgage of a vessel
200
to a trustee, by an assignment of an owner’s interest in a vessel under
construction to a trustee, or by a mortgage of a facility for building
or repairing vessels to a trustee, unless the trustee or a substitute
trustee is approved by the Secretary under subsection (b);
‘‘(4) enter into an agreement or understanding to construct a vessel
in the United States for, or to be delivered to, a person not a citizen
of the United States without expressly stipulating that construction will
not begin until after the war or national emergency has ended;
‘‘(5) enter into an agreement or understanding whereby there is vest-
ed in, or for the benefit of, a person not a citizen of the United States
the controlling interest in a corporation that is incorporated under the
laws of the United States or a State and that owns a vessel or facility
for building or repairing vessels; or
‘‘(6) cause or procure a vessel, constructed in whole or in part in
the United States and never cleared for a foreign port, to depart from
a port of the United States before it has been documented under the
laws of the United States.
‘‘(b) TRUSTEES.—
‘‘(1) APPROVAL.—The Secretary shall approve a trustee or sub-
stitute trustee under subsection (a)(3) if and only if the trustee is a
bank or trust company that—
‘‘(A) is organized as a corporation, and is doing business, under
the laws of the United States or a State;
‘‘(B) is authorized under those laws to exercise corporate trust
powers;
‘‘(C) is a citizen of the United States;
‘‘(D) is subject to supervision or examination by Federal or
State authority; and
‘‘(E) has a combined capital and surplus (as set forth in its
most recent published report of condition) of at least $3,000,000.
‘‘(2) DISAPPROVAL.—If a trustee or substitute trustee ceases to meet
the conditions in paragraph (1), the Secretary shall disapprove the
trustee or substitute trustee. After the disapproval, the restrictions on
transfer or assignment without the Secretary’s approval in subsection
(a)(3) apply.
‘‘(3) OPERATION OF VESSEL.—During a period when subsection (a)
applies, a trustee referred to in subsection (a)(3), even though ap-
proved as a trustee by the Secretary, may not operate the vessel under
the mortgage or assignment without the Secretary’s approval.
‘‘(c) STATUS OF PROHIBITED TRANSACTION.—A transaction in violation
of this section is void.
201
‘‘(d) RECOVERY OF CONSIDERATION.—
‘‘(1) IN GENERAL.—A person that deposited or paid consideration in
connection with a transaction prohibited by this section may recover
the consideration after tender of the vessel, facility, stock, or other se-
curity, or interest therein, to the person entitled to it, or the forfeiture
thereof to the United States Government.
‘‘(2) EXCEPTION.—Paragraph (1) does not apply if the person in
whose interest the consideration was deposited, or to whom it was paid,
entered into the transaction in the belief that the person depositing or
paying the consideration was a citizen of the United States.
‘‘(e) PENALTIES.—
‘‘(1) CRIMINAL PENALTY.—A person that violates, or attempts or
conspires to violate, this section shall be fined under title 18, impris-
oned for not more than 5 years, or both.
‘‘(2) FORFEITURE.—The following shall be forfeited to the Govern-
ment:
‘‘(A) A vessel, a facility for building or repairing vessels, or an
interest in a vessel or such a facility, that is sold, mortgaged,
leased, chartered, delivered, transferred, or documented, or agreed
to be sold, mortgaged, leased, chartered, delivered, transferred, or
documented, in violation of this section.
‘‘(B) Stock and other securities sold or transferred, or agreed
to be sold or transferred, in violation of this section.
‘‘(C) A vessel departing in violation of subsection (a)(6).
‘‘§ 56103. Conditional approvals
‘‘(a) IN GENERAL.—In approving an act or transaction under section
56101 or 56102 of this title, the Secretary of Transportation may do so
absolutely or upon conditions the Secretary considers advisable. The Sec-
retary shall state the conditions in the notice of approval.
‘‘(b) VIOLATIONS.—A violation of a condition of approval is subject to the
same penalties as a violation resulting from an act done without the re-
quired approval. The violation occurs at the time the condition is violated.
‘‘§ 56104. Penalty for false statements
‘‘A person that knowingly makes a false statement of a material fact to
the Secretary of Transportation or another officer, employee, or agent of the
Department of Transportation, to obtain the Secretary’s approval under sec-
tion 56101 or 56102 of this title, shall be fined under title 18, imprisoned
for not more than 5 years, or both.
202
‘‘§ 56105. Forfeiture procedure
‘‘(a) IN GENERAL.—A forfeiture under this chapter may be enforced in
the same way as a forfeiture under the laws on the collection of duties.
However, such a forfeiture may be remitted without seizure of the vessel.
‘‘(b) PRIOR CONVICTIONS.—In a proceeding under this chapter to enforce
a forfeiture, a prior criminal conviction of a person for a violation of this
chapter with respect to the subject matter of the forfeiture is prima facie
evidence of the violation against the person convicted.
‘‘CHAPTER 563—EMERGENCY ACQUISITION OF VESSELS
‘‘Sec.
‘‘56301.
General authority.
‘‘56302.
Charter terms.
‘‘56303.
Compensation.
‘‘56304.
Disputed compensation.
‘‘56305.
Vessel encumbrances.
‘‘56306.
Use and transfer of vessels.
‘‘56307.
Return of vessels.
‘‘§ 56301. General authority
‘‘During a national emergency declared by Presidential proclamation, or
a period for which the President has proclaimed that the security of the na-
tional defense makes it advisable, the Secretary of Transportation may req-
uisition or purchase, or requisition or charter the use of, a vessel owned by
citizens of the United States, a documented vessel, or a vessel under con-
struction in the United States.
‘‘§ 56302. Charter terms
‘‘(a) IN GENERAL.—If a vessel is requisitioned for use but not ownership
under this chapter, the Secretary of Transportation, at the time of requisi-
tion or as soon thereafter as the situation allows, shall offer the person enti-
tled to possession of the vessel a charter containing—
‘‘(1) the terms the Secretary believes should govern the relationship
between the United States Government and the person; and
‘‘(2) the rate of hire the Secretary considers just compensation for
the use of the vessel and the services required under the charter.
‘‘(b) REFUSAL TO ACCEPT.—If the person does not accept the charter
and rate of hire, the parties shall proceed as provided in section 56304 of
this title.
‘‘§ 56303. Compensation
‘‘(a) IN GENERAL.—As soon as practicable, the Secretary of Transpor-
tation shall determine and pay just compensation for a vessel requisitioned
under this chapter.
‘‘(b) FACTORS NOT AFFECTING VALUE.—The value of a vessel may not
be considered enhanced by the circumstances requiring its requisition. Con-
sequential damages arising from the requisition may not be paid.
‘‘(c) EFFECT OF CONSTRUCTION-DIFFERENTIAL SUBSIDY.—
203
‘‘(1) IF PAID.—If a construction-differential subsidy has been paid
for the vessel, the value of the vessel at the time of requisition shall
be determined under section 802 of the Merchant Marine Act, 1936.
‘‘(2) IF NOT PAID.—If a construction-differential subsidy has not
been paid for the vessel, the value of any national defense features pre-
viously paid for by the United States Government shall be excluded.
‘‘(d) LOSS OR DAMAGE DURING CHARTER.—If a vessel is lost or dam-
aged by a risk assumed by the Government under the charter, but a valu-
ation for the vessel or a means of compensation has not been agreed to,
the Secretary shall pay just compensation for the loss or damage, to the
extent the person is not reimbursed through insurance.
‘‘§ 56304. Disputed compensation
‘‘If the person entitled to compensation disputes the amount of just com-
pensation determined by the Secretary of Transportation under this chapter,
the Secretary shall pay the person, as a tentative advance, 75 percent of
the amount determined. The person may bring a civil action against the
United States Government to recover just compensation. If the tentative ad-
vance paid under this section is greater than the amount of the court’s
judgment, the person shall refund the difference.
‘‘§ 56305. Vessel encumbrances
‘‘(a) IN GENERAL.—The existence of an encumbrance on a vessel does
not prevent the requisition of the vessel under this chapter.
‘‘(b) DEPOSIT IN TREASURY.—
‘‘(1) IN
GENERAL.—If an encumbrance exists, the Secretary of
Transportation may deposit part of the compensation or advance of
compensation to be paid under this chapter (but not more than the
total amount of all encumbrances) in a fund in the Treasury. The Sec-
retary shall publish notice of the creation of the fund in the Federal
Register.
‘‘(2) AVAILABILITY OF AMOUNTS DEPOSITED.—Amounts deposited in
the fund shall be available to pay the compensation or any of the en-
cumbrances (including encumbrances stipulated to in a court of the
United States or a State) existing at the time the vessel was requi-
sitioned.
‘‘(c) CIVIL ACTION.—
‘‘(1) IN GENERAL.—Within 6 months after publication of notice
under subsection (b), the holder of an encumbrance may bring a civil
action in admiralty, according to the principles of libels in rem, against
the fund.
‘‘(2) VENUE.—The action must be brought in the district court of
the United States—
204
‘‘(A) from whose custody the vessel was or may be requisitioned;
or
‘‘(B) in whose district the vessel was located when it was requi-
sitioned.
‘‘(3) SERVICE OF PROCESS.—Service of process shall be made on the
appropriate United States Attorney, the Attorney General, and the Sec-
retary, in the manner provided by the Federal Rules of Civil Procedure
(28 App. U.S.C.). Notice of the action shall be given to all interested
persons as ordered by the court.
‘‘(4) AS BETWEEN PRIVATE PARTIES.—The action shall proceed and
be determined according to the principles of law and the rules of prac-
tice applicable in like cases between private parties.
‘‘§ 56306. Use and transfer of vessels
‘‘(a) IN GENERAL.—The Secretary of Transportation may repair, recon-
dition, reconstruct, operate, or charter for operation, a vessel acquired under
this chapter.
‘‘(b) TRANSFER TO OTHER AGENCIES.—The Secretary may transfer the
possession or control of a vessel acquired under this chapter to another de-
partment or agency of the United States Government on terms and condi-
tions approved by the President. The department or agency shall promptly
reimburse the Secretary for expenditures for just compensation, purchase
price, charter hire, repairs, reconditioning, or reconstruction.
‘‘§ 56307. Return of vessels
‘‘When a vessel requisitioned for use but not ownership is returned to the
owner, the Secretary of Transportation shall—
‘‘(1) return the vessel in a condition at least as good as when taken,
less ordinary wear and tear; or
‘‘(2) pay the owner an amount sufficient to recondition the vessel to
that condition, less ordinary wear and tear.
‘‘CHAPTER 565—ESSENTIAL VESSELS AFFECTED BY
NEUTRALITY ACT
‘‘Sec.
‘‘56501.
Definition.
‘‘56502.
Adjusting obligations and arranging maintenance.
‘‘56503.
Types of adjustments and arrangements.
‘‘56504.
Changes in adjustments and arrangements.
‘‘§ 56501. Definition
‘‘In this chapter, the term ‘essential vessel’ means a vessel that is—
‘‘(1)(A) security for a mortgage indebtedness to the United States
Government; or
‘‘(B) constructed under this subtitle or required by a contract under
this subtitle to be operated on a certain essential foreign trade route;
and
205
‘‘(2) necessary in the interests of commerce and national defense to
be maintained in condition for prompt use.
‘‘§ 56502. Adjusting obligations and arranging maintenance
‘‘(a) GENERAL AUTHORITY.—On written application, the Secretary of
Transportation may adjust obligations and arrange for maintenance of an
essential vessel as provided in this chapter if the Secretary determines, after
any investigation or proceeding the Secretary considers desirable, that—
‘‘(1) the operation of the vessel in the service, route, or line to which
it is assigned under this subtitle, or in which it otherwise would be op-
erated, is not—
‘‘(A) lawful under the Neutrality Act of 1939 (22 U.S.C. 441
et seq.) or a proclamation issued under that Act; or
‘‘(B) compatible with maintaining the availability of the vessel
for national defense and commerce;
‘‘(2) it is not feasible under existing law to employ the vessel in any
other service or operation in foreign or domestic trade (except tem-
porary or emergency operation under section 56503(b)(5) of this title);
and
‘‘(3) the applicant, because of the restrictions of the Neutrality Act
of 1939 (22 U.S.C. 441 et seq.) or the withdrawal of vessels for na-
tional defense under clause (1), is not earning or will not earn a rea-
sonable return on the capital necessarily employed in its business.
‘‘(b) EFFECTIVE PERIOD.—Adjustments and arrangements under sub-
section (a) shall continue in effect only as long as the circumstances de-
scribed in subsection (a) continue to exist.
‘‘§ 56503. Types of adjustments and arrangements
‘‘(a) SUSPENSION
REQUIREMENTS.—An adjustment or arrangement
under this chapter shall include suspension of—
‘‘(1) the requirement to operate the vessel in foreign trade under the
applicable operating-differential or construction-differential subsidy
contract or mortgage or other agreement; and
‘‘(2) the right to operating-differential subsidy for the vessel.
‘‘(b) DISCRETIONARY ADJUSTMENTS AND ARRANGEMENTS.—To the ex-
tent the Secretary of Transportation considers appropriate to carry out the
purposes of this subtitle, an adjustment or arrangement under this chapter
may include any of the following:
‘‘(1) Lay-up of the vessel by the owner or in the custody of the Sec-
retary, with payment or reimbursement by the Secretary of necessary
and proper expenses (including reasonable overhead and insurance) or
a fixed periodic allowance instead of payment or reimbursement.
206
‘‘(2) Postponement, for not more than the total period of the lay-
up, of the maturity date of each installment of the principal of obliga-
tions to the United States Government for the vessel (regardless of
whether the maturity date is during a lay-up period), or rearrangement
of those maturities.
‘‘(3) Postponement or cancellation of interest accruing on the obliga-
tions during a lay-up period.
‘‘(4) Extension, for not more than the total period of the lay-up, of
the 20-year life limitation for the vessel and other limitations and pro-
visions of this subtitle based on a 20-year life.
‘‘(5) Provision for temporary or emergency employment of the vessel
(instead of lay-up) as may be practicable, with such arrangements for
management of the vessel, payment of expenses, and application of the
proceeds of the employment, as the Secretary may approve, with any
period of operation being included as part of the lay-up period.
‘‘(6) Payment to the Secretary, on termination of the arrangements
with the applicant, of the applicant’s net profits (earned while the ar-
rangements were in effect) in excess of 10 percent a year on the capital
necessarily employed in the applicant’s business, as reimbursement for
obligations postponed or canceled and expenses incurred or paid by the
Secretary under this section.
‘‘(c) LAID-UP VESSELS.—Under subsection (b)(6), capital of the appli-
cant represented by a vessel of the applicant laid-up or operated under this
section shall be included in capital necessarily employed in the applicant’s
business. The Secretary may require a vessel laid-up or operated under this
section to be security for reimbursement.
