171
‘‘(C) a tug, barge, or other watercraft (whether or not docu-
mented) owned by a citizen of the United States and used in es-
sential water transportation or in the fisheries, except only for 
sport fishing. 
‘‘(2) CARGO.—The term ‘cargo’ includes a loaded or empty container 
on a vessel. 
‘‘(3) TRANSPORTATION IN THE WATERBORNE COMMERCE OF THE 
UNITED STATES.—The term ‘transportation in the waterborne com-
merce of the United States’ includes the operation of a vessel in the 
fisheries, except only for sport fishing. 
‘‘(4) WAR RISKS.—The term ‘war risks’ includes, to the extent the 
Secretary of Transportation determines—
‘‘(A) any part of a loss excluded from marine insurance cov-
erage under a ‘free of capture or seizure’ clause or analogous 
clause; and 
‘‘(B) any other loss from a hostile act, including confiscation, 
expropriation, nationalization, or deprivation. 
‘‘§ 53902. Authority to provide insurance 
‘‘(a) IN GENERAL.—With the approval of the President, and after such 
consultation with interested agencies of United States Government as the 
President may require, the Secretary of Transportation may provide insur-
ance and reinsurance against loss or damage from war risks as provided by 
this chapter whenever it appears to the Secretary that insurance adequate 
for the needs of the waterborne commerce of the United States cannot be 
obtained on reasonable terms and conditions from companies authorized to 
do insurance business in a State of the United States. 
‘‘(b) CONSIDERATION OF RISK.—Insurance or reinsurance under this 
chapter shall be based, insofar as practicable, on consideration of the risk 
involved. 
‘‘(c) AVAILABILITY
OF VESSEL DURING WAR
OR NATIONAL EMER-
GENCY.—Insurance or reinsurance for a vessel may be provided under this 
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
172
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 
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
173
‘‘(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 valu-
ation—
‘‘(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. 
‘‘(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
174
claim adjusted, compromised, settled, adjudged, or paid may not exceed the 
stated valuation. However, if the insured has rejected the valuation, the in-
sured—
‘‘(1) shall be paid, as a tentative advance only, 75 percent of the 
stated valuation; and 
‘‘(2) may bring a civil action against the United States in a court 
having 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. 
‘‘§ 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.
175
‘‘(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.—The Secretary of Transportation may request the 
Secretary of the Treasury to invest such portion of the fund as is not, in 
the judgment of the Secretary of Transportation, required to meet the cur-
rent needs of the fund. These investments shall be made by the Secretary 
of the Treasury in public debt securities of the Government, with maturities 
suitable to the needs of the fund, and bearing interest rates determined by 
the Secretary of the Treasury, taking into consideration current market 
yields on outstanding marketable obligations of the Government of com-
parable maturity. 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, 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-
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.
176
‘‘(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 agency of the United States Government, the Secretary may use in-
formation, services, facilities, officers, and employees of the agency in car-
rying 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 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 Dis-
trict Court for the District of Columbia or in the district court for any dis-
trict 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 ini-
tially or on the motion of either party. 
‘‘(b) EXCLUSIVE REMEDY.—A civil action against the United States 
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 
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-
177
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 December 31, 2010.
‘‘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. 
‘‘55121.
Transportation of merchandise and passengers on Canadian vessels.
‘‘§ 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—
‘‘(1) American Samoa; 
‘‘(2) the Northern Mariana Islands, except as provided in section 
502(b) of the Covenant To Establish a Commonwealth of the Northern 
Mariana Islands in Political Union With the United States of America 
(48 U.S.C. 1801 note); 
‘‘(3) Canton Island until the President declares by proclamation that 
the coastwise laws apply to Canton Island; or
178
‘‘(4) the Virgin Islands until the President declares by proclamation 
that the coastwise laws apply to the Virgin Islands. 
‘‘§ 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 to which the coastwise laws apply, either di-
rectly 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-
179
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.
180
‘‘§ 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 ocean incineration vessel owned by or under 
construction on May 1, 1982, for a corporation wholly owned by citi-
zens 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 na-
tion in which it is registered. The inspection shall be the same as would 
be required of a vessel of the United States, including drydock inspec-
tion and internal examination of tanks and void spaces. The inspection 
may be made concurrently with an inspection by that 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 super-
structure. The Coast Guard shall allow the substitution of fittings, ma-
terial, apparatus, equipment, and appliances different from those re-
quired 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
181
another such barge owned or leased by the same owner or operator. How-
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) PARAGRAPHS
(1)–(4).—Paragraphs (1)–(4) of subsection (a) 
apply only if the items named are owned or leased by the owner or op-
erator of the vessel and transported for its use in handling its cargo 
in foreign trade. 