‘‘§ 56504. Changes in adjustments and arrangements
‘‘The Secretary of Transportation may change an adjustment or arrange-
ment made under this chapter as the Secretary considers necessary to carry
out this chapter.
‘‘PART F—GOVERNMENT-OWNED MERCHANT VESSELS
‘‘CHAPTER 571—GENERAL AUTHORITY
‘‘Sec.
‘‘57101.
Placement of vessels in National Defense Reserve Fleet.
‘‘57102.
Disposition of vessels not worth preserving.
‘‘57103.
Sale of obsolete vessels in National Defense Reserve Fleet.
‘‘57104.
Acquisition of vessels from sale of obsolete vessels.
‘‘57105.
Acquisition of vessels for essential services, routes, or lines.
‘‘57106.
Maintenance, improvement, and operation of vessels.
‘‘57107.
Vessels for other agencies.
‘‘57108.
Consideration of ballast and equipment in determining selling price.
‘‘57109.
Operation of vessels purchased, chartered, or leased from Secretary of Transpor-
tation.
207
‘‘§ 57101. Placement of vessels in National Defense Reserve
Fleet
‘‘(a) IN GENERAL.—Any vessel acquired by the Maritime Administration
shall be placed in the National Defense Reserve Fleet maintained under sec-
tion 11 of the Merchant Ship Sales Act of 1946 (50 App. U.S.C. 1744).
‘‘(b) REMOVAL FROM FLEET.—A vessel placed in the Fleet under sub-
section (a) may not be traded out or sold from the Fleet, except as provided
in section 57102, 57103, or 57104 or chapter 533, 537, 573, or 575 of this
title.
‘‘§ 57102. Disposition of vessels not worth preserving
‘‘(a) IN GENERAL.—If the Secretary of Transportation determines that
a vessel owned by the Maritime Administration is of insufficient value for
commercial or military operation to warrant its further preservation, the
Secretary may scrap the vessel or sell the vessel for cash.
‘‘(b) SELLING PROCEDURE.—The sale of a vessel under subsection (a)
shall be made on the basis of competitive sealed bids, after an appraisal and
due advertisement. The purchaser does not have to be a citizen of the
United States. The purchaser shall provide a surety bond, with a surety ap-
proved by the Secretary, to ensure that the vessel will not be operated in
the foreign trade of the United States at any time within 10 years after
the sale, in competition with a vessel owned by a citizen of the United
States and documented under the laws of the United States.
‘‘§ 57103. Sale of obsolete vessels in National Defense Re-
serve Fleet
‘‘(a) IN GENERAL.—The Secretary of Transportation may convey the
right, title, and interest of the United States Government in any vessel of
the National Defense Reserve Fleet that has been identified by the Sec-
retary as an obsolete vessel of insufficient value to warrant its further pres-
ervation, if the recipient—
‘‘(1) is a non-profit organization, a State, or a municipal corporation
or political subdivision of a State;
‘‘(2) agrees not to use, or allow others to use, the vessel for commer-
cial transportation purposes;
‘‘(3) agrees to make the vessel available to the Government whenever
the Secretary indicates that it is needed by the Government;
‘‘(4) agrees to hold the Government harmless for any claims arising
from exposure to asbestos, polychlorinated biphenyls, lead paint, or
other hazardous substances after conveyance of the vessel, except for
claims arising from use of the vessel by the Government;
208
‘‘(5) has a conveyance plan and a business plan that describes the
intended use of the vessel, each of which has been submitted to and
approved by the Secretary;
‘‘(6) has provided proof, as determined by the Secretary, of resources
sufficient to accomplish the transfer, necessary repairs and modifica-
tions, and initiation of the intended use of the vessel; and
‘‘(7) agrees that when the recipient no longer requires the vessel for
use as described in the business plan required under clause (5)—
‘‘(A) the recipient will, at the discretion of the Secretary, re-
convey the vessel to the Government in good condition except for
ordinary wear and tear; or
‘‘(B) if the Board of Trustees of the recipient has decided to
dissolve the recipient according to the laws of the State in which
the recipient is incorporated, then—
‘‘(i) the recipient shall distribute the vessel, as an asset of
the recipient, to a person that has been determined exempt
from taxation under section 501(c)(3) of the Internal Rev-
enue Code of 1986 (26 U.S.C. 501(c)(3)), or to the Federal
Government or a State or local government for a public pur-
pose; and
‘‘(ii) the vessel shall be disposed of by a court of competent
jurisdiction of the county in which the principal office of the
recipient is located, for such purposes as the court shall de-
termine, or to such organizations as the court shall determine
are organized exclusively for public purposes.
‘‘(b) OTHER EQUIPMENT.—At the Secretary’s discretion, additional
equipment from other obsolete vessels of the Fleet may be conveyed to assist
the recipient with maintenance, repairs, or modifications.
‘‘(c) ADDITIONAL TERMS.—The Secretary may require any additional
terms the Secretary considers appropriate.
‘‘(d) DELIVERY OF VESSEL.—If conveyance is made under this section,
the vessel shall be delivered to the recipient at a time and place to be deter-
mined by the Secretary. The vessel shall be conveyed in an ‘as is’ condition.
‘‘(e) LIMITATIONS.—If at any time prior to delivery of the vessel to the
recipient, the Secretary determines that a different disposition of the vessel
would better serve the interests of the Government, the Secretary shall pur-
sue the more favorable disposition of the obsolete vessel and shall not be
liable for any damages that may result from an intended recipient’s reliance
upon a proposed transfer.
‘‘(f) REVERSION.—The Secretary shall include in any conveyance under
this section terms under which all right, title, and interest conveyed by the
209
Secretary shall revert to the Government if the Secretary determines the
vessel has been used other than as described in the business plan required
under subsection (a)(5).
‘‘§ 57104. Acquisition of vessels from sale of obsolete vessels
‘‘(a) IN GENERAL.—The Secretary of Transportation may acquire suit-
able documented vessels with amounts in the Vessel Operations Revolving
Fund derived from the sale of obsolete vessels in the National Defense Re-
serve Fleet.
‘‘(b) VALUATION.—The acquired and obsolete vessels shall be valued at
their scrap value in domestic or foreign markets as of the date of the acqui-
sition for or sale from the Fleet. However, the value assigned to those ves-
sels shall be determined on the same basis, with consideration given to the
fair value of the cost of moving the vessel sold from the Fleet to the place
of scrapping.
‘‘(c) COSTS INCIDENT TO LAY-UP.—Costs incident to the lay-up of the
vessel acquired under this section may be paid from amounts in the Fund.
‘‘(d) TRANSFERS TO NON-CITIZENS.—A vessel sold from the Fleet under
this section may be scrapped in an approved foreign market without obtain-
ing additional separate approval from the Secretary to transfer the vessel
to a person not a citizen of the United States.
‘‘§ 57105. Acquisition of vessels for essential services, routes,
or lines
‘‘(a) IN GENERAL.—The Secretary of Transportation may acquire a ves-
sel, by purchase or otherwise, if—
‘‘(1) the Secretary considers the vessel necessary to establish, main-
tain, improve, or serve as a replacement on an essential service, route,
or line in the foreign commerce of the United States, as determined
under section 50103 of this title;
‘‘(2) the vessel was constructed in the United States; and
‘‘(3) the Secretary of the Navy has certified to the Secretary of
Transportation that the vessel is suitable for economical and speedy
conversion into a naval or military auxiliary or otherwise suitable for
use by the United States Government in time of war or national emer-
gency.
‘‘(b) PRICE.—The price paid for the vessel shall be based on a fair and
reasonable valuation. However, the price may not exceed by more than 5
percent the cost of the vessel to the owner (excluding any construction-dif-
ferential subsidy and the cost of national defense features paid by the Sec-
retary of Transportation) plus the actual cost previously expended for recon-
ditioning, less depreciation based on a 25-year life for a dry-cargo or pas-
210
senger vessel and a 20-year life for a tanker or other liquid bulk carrier
vessel.
‘‘(c) DOCUMENTATION.—A vessel acquired under this section that is not
documented under the laws of the United States at the time of acquisition
shall be so documented as soon as practicable.
‘‘§ 57106. Maintenance, improvement, and operation of ves-
sels
‘‘(a) IN GENERAL.—The Secretary of Transportation may maintain, re-
pair, recondition, remodel, and improve vessels owned by the United States
Government and in the possession or under the control of the Secretary, to
equip them adequately for competition in the foreign trade of the United
States. The Secretary may operate such a vessel or charter the vessel on
terms and conditions the Secretary considers appropriate to carry out the
purposes of this subtitle.
‘‘(b) DOCUMENTATION AND RESTRICTIONS ON OPERATION.—A vessel re-
conditioned, remodeled, or improved under subsection (a) shall be docu-
mented under the laws of the United States and remain so documented for
at least 5 years after completion of the reconditioning, remodeling, or im-
provement. During that period, it shall be operated on voyages that are not
exclusively coastwise.
‘‘§ 57107. Vessels for other agencies
‘‘(a) IN GENERAL.—The Secretary of Transportation may construct, re-
construct, repair, equip, and outfit, by contract or otherwise, vessels or
parts thereof, for any other department or agency of the United States Gov-
ernment to the extent the other department or agency is authorized by law
to do so for its own account.
‘‘(b) EFFECT ON CONTRACT AUTHORIZATION.—An obligation incurred or
expenditure made by the Secretary under this section does not affect any
contract authorization of the Secretary, but instead shall be charged against
the existing appropriation or contract authorization of the department or
agency.
‘‘§ 57108. Consideration of ballast and equipment in deter-
mining selling price
‘‘The Maritime Administration may not sell a vessel until its ballast and
equipment have been inventoried and their value considered in determining
the selling price of the vessel.
‘‘§ 57109. Operation of vessels purchased, chartered, or
leased from Secretary of Transportation
‘‘Unless otherwise authorized by the Secretary of Transportation, a vessel
purchased, chartered, or leased from the Secretary may be operated only
under a certificate of documentation with a registry or coastwise endorse-
211
ment. Such a vessel, while employed solely as a merchant vessel, is subject
to the laws, regulations, and liabilities governing merchant vessels, whether
the United States Government has an interest in the vessel as an owner or
holds a mortgage, lien, or other interest.
‘‘CHAPTER 573—VESSEL TRADE-IN PROGRAM
‘‘Sec.
‘‘57301.
Definitions.
‘‘57302.
Authority to acquire vessels.
‘‘57303.
Utility value and tonnage requirements.
‘‘57304.
Eligible acquisition dates.
‘‘57305.
Determination of trade-in allowance.
‘‘57306.
Payment of trade-in allowance.
‘‘57307.
Recognition of gain for tax purposes.
‘‘57308.
Use of vessels at least 25 years old.
‘‘§ 57301. Definitions
‘‘In this chapter:
‘‘(1) NEW VESSEL.—The term ‘new vessel’ means a vessel—
‘‘(A) constructed under this subtitle and acquired within 2 years
after the date of completion; or
‘‘(B) constructed in a domestic shipyard on private account and
not under this subtitle, and documented under the laws of the
United States.
‘‘(2) OBSOLETE VESSEL.—The term ‘obsolete vessel’ means a vessel
that—
‘‘(A) is of at least 1,350 gross tons;
‘‘(B) the Secretary of Transportation believes should, because of
its age, obsolescence, or other reasons, be replaced in the public
interest; and
‘‘(C) has been owned by a citizen of the United States for at
least 3 years immediately before its acquisition under this chapter.
‘‘§ 57302. Authority to acquire vessels
‘‘To promote the construction of new, safe, and efficient vessels to carry
the domestic and foreign waterborne commerce of the United States, the
Secretary of Transportation may acquire an obsolete vessel in exchange for
an allowance of credit toward the cost of construction or purchase of a new
vessel as provided in this chapter.
‘‘§ 57303. Utility value and tonnage requirements
‘‘(a) UTILITY VALUE.—The utility value of a new vessel to be acquired
under this chapter for operation in the domestic or foreign commerce of the
United States may not be substantially less than that of the obsolete vessel
acquired in exchange under this chapter.
‘‘(b) TONNAGE.—If the Secretary of Transportation finds that the new
vessel will have a utility value at least equal to that of the obsolete vessel,
the new vessel may be of lesser gross tonnage than the obsolete vessel. How-
212
ever, the gross tonnage of the new vessel must be at least one-third the
gross tonnage of the obsolete vessel.
‘‘§ 57304. Eligible acquisition dates
‘‘At the option of the owner, the acquisition of an obsolete vessel under
this chapter shall occur—
‘‘(1) when the owner contracts for the construction or purchase of
a new vessel; or
‘‘(2) within 5 days of the actual date of delivery of the new vessel
to the owner.
‘‘§ 57305. Determination of trade-in allowance
‘‘(a) IN GENERAL.—The Secretary of Transportation shall determine the
trade-in allowance for an obsolete vessel at the time of acquisition of the
vessel. The allowance shall be the fair value of the vessel. In determining
the value, the Secretary shall consider—
‘‘(1) the scrap value of the obsolete vessel in American and foreign
markets;
‘‘(2) the depreciated value based on a 20-year or 25-year life, which-
ever applies to the obsolete vessel; and
‘‘(3) the market value of the obsolete vessel for operation in world
commerce or in the domestic or foreign commerce of the United States.
‘‘(b) USE OF OBSOLETE VESSELS.—If acquisition of the obsolete vessel
occurs when the owner contracts for the construction of the new vessel, and
the owner uses the obsolete vessel during the period of construction of the
new vessel, the Secretary shall reduce the trade-in allowance by an amount
representing the fair value of that use. The Secretary shall establish the
rate for use of the obsolete vessel when the contract for construction of the
new vessel is made.
‘‘§ 57306. Payment of trade-in allowance
‘‘(a) ACQUISITION AT TIME OF CONTRACT.—If acquisition of an obsolete
vessel under this chapter occurs when the owner contracts for the construc-
tion or purchase of the new vessel, the Secretary of Transportation shall
apply the trade-in allowance to the purchase price of the new vessel rather
than paying it to the owner. If the new vessel is constructed under this sub-
title, the Secretary may apply the trade-in allowance to the required cash
payments on terms and conditions the Secretary may prescribe. If the new
vessel is not constructed under this subtitle, the Secretary shall pay the
trade-in allowance to the builder of the vessel for the account of the owner
when the Secretary acquires the obsolete vessel.
‘‘(b) ACQUISITION AT TIME OF DELIVERY.—If acquisition of the obsolete
vessel occurs when the new vessel is delivered to the owner, the Secretary
shall deposit the trade-in allowance in the owner’s capital construction fund.
213
‘‘§ 57307. Recognition of gain for tax purposes
‘‘The owner of an obsolete vessel does not recognize a gain under the
Federal income tax laws when the vessel is transferred to the Secretary of
Transportation in exchange for a trade-in allowance under this chapter. The
basis of the new vessel acquired with the allowance is the same as the basis
of the obsolete vessel—
‘‘(1) increased by the difference between the cost of the new vessel
and the trade-in allowance of the obsolete vessel; and
‘‘(2) decreased by the amount of loss recognized on the transfer.
‘‘§ 57308. Use of vessels at least 25 years old
‘‘An obsolete vessel acquired under this chapter that is or becomes at
least 25 years old may not be used for commercial operation. However, the
vessel may be used—
‘‘(1) during a period in which vessels may be requisitioned under
chapter 563 of this title; or
‘‘(2) except as otherwise provided in this subtitle, on trade routes
serving only the foreign trade of the United States.
‘‘CHAPTER 575—CONSTRUCTION, CHARTER, AND SALE
OF VESSELS
‘‘SUBCHAPTER I—GENERAL
‘‘Sec.
‘‘57501.
Completion of long-range program.
‘‘57502.
Construction, reconditioning, and remodeling of vessels.
‘‘57503.
Competitive bidding.
‘‘57504.
Charter or sale of vessels acquired by Department of Transportation.
‘‘57505.
Employment of vessels on foreign trade routes.
‘‘57506.
Minimum selling price of vessels.
‘‘SUBCHAPTER II—CHARTERS
‘‘57511.
Demise charters.
‘‘57512.
Competitive bidding.
‘‘57513.
Minimum bid.
‘‘57514.
Qualifications of bidders.
‘‘57515.
Awarding of charters.
‘‘57516.
Operating-differential subsidies.
‘‘57517.
Recovery of excess profits.
‘‘57518.
Performance bond.
‘‘57519.
Insurance.
‘‘57520.
Vessel maintenance.
‘‘57521.
Termination of charter during national emergency.
‘‘SUBCHAPTER III—MISCELLANEOUS
‘‘57531.
Construction and charter of vessels for unsuccessful routes.
‘‘57532.
Operation of experimental vessels.
‘‘SUBCHAPTER I—GENERAL
‘‘§ 57501. Completion of long-range program
‘‘Whenever the Secretary of Transportation determines that the objectives
and policies declared in sections 50101 and 50102 of this title cannot be
fully realized within a reasonable time under titles V and VI of the Mer-
chant Marine Act, 1936, and the President approves the determination, the
214
Secretary, in accordance with this chapter, shall complete the long-range
program described in section 50102 of this title.
‘‘§ 57502. Construction, reconditioning, and remodeling of
vessels
‘‘(a) IN GENERAL.—The Secretary of Transportation may have new ves-
sels constructed, and have old vessels reconditioned or remodeled, as the
Secretary determines necessary to carry out the objectives of this subtitle.
‘‘(b) PLACE OF WORK.—Construction, reconditioning, and remodeling of
vessels under subsection (a) shall take place in shipyards in the continental
United States (including Alaska and Hawaii). However, if satisfactory con-
tracts cannot be obtained from private shipbuilders, the Secretary may have
the work done in navy yards.
‘‘(c) APPLICABILITY OF CONSTRUCTION-DIFFERENTIAL SUBSIDY PROVI-
SIONS.—Contracts for the construction, reconstruction, or reconditioning of
a vessel by a private shipbuilder under this chapter are subject to the provi-
sions of title V of the Merchant Marine Act, 1936, applicable to a contract
with a private shipbuilder for the construction of a vessel under title V of
that Act.
‘‘§ 57503. Competitive bidding
‘‘(a) ADVERTISEMENT AND BIDDING.—The Secretary of Transportation
may make a contract with a private shipbuilder for the construction of a
new vessel, or for the reconstruction or reconditioning of an existing vessel,
only after due advertisement and upon sealed competitive bids.
‘‘(b) OPENING
OF BIDS.—Bids required under this section shall be
opened at the time and place stated in the advertisement for bids. All inter-
ested persons, including representatives of the press, shall be permitted to
attend. The results of the bidding shall be publicly announced.
‘‘§ 57504. Charter or sale of vessels acquired by Department
of Transportation
‘‘Vessels transferred to or otherwise acquired by the Department of
Transportation in any manner may be chartered or sold by the Secretary
of Transportation as provided in this chapter.
‘‘§ 57505. Employment of vessels on foreign trade routes
‘‘(a) IN GENERAL.—The Secretary of Transportation shall arrange for
the employment of the Department of Transportation’s vessels in steamship
lines on such trade routes, exclusively serving the foreign trade of the
United States, as the Secretary determines are essential for the development
and maintenance of the commerce of the United States and the national de-
fense. However, the Secretary shall first determine that those routes are not
being adequately served by existing steamship lines privately owned and op-
215
erated by citizens of the United States and documented under the laws of
the United States.
‘‘(b) POLICY TO ENCOURAGE PRIVATE OPERATION.—The Secretary shall
have a policy of encouraging private operation of each essential steamship
line now owned by the United States Government by—
‘‘(1) selling the line to a citizen of the United States; or
‘‘(2) demising the Secretary’s vessels on bareboat charter to citizens
of the United States who agree to maintain the line in the manner pro-
vided in this chapter.
‘‘§ 57506. Minimum selling price of vessels
‘‘(a) IN GENERAL.—A vessel constructed under this subtitle or the Mer-
chant Marine Act, 1936, may not be sold by the Secretary of Transpor-
tation for less than the price specified in this section.
‘‘(b) OPERATION IN FOREIGN TRADE.—If the vessel is to be operated in
foreign trade, the minimum price is the estimated foreign construction cost
(exclusive of national defense features) determined as of the date the con-
struction contract is executed, less depreciation under subsection (d).
‘‘(c) OPERATION IN DOMESTIC TRADE.—If the vessel is to be operated
in domestic trade, the minimum price is the cost of construction in the
United States (exclusive of national defense features), less depreciation
under subsection (d).
‘‘(d) DEPRECIATION.—Depreciation under subsections (b) and (c) shall be
based on—
‘‘(1) a 25-year life for dry-cargo and passenger vessels; and
‘‘(2) a 20-year life for tankers and other bulk liquid carrier vessels.
‘‘SUBCHAPTER II—CHARTERS
‘‘§ 57511. Demise charters
‘‘A charter by the Secretary of Transportation under this chapter shall
demise the vessel to the charterer subject to all usual conditions contained
in a bareboat charter. The charter shall be for a term the Secretary con-
siders to be in the best interest of the United States Government and the
merchant marine.
‘‘§ 57512. Competitive bidding
‘‘(a) IN GENERAL.—The Secretary of Transportation may charter a ves-
sel of the Department of Transportation to a private operator only on the
basis of competitive sealed bidding. The bids must be submitted in strict
compliance with the terms and conditions of a public advertisement solic-
iting the bids.
‘‘(b) ADVERTISEMENT
FOR BIDS.—An advertisement for bids shall
state—
216
‘‘(1) the number, type, and tonnage of the vessels being offered for
bareboat charter for operation as a steamship line on a designated
trade route;
‘‘(2) the minimum number of sailings required;
‘‘(3) the length of time of the charter;
‘‘(4) the right of the Secretary to reject all bids; and
‘‘(5) other information the Secretary considers necessary for the in-
formation of prospective bidders.
‘‘(c) OPENING
OF BIDS.—Bids required under this section shall be
opened at the time and place stated in the advertisement for bids. All inter-
ested persons, including representatives of the press, shall be permitted to
attend. The results of the bidding shall be publicly announced.
‘‘§ 57513. Minimum bid
‘‘The Secretary of Transportation shall reject any bid for the charter
under this subchapter of a vessel constructed under this subtitle or the Mer-
chant Marine Act, 1936, if the charter hire offered is lower than the min-
imum charter hire would be if the vessel were chartered under section
57531 of this title.
‘‘§ 57514. Qualifications of bidders
‘‘(a) CONSIDERATIONS.—In deciding whether to award a charter to a bid-
der, the Secretary of Transportation shall consider—
‘‘(1) the bidder’s financial resources, credit standing, and practical
experience in operating vessels; and
‘‘(2) other factors a prudent business person would consider in enter-
ing into a transaction involving a large capital investment.
‘‘(b) DISQUALIFICATIONS.—The Secretary may not charter a vessel to a
person appearing to lack sufficient capital, credit, and experience to operate
the vessel successfully over the period covered by the charter.
‘‘§ 57515. Awarding of charters
‘‘(a) IN GENERAL.—The Secretary of Transportation shall award the
charter to the bidder proposing to pay the highest monthly charter hire.
However, the Secretary may reject the highest or most advantageous or any
other bid if the Secretary considers the charter hire offered too low or deter-
mines that the bidder lacks the qualifications required by section 57514 of
this title.
‘‘(b) HIGHEST BID REJECTED.—If the Secretary rejects the highest bid,
the Secretary may—
‘‘(1) award the charter to the next highest bidder; or
‘‘(2) reject all bids and either readvertise the line or operate the line
until conditions appear more favorable to reoffer the line for private
charter.
217
‘‘(c) REASON FOR REJECTION.—On request of a bidder, the reason for
rejection shall be stated in writing to the bidder.
‘‘§ 57516. Operating-differential subsidies
‘‘If the Secretary of Transportation considers it necessary, the Secretary
may make a contract with a charterer of a vessel owned by the Secretary
for payment of an operating-differential subsidy, on the same terms and
conditions, and subject to the same limitations and restrictions, as otherwise
provided with respect to payment of operating-differential subsidies to oper-
ators of privately-owned vessels.
‘‘§ 57517. Recovery of excess profits
‘‘(a) IN GENERAL.—A charter under this chapter shall provide that if,
at the end of a calendar year subsequent to the execution of the charter,
the cumulative net voyage profit (after payment of the charter hire reserved
in the charter and payment of the charterer’s fair and reasonable overhead
expenses applicable to operation of the chartered vessel) exceeds 10 percent
a year of the charterer’s capital necessarily employed in the business of the
chartered vessel, the charterer shall pay to the Secretary of Transportation,
as additional charter hire, half the cumulative net voyage profit in excess
of 10 percent a year. However, any cumulative net voyage profit accounted
for under this subsection is not to be included in the calculation of cumu-
lative net voyage profit in any subsequent year.
‘‘(b) TERMS TO BE DEFINED AND USED.—The Secretary shall define the
terms ‘net voyage profit’, ‘fair and reasonable overhead expenses’, and ‘cap-
ital necessarily employed’ for this section. Each advertisement for bids and
each charter shall contain these definitions, stating the formula for deter-
mining each of these three amounts.
‘‘§ 57518. Performance bond
‘‘The Secretary of Transportation shall require a charterer of a vessel of
the Secretary to deposit with the Secretary an undertaking, with approved
sureties, in such amount as the Secretary may require as security for the
faithful performance of the terms of the charter, including indemnity
against liens on the chartered vessel.
‘‘§ 57519. Insurance
‘‘A charter under this chapter shall require the charterer to carry, at the
charterer’s expense, insurance on the chartered vessel covering all marine
and port risks, protection and indemnity risks, and all other hazards and
liabilities, adequate to cover damages claimed against and losses sustained
by the chartered vessel arising during the term of the charter. The insur-
ance shall be in such form, in such amount, and with such companies as
the Secretary of Transportation may require. In accordance with law, any
of the insurance risks may be underwritten by the Secretary.
218
‘‘§ 57520. Vessel maintenance
‘‘(a) IN GENERAL.—A charter under this chapter shall require the
charterer, at the charterer’s expense, to—
‘‘(1) keep the chartered vessel in good repair and efficient operating
condition; and
‘‘(2) make any repairs required by the Secretary of Transportation.
‘‘(b) INSPECTION.—The charter shall provide that the Secretary has the
right to inspect the vessel at any time to ascertain its condition.
‘‘§ 57521. Termination of charter during national emergency
‘‘A charter under this chapter shall provide that during a national emer-
gency proclaimed by the President or a period for which the President has
proclaimed that the security of the national defense makes it advisable, the
Secretary of Transportation may terminate the charter without cost to the
United States Government on such notice to the charterer as the President
determines.
‘‘SUBCHAPTER III—MISCELLANEOUS
‘‘§ 57531. Construction and charter of vessels for unsuccess-
ful routes
‘‘(a) IN GENERAL.—If the Secretary of Transportation finds that a trade
route determined to be essential under section 50103 of this title cannot be
successfully developed and maintained and the Secretary’s replacement pro-
gram cannot be achieved under private operation of the trade route by a
citizen of the United States with vessels documented under the laws of the
United States, without further aid by the United States Government in ad-
dition to the financial aid authorized under titles V and VI of the Merchant
Marine Act, 1936, the Secretary, without advertisement or competition,
may—
‘‘(1) have constructed, in private shipyards or in navy yards, vessels
of the types necessary for the trade route; and
‘‘(2) demise those new vessels or bareboat charter them to the Amer-
ican-flag operator established on the trade route.
‘‘(b) AMOUNT OF CHARTER HIRE.—
‘‘(1) IN GENERAL.—The annual charter hire under subsection (a)
shall be at least 4 percent of the price (referred to in this section as
the ‘foreign cost’) at which the vessel would be sold if constructed
under title V of the Merchant Marine Act, 1936, plus—
‘‘(A) a percentage of the depreciated foreign cost computed an-
nually determined by the Secretary of the Treasury, taking into
consideration the current average market yield on outstanding
marketable obligations of the Government with remaining periods
219
to maturity comparable to the term of the charter, adjusted to the
nearest one-eighth percent; and
‘‘(B) an allowance adequate in the judgment of the Secretary
of Transportation to cover administrative costs.
‘‘(2) DEPRECIATION.—Depreciation under paragraph (1)(A) shall be
based on—
‘‘(A) a 25-year life for dry-cargo and passenger vessels; and
‘‘(B) a 20-year life for tankers and other bulk liquid carrier ves-
sels.