‘‘(2) PARAGRAPH (5).—Paragraph (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:
182
‘‘(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, in-
cluding—
‘‘(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;
183
‘‘(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—
184
‘‘(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—
185
‘‘(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 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
186
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.—
‘‘(1) IN GENERAL.—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 further 
advanced) in a port of the Virgin Islands for immediate consumption 
in those islands. Fish unloaded under this paragraph may be sold or 
transferred only for immediate consumption. In the absence of satisfac-
tory evidence that a sale or transfer to an agent, representative, or em-
ployee of a freezer or cannery is for immediate consumption, the sale 
or transfer is deemed not to be for immediate consumption. This para-
graph does not prohibit the freezing, smoking, or other processing of 
fresh fish by the ultimate consumer of the fish. 
‘‘(2) SEIZURE, FORFEITURE, AND PENALTY.—Fish unloaded in the 
Virgin Islands that are retained, sold, or transferred, except as allowed 
by paragraph (1), are liable to seizure by and forfeiture to the United 
States Government. A person 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 violation. A penalty or forfeiture under this 
paragraph may be compromised, modified, or remitted under section 
2107(b) of this title. 
‘‘(d) NORTHERN MARIANA ISLANDS.—Subsection (a) does not apply to 
the Northern Mariana Islands. 
‘‘§ 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 are 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
187
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; 
‘‘(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.
188
‘‘§ 55121. Transportation of merchandise and passengers on 
Canadian vessels 
‘‘(a) BETWEEN ROCHESTER AND ALEXANDRIA BAY.—Until passenger 
service is established by vessels of the United States between the port of 
Rochester, New York, and the port of Alexandria Bay, New York, the Sec-
retary of Homeland Security may issue annually permits to Canadian pas-
senger vessels to transport passengers between those ports. Canadian vessels 
holding such a permit are not subject to section 55103 of this title. 
‘‘(b) WITHIN ALASKA OR BETWEEN ALASKA AND OTHER POINTS IN THE 
UNITED STATES.—Until the Secretary of Transportation determines that 
service by vessels of the United States is available to provide the transpor-
tation described in paragraph (1) or (2), sections 55102 and 55103 of this 
title do not apply to the transportation on Canadian vessels of—
‘‘(1) passengers between ports in southeastern Alaska; or 
‘‘(2) passengers or merchandise between Hyder, Alaska, and other 
points in southeastern Alaska or in the United States outside Alaska.
‘‘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. 
‘‘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
189
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. 
‘‘§ 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 commercial 
vessel of the United States’ does not include a vessel that, after September 
21, 1961, was built or rebuilt outside the United States or documented 
under the laws of a foreign country, until the vessel has been documented 
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-
190
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 commercial vessels of the 
United States, to the extent those vessels are available at fair and reason-
able rates for commercial vessels of the United States, in a manner that 
will ensure a fair and reasonable participation of commercial vessels of the 
United States 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. 
‘‘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;
191
‘‘(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) 
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 paragraph (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;
192
‘‘(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 paragraph 
does not exempt from the cargo preference provisions referred to in 
section 55314(b) of this title any requirement otherwise applicable to 
the materials, goods, equipment, or services imported under the trans-
action. 
‘‘§ 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 commercial vessels of the United States, 25 percent of the 
gross tonnage of agricultural commodities or their products specified in 
subsection (b) shall be transported each calendar year on commercial 
vessels of the United States that—
‘‘(A) are necessary for national security; and 
‘‘(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);
193
‘‘(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 trans-
portation on vessels of the United States under subsection (a) is sub-
ject to the same terms and conditions as provided in section 55305 of 
this title. 
‘‘(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 registry 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 registry of the vessel, and then there shall be allocated to 
the Great Lakes port range any cargoes for which it has the lowest 
landed cost under that calculation. The requirements for transportation 
on vessels of the United States under this section and section 55305 
of this title do not apply to commodities allocated to the Great Lakes 
port range under paragraph (2). Commodities allocated to the Great 
Lakes port range under paragraph (2) may not be reallocated or di-
194
verted to another port range to meet those requirements to the extent 
that the total tonnage of commodities to which paragraph (2) applies 
that is furnished and transported from the Great Lakes port range is 
less than 25 percent of the total annual tonnage of the commodities 
furnished. 
‘‘(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 agen-
cy—
‘‘(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 vessels of the United States resulting from the application of 
this subsection may not reduce the gross tonnage of commodities re-
quired by this section and section 55305 of this title to be transported 
on vessels of the United States. 
‘‘§ 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.
195
‘‘§ 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 
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.
196
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 
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.
197
‘‘(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 
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.
198
‘‘(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. 
‘‘§ 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 vessels of the United States.
199
‘‘§ 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.
‘‘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
200
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 
‘‘(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-
201
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 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 paragraph (1), or an inter-
est 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 
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
202
‘‘(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. 
‘‘(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.—
203
‘‘(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. 
‘‘§ 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.
204
‘‘§ 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.—
‘‘(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,
205
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 to recover just compensation. If the tentative advance 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—
‘‘(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.
206
‘‘§ 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 
‘‘(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
207
‘‘(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 paragraph (1), is not earning or will not earn a 
reasonable 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. 
‘‘(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
208
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.
‘‘§ 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.
209
‘‘(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; 
‘‘(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 paragraph (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