‘‘(c) OPTION TO PURCHASE.—The charter may contain an option to the
charterer to purchase the vessels from the Secretary of Transportation with-
in 5 years after delivery under the charter, on the same terms and condi-
tions as provided in title V of the Merchant Marine Act, 1936, for the pur-
chase of new vessels from the Secretary. However—
‘‘(1) the purchase price shall be the foreign cost less depreciation to
the date of purchase based on the useful life specified in subsection
(b)(2);
‘‘(2) the required cash payment payable at the time of the purchase
shall be 25 percent of the purchase price;
‘‘(3) the charter may provide that any part of the charter hire paid
in excess of the minimum charter hire provided for in this section may
be credited against the cash payment payable at the time of the pur-
chase;
‘‘(4) the balance of the purchase price shall be paid within the re-
maining years of useful life (as specified in subsection (b)(2)) after the
date of delivery of the vessel under the charter and in approximately
equal annual installments, except that the first installment, which shall
be payable on the next ensuing anniversary date of the delivery under
the charter, shall be a proportionate part of the annual installment;
and
‘‘(5) interest shall be payable on the unpaid balances from the date
of purchase, at a rate not less than—
‘‘(A) a rate determined by the Secretary of the Treasury, taking
into consideration the current average market yield on outstanding
marketable obligations of the Government with remaining periods
to maturity comparable to the average maturities of the loans, ad-
justed to the nearest one-eighth percent; plus
‘‘(B) an allowance adequate in the judgment of the Secretary
of Transportation to cover administrative costs.
‘‘(d) OPERATION OF VESSEL.—
220
‘‘(1) PERMISSIBLE VOYAGES.—The charter shall provide for oper-
ation of the vessel exclusively—
‘‘(A) in foreign trade;
‘‘(B) on a round-the-world voyage;
‘‘(C) on a round voyage from the west coast of the United
States to a European port that includes an intercoastal port of the
United States;
‘‘(D) on a round voyage from the Atlantic coast of the United
States to the Orient that includes an intercoastal port of the
United States; or
‘‘(E) on a voyage in foreign trade on which the vessel may stop
at Hawaii or an island territory or possession of the United
States.
‘‘(2) DOMESTIC TRADE.—The charter shall provide if the vessel is
operated in domestic trade on any of the services specified in para-
graph (1), the charterer will pay annually to the Secretary of Transpor-
tation that proportion of 1⁄25 of the difference between the domestic
and foreign cost of the vessel as the gross revenue derived from the
domestic trade bears to the gross revenue derived from the entire voy-
ages completed during the preceding year.
‘‘§ 57532. Operation of experimental vessels
‘‘(a) DEFINITION.—In this section, the term ‘experimental vessel’ means
a vessel owned by the United States Government (including a vessel in the
National Defense Reserve Fleet) that has been constructed, reconditioned,
or remodeled for experimental or testing purposes.
‘‘(b) AUTHORITY TO OPERATE.—The Secretary of Transportation, for
the purpose of practical development, trial, and testing, may operate an ex-
perimental vessel under a bareboat charter or general agency agreement in
the foreign or domestic trade of the United States or for use for the account
of a department or agency of the Government, without regard to other pro-
visions of this subtitle and other laws related to chartering and general
agency operations. Not more than 10 vessels may be operated and tested
under this section in any one year.
‘‘(c) TERMS OF OPERATION.—Operation of a vessel under this section
shall be on terms the Secretary considers appropriate to carry out the pur-
poses of this subtitle. A bareboat charter under this section shall be at rea-
sonable rates and include restrictions the Secretary considers appropriate to
protect the public interest, including provisions for recapture of profits
under section 57517 of this title. A charter or general agency agreement
under this section shall be reviewed annually to determine whether condi-
tions exist to justify continuance of the charter or agreement.
221
‘‘(d) RIGHTS OF SEAMEN.—A seaman engaged in vessel operations of the
Secretary under this section and employed through a general agent in con-
nection with a charter or agreement under this section is entitled to all the
rights and remedies provided in sections 1(a) and (c), 3(c), and 4 of the
Act of March 24, 1943 (50 App. U.S.C. 1291(a), (c), 1293(c), 1294).
‘‘PART G—RESTRICTIONS AND PENALTIES
‘‘CHAPTER 581—RESTRICTIONS AND PENALTIES
‘‘Sec.
‘‘58101.
Operating in domestic intercoastal or coastwise service.
‘‘58102.
Default on payment or maintenance of reserves.
‘‘58103.
Employing another person as managing or operating agent.
‘‘58104.
Willful violation constitutes breach of contract or charter.
‘‘58105.
Preferences for cargo in which charterer has interest.
‘‘58106.
Concerted discriminatory activities.
‘‘58107.
Discrimination at ports by water common carriers.
‘‘58108.
Charges for transportation subject to subtitle IV of title 49.
‘‘58109.
Penalties.
‘‘§ 58101. Operating in domestic intercoastal or coastwise
service
‘‘(a) PROHIBITION.—A subsidy may not be awarded or paid to a con-
tractor under the operating-differential subsidy program, and a vessel may
not be chartered to a person under chapter 575 of this title, if the con-
tractor or charterer, or a holding company, subsidiary, affiliate, or associate
of the contractor or charterer, or an officer, director, agent, or executive
thereof, directly or indirectly—
‘‘(1) owns, charters, or operates a vessel engaged in the domestic
intercoastal or coastwise service; or
‘‘(2) owns a pecuniary interest in a person that owns, charters, or
operates a vessel in the domestic intercoastal or coastwise service.
‘‘(b) WAIVER.—A person may apply to the Secretary of Transportation
for a waiver of subsection (a). Before deciding on the waiver, the Secretary
shall give the applicant and other interested persons an opportunity for a
hearing. The Secretary may not grant the waiver if the Secretary finds it
would—
‘‘(1) result in unfair competition to a person operating exclusively in
the domestic intercoastal or coastwise service; or
‘‘(2) be prejudicial to the objectives and policy of this subtitle.
‘‘(c) CONTINUOUS OPERATION SINCE 1935.—The Secretary shall grant
an application under subsection (b) without requiring further proof that the
public interest and convenience will be served and without further pro-
ceedings as to the competition in the route or trade, if the contractor or
other person, or a predecessor in interest, was in bona-fide operation as a
common carrier by water in the domestic intercoastal or coastwise trade in
1935 over the route or in the trade for which the application is made and
has so operated since that time or, if engaged in furnishing seasonal service
222
only, was in bona-fide operation in 1935 during the season ordinarily cov-
ered by its operation, except in either event as to interruptions of service
over which the applicant or its predecessor in interest had no control.
‘‘(d) DIVERSION INTO INTERCOASTAL OR COASTWISE OPERATIONS.—If
an application under subsection (b) is approved, a person referred to in this
section may not divert, directly or indirectly, money, property, or any other
thing of value, used in a foreign-trade operation for which a subsidy is paid
by the United States Government, into intercoastal or coastwise operations.
‘‘§ 58102. Default on payment or maintenance of reserves
‘‘The Secretary of Transportation may supervise the number and com-
pensation of all officers and employees of a contractor under the operating-
differential subsidy program or a charterer under chapter 575 of this title,
receiving an operating-differential subsidy, if the contractor or charterer—
‘‘(1) is in default on a mortgage, note, purchase contract, or other
obligation to the Secretary; or
‘‘(2) has not maintained, in a manner satisfactory to the Secretary,
all of the reserves provided for in this subtitle.
‘‘§ 58103. Employing another person as managing or oper-
ating agent
‘‘(a) PROHIBITION.—Except with the written consent of the Secretary of
Transportation, a contractor holding a contract under the operating-dif-
ferential subsidy program or under chapter 575 of this title may not—
‘‘(1) employ another person as the managing or operating agent of
the operator; or
‘‘(2) charter a vessel, on which an operating-differential subsidy is
to be paid, for operation by another person.
‘‘(b) APPLICABILITY OF PROVISIONS TO CHARTERER.—If a charter pro-
hibited by this section is made, the person operating the chartered vessel
is subject to all the provisions of this subtitle and the operating-differential
subsidy program, including limitations of profits and salaries.
‘‘§ 58104. Willful violation constitutes breach of contract or
charter
‘‘A willful violation of any provision of sections 58101–58103 of this title
constitutes a breach of the contract or charter. On determining that a viola-
tion has occurred, the Secretary of Transportation may declare the contract
or charter rescinded.
‘‘§ 58105. Preferences for cargo in which charterer has inter-
est
‘‘A contractor receiving an operating-differential subsidy, or a charterer
under chapter 575 of this title, may not unjustly discriminate in any man-
ner so as to give preference, directly or indirectly, to cargo in which the con-
223
tractor or charterer has a direct or indirect ownership, purchase, or vending
interest.
‘‘§ 58106. Concerted discriminatory activities
‘‘(a) PROHIBITION.—A contractor receiving an operating-differential sub-
sidy, or a charterer under chapter 575 of this title, may not continue as
a party to or conform to an agreement with another carrier by water, or
engage in a practice in concert with another carrier by water, that is un-
justly discriminatory or unfair to any other citizen of the United States op-
erating a common carrier by water employing only vessels documented
under the laws of the United States on an established trade route from and
to a United States port.
‘‘(b) GOVERNMENT PAYMENT PROHIBITED.—No payment or subsidy of
any kind may be paid, directly or indirectly, out of funds of the United
States Government to a contractor or charterer that has violated subsection
(a).
‘‘(c) CIVIL ACTION.—A person whose business or property is injured by
a violation of subsection (a) may bring a civil action in the district court
of the United States for the district in which the defendant resides, is
found, or has an agent. If the person prevails, the person shall be
awarded—
‘‘(1) 3 times the damages; and
‘‘(2) costs, including reasonable attorney fees.
‘‘§ 58107. Discrimination at ports by water common carriers
‘‘(a) PROHIBITION.—A common carrier by water may not, directly or in-
directly, through an agreement, conference, association, understanding, or
otherwise, prevent or attempt to prevent any other common carrier by water
from serving any port described in subsection (b) at the same rates the first
carrier charges at the nearest port already regularly served by it.
‘‘(b) PORTS.—A port referred to in subsection (a) is one that is—
‘‘(1) designed for the accommodation of ocean-going vessels;
‘‘(2) located on an improvement project authorized by law or by a
Federal agency; and
‘‘(3) located within the continental limits of the United States.
‘‘(c) OTHER AUTHORITY NOT LIMITED.—This section does not limit the
authority otherwise vested in the Secretary of Transportation and the Fed-
eral Maritime Commission.
‘‘§ 58108. Charges for transportation subject to subtitle IV of
title 49
‘‘(a) PROHIBITION.—A carrier may not charge, collect, or receive for
transportation subject to subtitle IV of title 49 of persons or property,
under any joint rate, fare, or charge, or under any export, import, or other
224
proportional rate, fare, or charge, that is based in whole or in part on the
fact that the persons or property affected are to be transported to, or have
been transported from, a port in a territory or possession of the United
States or in a foreign country, by a carrier by water in foreign commerce,
any lower rate, fare, or charge than the carrier charges, collects, or receives
for the transportation of persons or similar property for the same distance,
in the same direction, and over the same route, in commerce wholly within
the United States, unless the vessel used for the transportation is or was
at the time of the transportation documented under the laws of the United
States.
‘‘(b) SUSPENSION OF PROHIBITION.—Whenever the Secretary of Trans-
portation believes that adequate shipping facilities to or from any port in
a territory or possession of the United States or a foreign country are not
being provided by vessels documented under the laws of the United States,
the Secretary shall certify this fact to the Surface Transportation Board.
On receiving the certification, the Board may by order suspend the oper-
ation of subsection (a) with respect to the rates, fares, and charges for the
transportation by rail of persons and property transported from or to be
transported to those ports, for such time and under such terms and condi-
tions as the Secretary may specify in the order or in any supplemental
order.
‘‘(c) TERMINATION OF SUSPENSION.—Whenever the Secretary believes
that adequate shipping facilities are being provided to those ports by vessels
documented under the laws of the United States, and certifies that fact to
the Board, the Board may order the termination of the suspension.
‘‘§ 58109. Penalties
‘‘(a) INDIVIDUALS.—An individual convicted of violating section
58101(d), 58103, or 58105 of this title shall be fined under title 18, impris-
oned for at least one year but not more than 5 years, or both.
‘‘(b) ORGANIZATIONS.—An organization convicted of committing an act
prohibited by this subtitle shall be fined under title 18.
‘‘(c) INELIGIBILITY TO RECEIVE BENEFITS.—An individual or organiza-
tion convicted of violating a section referred to in subsection (a) is ineligible,
at the discretion of the Secretary of Transportation, to receive any benefit
under the construction-differential subsidy or operating-differential subsidy
programs, or a charter under chapter 575 of this title, for 5 years after
the conviction.’’.
SEC. 8. SUBTITLE VI OF TITLE 46.
(a) REDESIGNATION.—Title 46, United States Code, is amended by re-
designating subtitle VI as subtitle VII.
225
(b) NEW SUBTITLE.—Title 46, United States Code, is amended by insert-
ing after subtitle V the following:
‘‘Subtitle VI—Clearance, Tonnage Taxes, and
Duties
‘‘Chapter
Sec.
‘‘601.
Arrival and Departure Requirements ...............................................
60101
‘‘603.
Tonnage Taxes and Light Money ........................................................
60301
‘‘605.
Discriminating Duties and Reciprocal Privileges ........................
60501
‘‘CHAPTER 601—ARRIVAL AND DEPARTURE
REQUIREMENTS
‘‘Sec.
‘‘60101.
Boarding arriving vessels before inspection.
‘‘60102.
Production of certificate on entry.
‘‘60103.
Oath of ownership on entry.
‘‘60104.
Depositing certificates of documentation with consular officers.
‘‘60105.
Clearance of vessels.
‘‘60106.
State inspection laws.
‘‘60107.
Payment of fees on departing vessel.
‘‘60108.
Duty to transport tendered cargo.
‘‘60109.
Duty to transport money and securities of the United States Government.
‘‘§ 60101. Boarding arriving vessels before inspection
‘‘(a) REGULATIONS.—The Secretary of Homeland Security shall prescribe
and enforce regulations on the boarding of a vessel arriving at a port of
the United States before the vessel has been inspected and secured.
‘‘(b) CRIMINAL PENALTY.—A person violating a regulation prescribed
under this section shall be fined under title 18, imprisoned for not more
than 6 months, or both.
‘‘(c) RELATIONSHIP TO OTHER LAW.—This section shall be construed as
supplementary to section 2279 of title 18.
‘‘§ 60102. Production of certificate on entry
‘‘On entry of a vessel documented under chapter 121 of this title, the
master or other individual in charge of the vessel shall produce the certifi-
cate of documentation to the customs officer at the place where the vessel
is entered. If the certificate is not produced, the vessel is not entitled to
the privileges of a documented vessel.
‘‘§ 60103. Oath of ownership on entry
‘‘(a) REQUIRED STATEMENT.—On entry of a vessel of the United States
from a foreign port, the individual designated under subsection (b) shall
state under oath that—
‘‘(1) the vessel’s certificate of documentation contains the names of
all the owners of the vessel; or
‘‘(2) part of the ownership has been transferred since the certificate
was issued and, to the best of the individual’s knowledge and belief,
the vessel is still owned only by citizens of the United States.
‘‘(b) PERSON TO MAKE STATEMENT.—The statement under subsection
(a) shall be made by—
226
‘‘(1) an owner if one resides at the port of entry; or
‘‘(2) the master if an owner does not reside at the port of entry.
‘‘(c) CONSEQUENCE OF NOT MAKING STATEMENT.—If the appropriate
individual does not make the statement required by this section, the vessel
is not entitled to the privileges of a vessel of the United States.
‘‘§ 60104. Depositing certificates of documentation with con-
sular officers
‘‘(a) REQUIREMENT OF MASTER.—When a vessel owned by citizens of the
United States, on a voyage from a port in the United States, arrives at a
foreign port, the master of the vessel shall deposit the vessel’s certificate
of documentation with a consular officer at the foreign port if there is a
consular officer at that port.
‘‘(b) RETURN OF CERTIFICATE.—When the master produces a clearance
from the appropriate officer of the foreign port, the consular officer shall
return the certificate of documentation to the master if the master has com-
plied with the provisions of law related to the discharge of seamen in a for-
eign country and the payment of fees of consular officers.
‘‘(c) CIVIL PENALTY AND COLLECTION.—The master of a vessel failing
to deposit the certificate of documentation as required by subsection (a) is
liable to the United States Government for a civil penalty of $500. The con-
sular officer shall bring an action to recover the penalty in any court of
competent jurisdiction. The action shall be brought in the name of the con-
sular officer for the benefit of the Government.
‘‘§ 60105. Clearance of vessels
‘‘(a) VESSELS OF THE UNITED STATES.—Except as otherwise provided
by law, a vessel of the United States shall obtain clearance from the Sec-
retary of Homeland Security before proceeding from a port or place in the
United States—
‘‘(1) for a foreign port or place;
‘‘(2) for another port or place in the United States if the vessel has
on board foreign merchandise for which entry has not been made; or
‘‘(3) outside the territorial sea to visit a hovering vessel or to receive
merchandise while outside the territorial sea.
‘‘(b) OTHER VESSELS.—Except as otherwise provided by law, a vessel
that is not a vessel of the United States shall obtain clearance from the Sec-
retary before proceeding from a port or place in the United States—
‘‘(1) for a foreign port or place;
‘‘(2) for another port or place in the United States; or
‘‘(3) outside the territorial sea to visit a hovering vessel or to receive
or deliver merchandise while outside the territorial sea.
‘‘(c) REGULATIONS.—The Secretary may by regulation—
227
‘‘(1) prescribe the manner in which clearance under this section is
to be obtained, including the documents, data, or information which
shall be submitted or transmitted, pursuant to an authorized data
interchange system, to obtain the clearance;
‘‘(2) permit clearance to be obtained before all requirements for
clearance are complied with, but only if the owner or operator of the
vessel files a bond in an amount set by the Secretary conditioned on
the compliance by the owner or operator with all specified requirements
for clearance within a time period (not exceeding 4 business days) es-
tablished by the Secretary; and
‘‘(3) permit clearance to be obtained at a place other than a des-
ignated port of entry, under conditions the Secretary may prescribe.
‘‘§ 60106. State inspection laws
‘‘When State law requires a certificate of inspection for goods carried on
a vessel, a vessel transporting the goods may not be cleared until the certifi-
cate is produced.
‘‘§ 60107. Payment of fees on departing vessel
‘‘A departing vessel may be cleared only when all legal fees that have ac-
crued on the vessel are paid and proof of payment is presented to the indi-
vidual granting the clearance.
‘‘§ 60108. Duty to transport tendered cargo
‘‘Clearance may be refused to a vessel or vehicle transporting cargo des-
tined for a domestic or foreign port when the owner, master, or other indi-
vidual in charge refuses to accept cargo tendered in good condition, with
proper charges, for the same or an intermediate port by a citizen of the
United States. This section does not apply if the vessel or vehicle is already
fully loaded (giving appropriate consideration to its proper loading) or is not
adaptable to transport the tendered cargo.
‘‘§ 60109. Duty to transport money and securities of the
United States Government
‘‘Before being given clearance, a vessel owned by a citizen of the United
States and bound on a voyage from a port in the United States to another
port in the United States or in a foreign country, or on a voyage from a
port in a foreign country to a port in the United States, shall receive on
board any bullion, coin, notes, bonds, or other securities of the United
States Government that an agency, consular officer, or other agent of the
Government offers. The vessel shall transport the items securely and deliver
them promptly to the proper authorities or consignees on arriving at the
port of destination. Compensation shall be paid for services provided under
this section that is equal to compensation paid to other carriers in the ordi-
nary transaction of business.
228
‘‘CHAPTER 603—TONNAGE TAXES AND LIGHT MONEY
‘‘Sec.
‘‘60301.
Regular tonnage taxes.
‘‘60302.
Special tonnage taxes.
‘‘60303.
Light money.
‘‘60304.
Presidential suspension of tonnage taxes and light money.
‘‘60305.
Vessels in distress.
‘‘60306.
Vessels not engaged in trade.
‘‘60307.
Vessels engaged in coastwise trade or the fisheries.
‘‘60308.
Vessels engaged in Great Lakes trade.
‘‘60309.
Passenger vessels making trips between ports of the United States and foreign ports.
‘‘60310.
Vessels making daily trips on interior waters.
‘‘60311.
Hospital vessels in time of war.
‘‘60312.
Rights under treaties preserved.
‘‘§ 60301. Regular tonnage taxes
‘‘(a) LOWER RATE.—A tax is imposed at the rate of 2 cents per ton (but
not more than a total of 10 cents per ton per year) at each entry in a port
of the United States of—
‘‘(1) a vessel entering from a foreign port or place in North America,
Central America, the West Indies Islands, the Bahama Islands, the
Bermuda Islands, or the coast of South America bordering the Carib-
bean Sea; or
‘‘(2) a vessel returning to the same port or place in the United
States from which it departed, and not entering the United States from
another port or place, except—
‘‘(A) a vessel of the United States;
‘‘(B) a recreational vessel (as defined in section 2101 of this
title); or
‘‘(C) a barge.
‘‘(b) HIGHER RATE.—A tax is imposed at the rate of 6 cents per ton
(but not more than a total of 30 cents per ton per year) on a vessel at each
entry in a port of the United States from a foreign port or place not named
in subsection (a)(1).
‘‘(c) EXCEPTION FOR VESSELS ENTERING OTHER THAN BY SEA.—Sub-
section (a) does not apply to a vessel entering other than by sea from a
foreign port or place at which tonnage, lighthouse, or other equivalent taxes
are not imposed on vessels of the United States.
‘‘§ 60302. Special tonnage taxes
‘‘(a) ENTRY FROM FOREIGN PORT OR PLACE.—Regardless of whether a
tax is imposed under section 60301 of this title, a tax is imposed on a vessel
at each entry in a port of the United States from a foreign port or place
at the following rates:
‘‘(1) 30 cents per ton on a vessel built in the United States but
owned in any part by a subject of a foreign country.
‘‘(2) 50 cents per ton on other vessels not of the United States.
229
‘‘(3) 50 cents per ton on a vessel of the United States having an
officer who is not a citizen of the United States.
‘‘(4) $2 per ton on a foreign vessel entering from a foreign port or
place at which vessels of the United States are not ordinarily allowed
to enter and trade.
‘‘(b) VESSELS NOT OF THE UNITED STATES TRANSPORTING PROPERTY
BETWEEN DISTRICTS.—Regardless of whether a tax is imposed under sec-
tion 60301 of this title, a tax of 50 cents per ton is imposed on a vessel
not of the United States at each entry in one customs district from another
district when transporting goods loaded in one district to be delivered in an-
other district.
‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—The tax of 50
cents per ton under this section does not apply to a vessel that—
‘‘(1) is owned only by citizens of the United States; and
‘‘(2) after entering a port of the United States, becomes documented
as a vessel of the United States before leaving that port.
‘‘§ 60303. Light money
‘‘(a) IMPOSITION OF TAX.—A tax of 50 cents per ton, to be called ‘light
money’, is imposed on a vessel not of the United States at each entry in
a port of the United States. This tax shall be imposed and collected under
the same regulations that apply to tonnage taxes.
‘‘(b) EXCEPTION FOR VESSELS OWNED BY CITIZENS.—
‘‘(1) IN GENERAL.—Subsection (a) does not apply to a vessel owned
only by citizens of the United States if—
‘‘(A) the vessel is carrying a regular document issued by a cus-
tomhouse of the United States proving the vessel to be owned only
by citizens of the United States; and
‘‘(B) on entry of the vessel from a foreign port, the individual
designated under paragraph (2) states under oath that—
‘‘(i) the document contains the names of all the owners of
the vessel; or
‘‘(ii) part of the ownership has been transferred since the
document was issued and, to the best of that individual’s
knowledge and belief, the vessel is still owned only by citizens
of the United States.
‘‘(2) PERSON TO MAKE STATEMENT.—The statement under para-
graph (1)(B) shall be made by—
‘‘(A) an owner if one resides at the port of entry; or
‘‘(B) the master if an owner does not reside at the port of
entry.
230
‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—Subsection
(a) section does not apply to a vessel that—
‘‘(1) is owned only by citizens of the United States; and
‘‘(2) after entering a port of the United States, becomes documented
as a vessel of the United States before leaving that port.
‘‘§ 60304. Presidential suspension of tonnage taxes and light
money
‘‘If the President is satisfied that the government of a foreign country
does not impose discriminating or countervailing duties to the disadvantage
of the United States, the President shall suspend the imposition of special
tonnage taxes and light money under sections 60302 and 60303 of this title
on vessels of that country.
‘‘§ 60305. Vessels in distress
‘‘A vessel is exempt from tonnage taxes and light money when it enters
because it is in distress.
‘‘§ 60306. Vessels not engaged in trade
‘‘A vessel is exempt from tonnage taxes and light money when not en-
gaged in trade.
‘‘§ 60307. Vessels engaged in coastwise trade or the fisheries
‘‘A vessel with a registry endorsement or a coastwise endorsement, trad-
ing from one port in the United States to another port in the United States
or employed in the bank, whale, or other fisheries, is exempt from tonnage
taxes and light money.
‘‘§ 60308. Vessels engaged in Great Lakes trade
‘‘A documented vessel with a registry endorsement, engaged in foreign
trade on the Great Lakes or their tributary or connecting waters in trade
with Canada, does not become subject to tonnage taxes or light money be-
cause of that trade.
‘‘§ 60309. Passenger vessels making trips between ports of
the United States and foreign ports
‘‘A passenger vessel making at least 3 trips per week between a port of
the United States and a foreign port is exempt from tonnage taxes and light
money.
‘‘§ 60310. Vessels making daily trips on interior waters
‘‘A vessel making regular daily trips between a port of the United States
and a port of Canada only on interior waters not navigable to the ocean
is exempt from tonnage taxes and light money, except on its first clearing
each year.
‘‘§ 60311. Hospital vessels in time of war
‘‘In time of war, a hospital vessel is exempt from tonnage taxes, light
money, and pilotage charges in the ports of the United States if the vessel
231
is one for which the conditions of the international convention for the ex-
emption of hospital ships from taxation in time of war, concluded at The
Hague on December 21, 1904, are satisfied. The President by proclamation
shall name the vessels for which the conditions are satisfied and state when
the exemption begins and ends.
‘‘§ 60312. Rights under treaties preserved
‘‘This chapter and chapter 605 of this title do not affect a right or privi-
lege of a foreign country relating to tonnage taxes or other duties on vessels
under a law or treaty of the United States.
‘‘CHAPTER 605—DISCRIMINATING DUTIES AND
RECIPROCAL PRIVILEGES
‘‘Sec.
‘‘60501.
Vessels allowed to import.
‘‘60502.
Discriminating duty on goods imported in foreign vessels or from contiguous coun-
tries.
‘‘60503.
Reciprocal suspension of discriminating duties.
‘‘60504.
Reciprocal privileges for recreational vessels.
‘‘60505.
Retaliatory suspension of commercial privileges.
‘‘60506.
Retaliation against British dominions of North America.
‘‘60507.
Suspension of free passage through Saint Marys Falls Canal.
‘‘§ 60501. Vessels allowed to import
‘‘(a) IN GENERAL.—Except as otherwise provided by treaty, goods may
be imported into the United States from a foreign port or place only in—
‘‘(1) a vessel of the United States; or
‘‘(2) a foreign vessel owned only by citizens or subjects of the
country—
‘‘(A) in which the goods are grown, produced, or manufactured;
or
‘‘(B) from which the goods can only be, or most usually are,
first shipped for transportation.
‘‘(b) EXCEPTION FOR VESSELS OF COUNTRIES NOT MAINTAINING SIMI-
LAR RESTRICTIONS.—Subsection (a) does not apply to a vessel of a foreign
country that does not maintain a similar restriction against United States
documented vessels.
‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—Subsection
(a) does not apply to a vessel that—
‘‘(1) is owned only by citizens of the United States; and
‘‘(2) after entering a port of the United States, becomes documented
as a vessel of the United States before leaving that port.
‘‘(d) SEIZURE AND FORFEITURE.—If goods are imported in violation of
this section, the goods and the vessel in which they are imported, along with
its equipment and other cargo, may be seized by and forfeited to the United
States Government.
232
‘‘§ 60502. Discriminating duty on goods imported in foreign
vessels or from contiguous countries
‘‘(a) IMPOSITION OF DUTY.—A discriminating duty of 10 percent ad valo-
rem (in addition to other duties imposed by law) is imposed on goods—
‘‘(1) imported in a vessel not of the United States unless the
vessel—
‘‘(A) is entitled by law or treaty to enter the ports of the United
States on payment of the same duties as are payable on goods im-
ported in a vessel of the United States; or
‘‘(B)(i) is owned only by citizens of the United States; and
‘‘(ii) after entering a port of the United States, becomes docu-
mented as a vessel of the United States before leaving that port;
or
‘‘(2) produced or manufactured in a foreign country not contiguous
to the United States and imported from a country contiguous to the
United States, unless imported in the usual course of strictly retail
trade.
‘‘(b) SEIZURE AND FORFEITURE.—If goods are imported without pay-
ment of the duty required by this section, the goods and the vessel in which
they are imported may be seized by, and forfeited to, the United States Gov-
ernment.
‘‘§ 60503. Reciprocal suspension of discriminating duties
‘‘(a) GENERAL AUTHORITY.—On receiving satisfactory proof from the
government of a foreign country that it has suspended, in any part, the im-
position of discriminating duties for any class of vessels owned by citizens
of the United States or goods imported in those vessels, the President may
proclaim a reciprocal suspension of discriminating duties for the same class
of vessels owned by citizens of that country or goods imported in those ves-
sels.
‘‘(b) EFFECTIVE AND EXPIRATION DATES.—A suspension under this sec-
tion takes effect retroactively from the date the President received the proof
from the foreign government, and expires when that government stops
granting the reciprocal suspension.
‘‘§ 60504. Reciprocal privileges for recreational vessels
‘‘When the President is satisfied that yachts owned by residents of the
United States and used only for pleasure are allowed to arrive at, depart
from, and cruise in the waters of a foreign port without entering, clearing,
or paying any duties or fees (including cruising license fees), the Secretary
of Homeland Security may allow yachts from that foreign port used only
for pleasure to arrive at and depart from the ports of the United States
and to cruise in the waters of the United States without paying any duties
233
or fees. However, the Secretary may require foreign yachts to obtain a li-
cense to cruise in the waters of the United States. The license shall be in
the form prescribed by the Secretary and contain limitations about length
of time, direction, place of cruising and action, and other matters the Sec-
retary considers appropriate. The license shall be issued without cost to the
yacht.
‘‘§ 60505. Retaliatory suspension of commercial privileges
‘‘(a) GENERAL AUTHORITY.—The President may proclaim a suspension
of commercial privileges to vessels of a foreign country when—
‘‘(1) vessels of that country have been given the same commercial
privileges in the ports and waters of the United States given to vessels
of the United States (except the privilege of engaging in coastwise com-
merce); and
‘‘(2) vessels of the United States are denied commercial privileges in
the ports or waters of that country given to vessels of that country.
‘‘(b) APPLICATION.—A suspension under this section shall apply to the
same commercial privileges denied to vessels of the United States in the
ports or waters of the foreign country, and to the same class of vessels of
that country as the class of vessels of the United States denied the privi-
leges.
‘‘(c) EFFECTIVE DATE.—The President shall designate the effective date
of the suspension in the proclamation.
‘‘(d) PENALTIES.—
‘‘(1) SEIZURE AND FORFEITURE.—If the master, officer, or agent of
a vessel of a foreign country does an act for the vessel in the ports
or waters of the United States in violation of a proclamation issued
under this section, the vessel and the goods on the vessel may be seized
by, and forfeited to, the United States Government.
‘‘(2) FINE OR IMPRISONMENT.—A person opposing an official of the
Government enforcing this section shall be fined under title 18, impris-
oned for not more than 2 years, or both.
‘‘§ 60506. Retaliation against British dominions of North
America
‘‘(a) GENERAL AUTHORITY.—The President by proclamation may pro-
hibit vessels of the British dominions of North America, their masters and
crews, and products of or coming from those dominions, from entering wa-
ters, ports, or places of the United States when the President is satisfied
that—
‘‘(1) fishermen or fishing vessels of the United States in waters,
ports, or places of the British dominions of North America are being
or recently have been—
234
‘‘(A) denied rights provided by law or treaty;
‘‘(B) subjected to unreasonable restrictions in the exercise of
those rights; or
‘‘(C) otherwise harassed;
‘‘(2) fishermen or fishing vessels of the United States, having a per-
mit under the laws of the United States to dock or trade at a port
or place in the British dominions of North America, are being or re-
cently have been—
‘‘(A) denied the privilege of entering the port or place in the
same manner and under the same regulations applicable to trading
vessels of the most-favored-nation;
‘‘(B) prevented from buying supplies allowed to be sold to trad-
ing vessels of the most-favored-nation; or
‘‘(C) otherwise harassed; or
‘‘(3) other vessels of the United States or their masters or crews in
waters, ports, or places of the British dominions of North America are
being or recently have been—
‘‘(A) denied privileges given to vessels of the most-favored-na-
tion or their masters or crews; or
‘‘(B) otherwise harassed.
‘‘(b) COVERAGE AND EXCEPTIONS.—The President may apply a procla-
mation under this section to any of the subjects named, and may include
exceptions for vessels in distress or need of supplies. The President may
change, revoke, and renew the proclamation.
‘‘(c) PENALTIES.—A person violating a proclamation issued under this
section shall be fined under title 18, imprisoned for not more than 2 years,
or both. A vessel or goods found in waters, ports, or places of the United
States in violation of the proclamation may be seized by, and forfeited to,
the United States Government.
‘‘§ 60507. Suspension of free passage through Saint Marys
Falls Canal
‘‘(a) PURPOSE.—The purpose of this section is to secure reciprocal ad-
vantages for the citizens, ports, and vessels of the United States.
‘‘(b) GENERAL AUTHORITY.—When the President is satisfied that vessels
of the United States, or passengers or cargo being transported to a port
of the United States, are prohibited from passing through a canal or lock
connected with the navigation of the Saint Lawrence River, the Great
Lakes, or their connecting waterways, or burdened in that passage by tolls
or other means that are unreasonable in view of the free passage through
the Saint Marys Falls Canal allowed to vessels of all countries, the Presi-
dent by proclamation may suspend the right of free passage through the
235
Saint Marys Falls Canal for vessels owned by subjects of the country impos-
ing the prohibition, tolls, or other burdens and for passengers and cargo
being transported to the ports of that country, even when carried in vessels
of the United States. The suspension shall apply to the extent and for the
time the President considers appropriate.
‘‘(c) IMPOSITION OF TOLL.—
‘‘(1) IN GENERAL.—During a suspension under this section, the
President shall impose a toll of not more than $2 per ton on cargo and
not more than $5 on each passenger.
‘‘(2) EXCEPTIONS.—Notwithstanding paragraph (1), a toll may not
be imposed on passengers or cargo landed at Ogdensburg, New York,
or any port west of Ogdensburg and south of a line drawn from the
northern boundary of New York through the Saint Lawrence River, the
Great Lakes, and their connecting channels to the northern boundary
of Minnesota.
‘‘(d) COLLECTION OF TOLL.—
‘‘(1) IN GENERAL.—A toll imposed under this section shall be col-
lected under regulations prescribed by the Secretary of Homeland Secu-
rity. The Secretary may require the master of a vessel to provide a
sworn statement of the amount and kind of cargo, the number of pas-
sengers, and the destination of the passengers and cargo.
‘‘(2) PROOF OF LANDING.—When applicable, the Secretary also may
require satisfactory proof that the passengers and cargo were landed
at a port described in subsection (c)(2). Until that proof is provided,
the Secretary may assume the passengers and cargo were not landed
at such a port, and the amount of a toll that otherwise would be im-
posed is a lien enforceable against the vessel when found in the waters
of the United States.’’.
SEC. 9. SUBTITLE VII OF TITLE 46.
Subtitle VII of title 46, United States Code, as redesignated by section
8(a) of this Act, is amended as follows:
(1) The subtitle heading and analysis are amended to read as fol-
lows:
‘‘Subtitle VII—Security and Drug Enforcement
‘‘Chapter
Sec.
‘‘701.
Port Security ...............................................................................................
70101
‘‘703.
Maritime Security .....................................................................................
70301
‘‘705.
Maritime Drug Law Enforcement ......................................................
70501’’.
(2) Add after chapter 701 the following:
‘‘CHAPTER 703—MARITIME SECURITY
‘‘Sec.
‘‘70301.
Definitions.
‘‘70302.
International measures for seaport and vessel security.
‘‘70303.
Security standards at foreign ports.
236
‘‘70304.
Travel advisories on security at foreign ports.
‘‘70305.
Suspension of passenger services.
‘‘70306.
Report on terrorist threats.
‘‘§ 70301. Definitions
‘‘In this chapter:
‘‘(1) COMMON CARRIER.—The term ‘common carrier’ has the mean-
ing given that term in section 40102 of this title.
‘‘(2) PASSENGER
VESSEL.—The term ‘passenger vessel’ has the
meaning given that term in section 2101 of this title.
‘‘(3) SECRETARY.—The term ‘Secretary’ means the Secretary of the
department in which the Coast Guard is operating.
‘‘§ 70302. International measures for seaport and vessel se-
curity
‘‘Congress encourages the President to continue to seek agreement on
international seaport and vessel security through the International Maritime
Organization. In developing an agreement, each member country of the
International Maritime Organization should consult with appropriate private
sector interests in that country. The agreement would establish seaport and
vessel security measures and could include—
‘‘(1) seaport screening of cargo and baggage similar to that done at
airports;
‘‘(2) security measures to restrict access to cargo, vessels, and dock-
side property to authorized personnel only;
‘‘(3) additional security on board vessels;
‘‘(4) licensing or certification of compliance with appropriate security
standards; and
‘‘(5) other appropriate measures to prevent unlawful acts against
passengers and crews on vessels.
‘‘§ 70303. Security standards at foreign ports
‘‘(a) GENERAL REQUIREMENTS.—The Secretary shall develop and imple-
ment a plan to assess the effectiveness of the security measures maintained
at foreign ports that the Secretary, in consultation with the Secretary of
State, determines pose a high risk of acts of terrorism against passenger
vessels. In carrying out this subsection, the Secretary shall consult with the
Secretary of State about the terrorist threat that exists in each country and
poses a high risk of acts of terrorism against passenger vessels.
‘‘(b) NOTICE AND RECOMMENDATIONS TO OTHER COUNTRIES.—If the
Secretary, after implementing the plan under subsection (a), determines
that a port does not maintain and administer effective security measures,
the Secretary of State (after being informed by the Secretary) shall—
‘‘(1) notify the appropriate government authorities of the country in
which the port is located of the determination; and
237
‘‘(2) recommend steps necessary to bring the security measures at
that port up to the standard used by the Secretary in making the as-
sessment under subsection (a).
‘‘(c) ANTITERRORISM ASSISTANCE.—The President is encouraged to pro-
vide antiterrorism assistance related to maritime security under chapter 8
of part II of the Foreign Assistance Act of 1961 (22 U.S.C. 2349aa et seq.)
to foreign countries, especially for a port that the Secretary determines
under subsection (b) does not maintain and administer effective security
measures.
‘‘§ 70304. Travel advisories on security at foreign ports
‘‘(a) GENERAL REQUIREMENTS.—On being notified by the Secretary that
the Secretary has determined that a condition exists that threatens the safe-
ty or security of passengers, passenger vessels, or crew traveling to or from
a foreign port that the Secretary has determined under section 70303(b) of
this title does not maintain and administer effective security measures, the
Secretary of State immediately shall issue a travel advisory for that port.
The Secretary of State shall take the necessary steps to widely publicize the
travel advisory.
‘‘(b) LIFTING ADVISORIES.—A travel advisory issued under subsection (a)
may be lifted only if the Secretary, in consultation with the Secretary of
State, has determined that effective security measures are maintained and
administered at the port.
‘‘(c) NOTICE TO CONGRESS.—The Secretary of State shall notify Con-
gress immediately of any change in the status of a travel advisory issued
under this section.
‘‘§ 70305. Suspension of passenger services
‘‘(a) GENERAL AUTHORITY.—Whenever the President determines that a
foreign nation permits the use of territory under its jurisdiction as a base
of operations or training for, or as a sanctuary for, or in any way arms,
aids, or abets, a terrorist or terrorist group that knowingly uses the illegal
seizure of passenger vessels or the threat thereof as an instrument of policy,
the President may suspend the right of any passenger vessel common car-
rier to operate to or from, and the right of any passenger vessel of the
United States to use, a port in that foreign nation for passenger service.
The suspension may be without notice or hearing and for as long as the
President determines is necessary to ensure the security of passenger vessels
against unlawful seizure.
‘‘(b) PROHIBITION.—A passenger vessel common carrier, or a passenger
vessel of the United States, may not operate in violation of a suspension
under this section.
‘‘(c) PENALTIES.—
238
‘‘(1) DENIAL OF ENTRY.—If a person operates a vessel in violation
of this section, the Secretary may deny the vessels of that person entry
to ports of the United States.
‘‘(2) CIVIL PENALTY.—A person violating this section is liable to the
United States Government for a civil penalty of not more than
$50,000. Each day a vessel uses a prohibited port is a separate viola-
tion.
‘‘§ 70306. Report on terrorist threats
‘‘(a) CONTENT.—Not later than February 28 of each year, the Secretary
shall submit a report to Congress on the threat from acts of terrorism to
United States ports and vessels operating from those ports. The Secretary
shall include a description of activities undertaken under title I of the Mari-
time Transportation Security Act of 2002 (Public Law 107–295, 116 Stat.
2066) and an analysis of the effect of those activities on port security
against acts of terrorism.
‘‘(b) SUBMISSION.—The report shall be submitted to the Committee on
International Relations and the Committee on Transportation and Infra-
structure of the House of Representatives and the Committee on Foreign
Relations and the Committee on Commerce, Science, and Transportation of
the Senate. Any classified information in the report shall be submitted sepa-
rately as an addendum.
‘‘CHAPTER 705—MARITIME DRUG LAW ENFORCEMENT
‘‘Sec.
‘‘70501.
Findings and declarations.
‘‘70502.
Definitions.
‘‘70503.
Manufacture, distribution, or possession of controlled substances on vessels.
‘‘70504.
Jurisdiction and venue.
‘‘70505.
Failure to comply with international law as a defense.
‘‘70506.
Penalties.
‘‘70507.
Forfeitures.
‘‘§ 70501. Findings and declarations
‘‘Congress finds and declares that trafficking in controlled substances
aboard vessels is a serious international problem, is universally condemned,
and presents a specific threat to the security and societal well-being of the
United States.
‘‘§ 70502. Definitions
‘‘(a) APPLICATION OF OTHER DEFINITIONS.—The definitions in section
102 of the Comprehensive Drug Abuse Prevention and Control Act of 1970
(21 U.S.C. 802) apply to this chapter.
‘‘(b) VESSEL OF THE UNITED STATES.—In this chapter, the term ‘vessel
of the United States’ means—
‘‘(1) a vessel documented under chapter 121 of this title or num-
bered as provided in chapter 123 of this title;
239
‘‘(2) a vessel owned in any part by an individual who is a citizen
of the United States, the United States Government, the government
of a State or political subdivision of a State, or a corporation incor-
porated under the laws of the United States or of a State, unless—
‘‘(A) the vessel has been granted the nationality of a foreign na-
tion under article 5 of the 1958 Convention on the High Seas; and
‘‘(B) a claim of nationality or registry for the vessel is made
by the master or individual in charge at the time of the enforce-
ment action by an officer or employee of the United States who
is authorized to enforce applicable provisions of United States law;
and
‘‘(3) a vessel that was once documented under the laws of the United
States and, in violation of the laws of the United States, was sold to
a person not a citizen of the United States or placed under foreign reg-
istry or a foreign flag, whether or not the vessel has been granted the
nationality of a foreign nation.
‘‘(c) VESSEL
SUBJECT
TO
THE
JURISDICTION
OF
THE
UNITED
STATES.—
‘‘(1) IN GENERAL.—In this chapter, the term ‘vessel subject to the
jurisdiction of the United States’ includes—
‘‘(A) a vessel without nationality;
‘‘(B) a vessel assimilated to a vessel without nationality under
paragraph (2) of article 6 of the 1958 Convention on the High
Seas;
‘‘(C) a vessel registered in a foreign nation if the flag nation
has consented or waived objection to the enforcement of United
States law by the United States;
‘‘(D) a vessel in the customs waters of the United States;
‘‘(E) a vessel in the territorial waters of a foreign nation if the
nation consents to the enforcement of United States law by the
United States; and
‘‘(F) a vessel in the contiguous zone of the United States, as
defined in Presidential Proclamation 7219 of September 2, 1999
(43 U.S.C. 1331 note), that—
‘‘(i) is entering the United States;
‘‘(ii) has departed the United States; or
‘‘(iii) is a hovering vessel as defined in section 401 of the
Tariff Act of 1930 (19 U.S.C. 1401).
‘‘(2) CONSENT OR WAIVER OF OBJECTION.—Consent or waiver of ob-
jection by a foreign nation to the enforcement of United States law by
the United States under paragraph (1)(C) or (E)—
240
‘‘(A) may be obtained by radio, telephone, or similar oral or
electronic means; and
‘‘(B) is proved conclusively by certification of the Secretary of
State or the Secretary’s designee.
‘‘(d) VESSEL WITHOUT NATIONALITY.—
‘‘(1) IN GENERAL.—In this chapter, the term ‘vessel without nation-
ality’ includes—
‘‘(A) a vessel aboard which the master or individual in charge
makes a claim of registry that is denied by the flag nation whose
registry is claimed;
‘‘(B) a vessel aboard which the master or individual in charge
fails, on request of an officer of the United States authorized to
enforce applicable provisions of United States law, to make a claim
of nationality or registry for that vessel; and
‘‘(C) a vessel aboard which the master or individual in charge
makes a claim of registry and for which the claimed nation of reg-
istry does not affirmatively and unequivocally assert that the ves-
sel is of its nationality.
‘‘(2) CLAIM OF REGISTRY.—A claim of registry under paragraph
(1)(A) or (C) may be verified or denied by radio, telephone, or similar
oral or electronic means. The denial of such a claim by the claimed flag
nation is proved conclusively by certification of the Secretary of State
or the Secretary’s designee.
‘‘(e) CLAIM OF NATIONALITY OR REGISTRY.—A claim of nationality or
registry under this section includes only—
‘‘(1) possession on board the vessel and production of documents evi-
dencing the vessel’s nationality as provided in article 5 of the 1958
Convention on the High Seas;
‘‘(2) flying its flag nation’s ensign or flag; or
‘‘(3) a verbal claim of nationality or registry by the master or indi-
vidual in charge of the vessel.
‘‘§ 70503. Manufacture, distribution, or possession of con-
trolled substances on vessels
‘‘(a) PROHIBITIONS.—An individual may not knowingly or intentionally
manufacture or distribute, or possess with intent to manufacture or dis-
tribute, a controlled substance on board—
‘‘(1) a vessel of the United States or a vessel subject to the jurisdic-
tion of the United States; or
‘‘(2) any vessel if the individual is a citizen of the United States or
a resident alien of the United States.
241
‘‘(b) EXTENSION BEYOND TERRITORIAL JURISDICTION.—Subsection (a)
applies even though the act is committed outside the territorial jurisdiction
of the United States.
‘‘(c) NONAPPLICATION.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), subsection (a) does
not apply to—
‘‘(A) a common or contract carrier or an employee of the carrier
who possesses or distributes a controlled substance in the lawful
and usual course of the carrier’s business; or
‘‘(B) a public vessel of the United States or an individual on
board the vessel who possesses or distributes a controlled sub-
stance in the lawful course of the individual’s duties.
‘‘(2) ENTERED IN MANIFEST.—Paragraph (1) applies only if the
controlled substance is part of the cargo entered in the vessel’s mani-
fest and is intended to be imported lawfully into the country of destina-
tion for scientific, medical, or other lawful purposes.
‘‘(d) BURDEN OF PROOF.—The United States Government is not re-
quired to negative a defense provided by subsection (c) in a complaint, in-
formation, indictment, or other pleading or in a trial or other proceeding.
The burden of going forward with the evidence supporting the defense is
on the person claiming its benefit.
‘‘§ 70504. Jurisdiction and venue
‘‘(a) JURISDICTION.—Jurisdiction of the United States with respect to a
vessel subject to this chapter is not an element of an offense. Jurisdictional
issues arising under this chapter are preliminary questions of law to be de-
termined solely by the trial judge.
‘‘(b) VENUE.—A person violating section 70503 of this title shall be tried
in the district court of the United States for—
‘‘(1) the district at which the person enters the United States; or
‘‘(2) the District of Columbia.
‘‘§ 70505. Failure to comply with international law as a de-
fense
‘‘A person charged with violating section 70503 of this title does not have
standing to raise a claim of failure to comply with international law as a
basis for a defense. A claim of failure to comply with international law in
the enforcement of this chapter may be made only by a foreign nation. A
failure to comply with international law does not divest a court of jurisdic-
tion and is not a defense to a proceeding under this chapter.
‘‘§ 70506. Penalties
‘‘(a) VIOLATIONS.—A person violating section 70503 of this title shall be
punished as provided in section 1010 of the Comprehensive Drug Abuse
242
Prevention and Control Act of 1970 (21 U.S.C. 960). However, if the of-
fense is a second or subsequent offense as provided in section 1012(b) of
that Act (21 U.S.C. 962(b)), the person shall be punished as provided in
section 1012 of that Act (21 U.S.C. 962).
‘‘(b) ATTEMPTS AND CONSPIRACIES.—A person attempting or conspiring
to violate section 70503 of this title is subject to the same penalties as pro-
vided for violating section 70503.
‘‘§ 70507. Forfeitures
‘‘(a) IN GENERAL.—Property described in section 511(a) of the Com-
prehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C.
881(a)) that is used or intended for use to commit, or to facilitate the com-
mission of, an offense under section 70503 of this title may be seized and
forfeited in the same manner that similar property may be seized and for-
feited under section 511 of that Act (21 U.S.C. 881).
‘‘(b) PRIMA FACIE EVIDENCE OF VIOLATION.—Practices commonly rec-
ognized as smuggling tactics may provide prima facie evidence of intent to
use a vessel to commit, or to facilitate the commission of, an offense under
section 70503 of this title, and may support seizure and forfeiture of the
vessel, even in the absence of controlled substances aboard the vessel. The
following indicia, among others, may be considered, in the totality of the
circumstances, to be prima facie evidence that a vessel is intended to be
used to commit, or to facilitate the commission of, such an offense:
‘‘(1) The construction or adaptation of the vessel in a manner that
facilitates smuggling, including—
‘‘(A) the configuration of the vessel to ride low in the water or
present a low hull profile to avoid being detected visually or by
radar;
‘‘(B) the presence of any compartment or equipment that is
built or fitted out for smuggling, not including items such as a
safe or lock-box reasonably used for the storage of personal
valuables;
‘‘(C) the presence of an auxiliary tank not installed in accord-
ance with applicable law or installed in such a manner as to en-
hance the vessel’s smuggling capability;
‘‘(D) the presence of engines that are excessively over-powered
in relation to the design and size of the vessel;
‘‘(E) the presence of materials used to reduce or alter the heat
or radar signature of the vessel and avoid detection;
‘‘(F) the presence of a camouflaging paint scheme, or of mate-
rials used to camouflage the vessel, to avoid detection; or
243
‘‘(G) the display of false vessel registration numbers, false indi-
cia of vessel nationality, false vessel name, or false vessel home-
port.
‘‘(2) The presence or absence of equipment, personnel, or cargo in-
consistent with the type or declared purpose of the vessel.
‘‘(3) The presence of excessive fuel, lube oil, food, water, or spare
parts, inconsistent with legitimate vessel operation, inconsistent with
the construction or equipment of the vessel, or inconsistent with the
character of the vessel’s stated purpose.
‘‘(4) The operation of the vessel without lights during times lights
are required to be displayed under applicable law or regulation and in
a manner of navigation consistent with smuggling tactics used to avoid
detection by law enforcement authorities.
‘‘(5) The failure of the vessel to stop or respond or heave to when
hailed by government authority, especially where the vessel conducts
evasive maneuvering when hailed.
‘‘(6) The declaration to government authority of apparently false in-
formation about the vessel, crew, or voyage or the failure to identify
the vessel by name or country of registration when requested to do so
by government authority.
‘‘(7) The presence of controlled substance residue on the vessel, on
an item aboard the vessel, or on an individual aboard the vessel, of a
quantity or other nature that reasonably indicates manufacturing or
distribution activity.
‘‘(8) The use of petroleum products or other substances on the vessel
to foil the detection of controlled substance residue.
‘‘(9) The presence of a controlled substance in the water in the vicin-
ity of the vessel, where given the currents, weather conditions, and
course and speed of the vessel, the quantity or other nature is such
that it reasonably indicates manufacturing or distribution activity.’’.
SEC. 10. SUBTITLE VIII OF TITLE 46.
Title 46, United States Code, is amended by adding after subtitle VII the
following:
‘‘Subtitle VIII—Miscellaneous
‘‘Chapter
Sec.
‘‘801.
Wrecks and Salvage .................................................................................
80101
‘‘803.
Ice and Derelicts .......................................................................................
80301
‘‘805.
Safe Containers for International Cargo .........................................
80501
‘‘CHAPTER 801—WRECKS AND SALVAGE
‘‘Sec.
‘‘80101.
Vessel stranded on foreign coast.
‘‘80102.
License to salvage on Florida coast.
‘‘80103.
Property on Florida coast to be taken to port of entry.
‘‘80104.
Salvaging operations by foreign vessels.
244
‘‘80105.
Canadian vessels aiding vessels in United States waters.
‘‘80106.
International agreement on derelicts.
‘‘80107.
Salvors of life to share in remuneration.
‘‘§ 80101. Vessel stranded on foreign coast
‘‘(a) DUTIES OF CONSULAR OFFICER.—When a vessel of the United
States is stranded on a coast of a foreign country, the consular officer in
that country shall take proper measures, to the extent the laws of that coun-
try allow, to—
‘‘(1) save and secure the vessel and property on the vessel; and
‘‘(2) prepare an inventory of the property that is saved.
‘‘(b) DELIVERY TO OWNER.—After deducting the expenses, the consular
officer shall deliver the property, with an inventory, to the owner of the
property.
‘‘(c) LIMITATION ON TAKING POSSESSION.—A consular officer may not
take possession of property under this section when the owner, master, or
consignee is present or able to take possession of the property.
‘‘§ 80102. License to salvage on Florida coast
‘‘(a) LICENSING REQUIREMENTS.—To be regularly employed in the busi-
ness of salvaging on the coast of Florida, a vessel and its master each must
have a license issued by a judge of the district court of the United States
for a judicial district of Florida.
‘‘(b) JUDICIAL FINDINGS.—Before issuing a license under this section,
the judge must be satisfied, when the license is for—
‘‘(1) a vessel, that the vessel is seaworthy and properly equipped for
the business of saving property shipwrecked and in distress; or
‘‘(2) a master, that the master is trustworthy and innocent of any
fraud or misconduct related to property shipwrecked or saved on the
coast.
‘‘§ 80103. Property on Florida coast to be taken to port of
entry
‘‘(a) IN GENERAL.—Property taken from a wreck, the sea, or a key or
shoal, on the coast of Florida and within the jurisdiction of the United
States, shall be brought to a port of entry of the United States.
‘‘(b) SEIZURE AND FORFEITURE.—A vessel transporting property de-
scribed in subsection (a) to a foreign port may be seized by, and forfeited
to, the United States Government. A forfeiture under this subsection ac-
crues half to the informer and half to the Government.
‘‘§ 80104. Salvaging operations by foreign vessels
‘‘(a) PROHIBITION.—Except as provided in this section or section 80105
of this title, a foreign vessel may not, under penalty of forfeiture, engage
in salvaging operations on the Atlantic or Pacific coast of the United States,
in any portion of the Great Lakes or their connecting or tributary waters,
245
including any portion of the Saint Lawrence River through which the inter-
national boundary line extends, or in territorial waters of the United States
on the Gulf of Mexico.
‘‘(b) WHEN SUITABLE VESSEL NOT AVAILABLE.—The Secretary of
Homeland Security may authorize a foreign vessel to engage in salvaging
operations in a particular locality if, on investigation, the Secretary is satis-
fied that there is not available in that locality a suitable vessel that is—
‘‘(1) owned only by citizens of the United States (including a
Bowaters corporation under section 12118 of this title); and
‘‘(2) documented under chapter 121 of this title or numbered under
chapter 123 of this title.
‘‘(c) OPERATIONS AUTHORIZED BY TREATY.—This section does not pro-
hibit or restrict assistance to vessels or salvaging operations authorized by
treaty, including—
‘‘(1) article II of the Treaty between the United States and Great
Britain concerning reciprocal rights for United States and Canada in
the conveyance of prisoners and wrecking and salvage, signed at Wash-
ington, May 18, 1908 (35 Stat. 2036); or
‘‘(2) the Treaty between the United States of America and Mexico
to facilitate assistance to and salvage of vessels in territorial waters,
signed at Mexico City, June 13, 1935 (49 Stat. 3359).
‘‘§ 80105. Canadian vessels aiding vessels in United States
waters
‘‘(a) IN GENERAL.—Canadian vessels and wrecking equipment may give
aid to Canadian or other vessels and property wrecked, disabled, or in dis-
tress in the waters of the United States contiguous to Canada, including—
‘‘(1) the canal and improvement of the waters between Lake Erie
and Lake Huron; and
‘‘(2) the Saint Marys River and canal.
‘‘(b) RECIPROCITY.—This section does not apply after the President pro-
claims that privileges reciprocal to those under subsection (a) have been
withdrawn or rendered inoperative by the Government of Canada.
‘‘§ 80106. International agreement on derelicts
‘‘The President may make an international agreement with other govern-
ments interested in the navigation of the North Atlantic Ocean, providing
for the reporting, marking, and removal of dangerous wrecks, derelicts, and
other menaces to navigation outside the coast waters of the countries bor-
dering the North Atlantic Ocean.
‘‘§ 80107. Salvors of life to share in remuneration
‘‘(a) ENTITLEMENT OF SALVORS.—A salvor of human life, who gave aid
following an accident giving rise to salvage, is entitled to a fair share of
246
the payment awarded to the salvor for salvaging the vessel or other property
or preventing or minimizing damage to the environment.
‘‘(b) COMMON OWNERSHIP OF VESSELS.—The right to remuneration for
aid or salvage services is not affected by common ownership of the vessels
giving and receiving the aid or salvage services.
‘‘(c) TIME LIMIT ON BRINGING ACTIONS.—A civil action to recover remu-
neration for giving aid or salvage services must be brought within 2 years
after the date the aid or salvage services were given, unless the court in
which the action is brought is satisfied that during that 2-year period there
had not been a reasonable opportunity to seize the aided or salvaged vessel
within the jurisdiction of the court or within the territorial waters of the
country of the plaintiff’s residence or principal place of business.
‘‘(d) NONAPPLICATION.—This section does not apply to a vessel of war
or a vessel owned by the United States Government appropriated only to
a public service.
‘‘CHAPTER 803—ICE AND DERELICTS
‘‘Sec.
‘‘80301.
International agreements.
‘‘80302.
Patrol services.
‘‘80303.
Speed of vessel in ice region.
‘‘§ 80301. International agreements
‘‘(a) GENERAL AUTHORITY.—The President may make agreements with
interested maritime countries to—
‘‘(1) maintain in the North Atlantic Ocean a service of ice patrol,
of study and observation of ice and current conditions, and of assist-
ance to vessels and their crews requiring assistance within the limits
of the patrol;
‘‘(2) maintain a service of study and observation of ice and current
conditions in the waters affecting the set and drift of ice in the North
Atlantic Ocean; and
‘‘(3) take all practicable steps to ensure the destruction or removal
of derelicts in the northern part of the Atlantic Ocean, east of the line
drawn from Cape Sable to a point in latitude 34 degrees north, lon-
gitude 70 degrees west, if the destruction or removal is necessary.
‘‘(b) PAYMENT BETWEEN COUNTRIES.—The President may include in an
agreement under subsection (a) a provision for—
‘‘(1) payment to the United States Government by other countries
for their proportionate share of the expense of maintaining the services;
or
‘‘(2) contribution by the Government for its proportionate share if
the agreement provides for another country to maintain the services.
247
‘‘§ 80302. Patrol services
‘‘(a) GENERAL REQUIREMENTS.—Unless the agreements made under sec-
tion 80301 of this title provide otherwise, an ice patrol shall be maintained
during the entire ice season in guarding the southeastern, southern, and
southwestern limits of the region of icebergs in the vicinity of the Grand
Banks of Newfoundland. The patrol shall inform trans-Atlantic and other
passing vessels by radio and other available means of the ice conditions and
the extent of the dangerous region. During the ice season, there shall be
maintained a service of study of ice and current conditions, a service of pro-
viding assistance to vessels and crews requiring assistance, and a service of
removing and destroying derelicts. Any of these services may be maintained
during the remainder of the year as may be advisable.
‘‘(b) WARNINGS TO VESSELS.—An ice patrol vessel shall warn any vessel
known to be approaching a dangerous area and recommend safe routes.
‘‘(c) RECORDING AND REPORTING INCIDENTS.—
‘‘(1) RECORDING.—An ice patrol vessel shall record the name of a
vessel and the facts of the case when the patrol observes or knows that
the vessel—
‘‘(A) is on other than a regular recognized or advertised route
crossing the North Atlantic Ocean;
‘‘(B) has crossed the fishing banks of Newfoundland north of
latitude 43 degrees north during the fishing season; or
‘‘(C) has passed through regions known or believed to be endan-
gered by ice when proceeding to and from ports of North America.
‘‘(2) REPORTING.—The name of the vessel and all pertinent informa-
tion about the incident shall be reported to the government of the coun-
try to which the vessel belongs if that government requests.
‘‘(d) ADMINISTRATION.—The Commandant of the Coast Guard, under
the direction of the Secretary of the department in which the Coast Guard
is operating, shall carry out the services provided for in this section and
shall assign necessary vessels, material, and personnel of the Coast Guard.
On request of such Secretary, the head of an agency may detail personnel,
lend or contribute material or equipment, or otherwise assist in carrying out
the services provided for in this section.
‘‘(e) ANNUAL REPORT.—The Commandant shall publish an annual report
of the activities of the services provided for in this section. A copy of the
report shall be provided to each interested foreign government and to each
agency assisting in the work.
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‘‘§ 80303. Speed of vessel in ice region
‘‘(a) REQUIREMENT.—The master of a vessel of the United States, when
ice is reported on or near the vessel’s course, shall proceed at a moderate
speed or change the course of the vessel to go well clear of the danger zone.
‘‘(b) CIVIL PENALTY.—A master violating this section is liable to the
United States Government for a civil penalty of not more than $500.
‘‘CHAPTER 805—SAFE CONTAINERS FOR
INTERNATIONAL CARGO
‘‘Sec.
‘‘80501.
Definitions.
‘‘80502.
Application of Convention.
‘‘80503.
General authority of the Secretary.
‘‘80504.
Approval and examination.
‘‘80505.
Enforcement.
‘‘80506.
Delegation of authority.
‘‘80507.
Employee protection.
‘‘80508.
Amendments to Convention.
‘‘80509.
Civil penalty.
‘‘§ 80501. Definitions
‘‘In this chapter:
‘‘(1) CONTAINER.—The term ‘container’ has the meaning given that
term in the Convention.
‘‘(2) CONVENTION.—The term ‘Convention’ means the International
Convention for Safe Containers, and its annexes, done at Geneva, Swit-
zerland, December 2, 1972.
‘‘(3) INTERNATIONAL TRANSPORT.—The term ‘international trans-
port’ means the transportation of a container between—
‘‘(A) a place in a foreign country and a place in the jurisdiction
of the United States; or
‘‘(B) two places outside the United States by United States car-
riers.
‘‘(4) OWNER.—The term ‘owner’ includes the lessee or bailee of a
container if a written lease or bailment provides for the lessee or bailee
to exercise the owner’s responsibility for maintaining and examining
the container.
‘‘(5) SAFETY APPROVAL PLATE.—The term ‘safety approval plate’
has the meaning given that term in annex I of the Convention.
‘‘§ 80502. Application of Convention
‘‘The Convention applies to an owner of a container used in international
transport if the owner is domiciled or has its principal office in the United
States.
‘‘§ 80503. General authority of the Secretary
‘‘(a) IN GENERAL.—The Secretary of the department in which the Coast
Guard is operating shall carry out the Convention and this chapter in the
United States.
249
‘‘(b) REGULATIONS.—The Secretary shall prescribe regulations to carry
out this chapter. The regulations shall—
‘‘(1) establish procedures for testing, inspecting, and initially approv-
ing containers and designs for containers, including procedures for at-
taching, invalidating, and removing safety approval plates for con-
tainers;
‘‘(2) establish procedures to be followed by the owners of containers
for the periodic examination of containers as provided in the Conven-
tion; and
‘‘(3) provide a method for developing, collecting, and disseminating
information about container safety and the international transport of
containers.
‘‘(c) SAFETY APPROVAL PLATES.—If the owner of a container without a
safety approval plate establishes that the container satisfies the standards
of the Convention, the Secretary may authorize a safety approval plate to
be attached to the container.
‘‘(d) SCHEDULE OF FEES.—The Secretary may prescribe a schedule of
fees for services performed by the Secretary, or by a person delegated au-
thority under section 80506 of this title, for the testing, inspection, and ini-
tial approval of containers and container designs.
‘‘(e) ENCOURAGING INTERMODAL TRANSPORT.—To the maximum extent
possible, the Secretary shall encourage the development and use of inter-
modal transport, using containers built to facilitate economical, safe, and
expeditious handling of containerized cargo without intermediate reloading
when it is being transported over land, air, and sea areas.
‘‘§ 80504. Approval and examination
‘‘(a) DOMICILE AND PRINCIPAL OFFICE IN UNITED STATES.—A con-
tainer owner domiciled and having its principal office in the United States
shall have the container—
‘‘(1) approved initially under procedures prescribed by the Secretary
of the department in which the Coast Guard is operating or by the gov-
ernment of another country that is a party to the Convention; and
‘‘(2) examined periodically as provided in the Convention under pro-
cedures prescribed by the Secretary.
‘‘(b) DOMICILE OR PRINCIPAL OFFICE IN UNITED STATES.—A container
owner domiciled or having its principal office in the United States shall have
the container—
‘‘(1) approved initially under procedures prescribed by the Secretary
or by the government of another country that is a party to the Conven-
tion; and
250
‘‘(2) examined periodically as provided in the Convention, under pro-
cedures prescribed by the government of the country in which the
owner is domiciled or has its principal office, as long as that country
is a party to the Convention.
‘‘(c) NEITHER DOMICILE NOR PRINCIPAL OFFICE IN UNITED STATES.—
A container owner neither domiciled nor having its principal office in the
United States or another country that is a party to the Convention may
submit a container for initial approval and periodic examination under pro-
cedures prescribed by the Secretary.
‘‘§ 80505. Enforcement
‘‘(a) IN GENERAL.—To enforce the Convention, this chapter, and regula-
tions prescribed under this chapter, the Secretary of the department in
which the Coast Guard is operating may—
‘‘(1) examine, or require to be examined, containers in international
transport;
‘‘(2) approve designs for containers;
‘‘(3) inspect and test containers being manufactured;
‘‘(4) issue a detention order removing or excluding a container from
service until the container owner satisfies the Secretary that the con-
tainer meets the standards of the Convention, if the container—
‘‘(A) does not have a safety approval plate attached to it; or
‘‘(B) has a safety approval plate attached but there is signifi-
cant evidence that the container is in a condition that creates an
obvious risk to safety;
‘‘(5) take other appropriate action, including issuing necessary or-
ders, to remove a container from service or restrict its use if the con-
tainer is not in compliance with the Convention, this chapter, or regula-
tions prescribed under this chapter, but does not present an obvious
risk to safety; and
‘‘(6) allow a container found to be unsafe or without a safety ap-
proval plate to be moved to another location for repair or other disposi-
tion, under restrictions consistent with the intent of the Convention.
‘‘(b) PAYMENT OF EXPENSES.—
‘‘(1) EXAMINATION.—The owner of a container involved in an action
by the Secretary under this section related to an examination of the
container shall pay or reimburse the Secretary for the expenses arising
from that action, except for the costs of routine examinations of the
container or a safety approval plate.
‘‘(2) TESTING, INSPECTION, AND INITIAL APPROVAL.—The owner of
a container submitted to the procedure established by the Secretary for
testing, inspection, and initial approval, and the manufacturer of a con-
251
tainer that submits a design to the procedure established by the Sec-
retary for testing, inspection, and initial approval, shall pay or reim-
burse the Secretary for the expenses arising from the testing, inspec-
tion, or approval.
‘‘(3) CREDIT TO APPROPRIATION.—Amounts received by the Sec-
retary as reimbursement shall be credited to the appropriation for oper-
ating expenses of the Coast Guard.
‘‘(c) PRESUMPTION BASED ON SAFETY APPROVAL PLATE.—A container
bearing a safety approval plate authorized by a country that is a party to
the Convention is presumed to be in a safe condition unless there is signifi-
cant evidence that the container is in a condition that creates an obvious
risk to safety.
‘‘(d) NOTICE OF ORDERS.—
‘‘(1) IN GENERAL.—When the Secretary issues a detention or other
order under this section, the Secretary promptly shall notify in
writing—
‘‘(A) the owner of the container;
‘‘(B) the owner’s agent; or
‘‘(C) if the identity of the owner is not apparent from the con-
tainer or shipping documents, the custodian.
‘‘(2) INFORMATION TO INCLUDE.—The notification shall identify the
container involved, give the location of the container, and describe the
condition or situation giving rise to the order.
‘‘(e) DURATION OF ORDERS.—An order issued by the Secretary under
this section remains in effect until—
‘‘(1) the Secretary declares the container to be in compliance with
the standards of the Convention; or
‘‘(2) the container is removed permanently from service.
‘‘(f) NOTICE OF DEFECTIVE CONTAINER TO COUNTRY ISSUING SAFETY
APPROVAL PLATE.—If the Secretary has reason to believe that a container
bearing a safety approval plate issued by another country was defective at
the time of approval, the Secretary shall notify that country.
‘‘§ 80506. Delegation of authority
‘‘(a) IN GENERAL.—The Secretary of the department in which the Coast
Guard is operating may delegate to any person, including a public or private
agency or nonprofit organization, authority to grant initial approval for con-
tainers and designs and to attach safety approval plates.
‘‘(b) REGULATIONS.—Before making a delegation under this section, the
Secretary shall prescribe regulations establishing—
‘‘(1) criteria to be followed in selecting a person to whom authority
is to be delegated;
252
‘‘(2) a detailed description of the duties and powers to be carried out
by the person to whom authority is delegated, including the records the
person shall keep; and
‘‘(3) the review the Secretary will conduct to decide whether the per-
son is carrying out the delegated duties and powers properly.
‘‘(c) INSPECTION OF RECORDS.—A person delegated authority under this
section shall make available to the Secretary for inspection, on request,
records the person is required to keep.
‘‘(d) PENALTIES AND ORDERS.—A person delegated authority under this
section may not—
‘‘(1) assess or collect, or attempt to assess or collect, a penalty for
violation of the Convention, this chapter, or an order issued by the Sec-
retary under this chapter; or
‘‘(2) issue or attempt to issue a detention or other order.
‘‘(e) PUBLICATION.—The Secretary shall publish in the Federal Register
or other appropriate publication—
‘‘(1) the name and address of each person to whom authority is dele-
gated;
‘‘(2) the duties and powers delegated; and
‘‘(3) the period of the delegation.
‘‘(f) REVOCATION.—The Secretary may revoke a delegation of authority
under this section at any time.
‘‘§ 80507. Employee protection
‘‘(a) PROHIBITION.—A person may not discharge or discriminate against
an employee because the employee has reported the existence of an unsafe
container or a violation of this chapter or a regulation prescribed under this
chapter.
‘‘(b) COMPLAINTS.—An employee alleging to have been discharged or dis-
criminated against in violation of subsection (a) may file a complaint with
the Secretary of Labor. The complaint must be filed within 60 days after
the violation.
‘‘(c) ENFORCEMENT.—The Secretary of Labor may investigate the com-
plaint. If the Secretary of Labor finds there has been a violation, the Sec-
retary of Labor may bring a civil action in an appropriate district court of
the United States. The court has jurisdiction to restrain violations of sub-
section (a) and order appropriate relief, including reinstatement of the em-
ployee to the employee’s former position with back pay.
‘‘(d) NOTICE TO COMPLAINANT.—Within 30 days after receiving a com-
plaint under this section, the Secretary of Labor shall notify the complain-
ant of the intended action on the complaint.