164 
bursement of an obligor for expenditures previously made for) a contract for 
the construction or reconstruction of a vessel if— 
‘‘(1) the vessel is designed and to be used for commercial use in coast-
wise, intercoastal, or foreign trade; 
‘‘(2) the construction or reconstruction is necessary to replace a vessel 
that cannot continue to be operated because of a change required by law 
in the standards for the operation of vessels, and the applicant for the 
guarantee or commitment would not otherwise legally be able to continue 
operating vessels in the trades in which the applicant operated vessels 
before the change; 
‘‘(3) the applicant is presently engaged in transporting cargoes in ves-
sels of the type and class that will be constructed or reconstructed under 
this section and agrees to employ vessels constructed or reconstructed 
under this section as replacements only for vessels made obsolete by the 
change in operating standards; 
‘‘(4) the capacity of the vessels to be constructed or reconstructed under 
this section will not increase the cargo carrying capacity of the vessels 
being replaced; 
‘‘(5) the Secretary has not determined that the market demand for the 
vessel over its useful life will diminish so as to make granting the guar-
antee fiduciarily imprudent; 
‘‘(6) the vessel, if to be reconstructed, will have a useful life of at least 
15 years after the reconstruction; and 
‘‘(7) the Secretary has considered the criteria specified in section 
53708(a)(3)–(5) of this title. 
‘‘(b) TERM AND AMOUNT OF OBLIGATION.— 
‘‘(1) TERM.—The term of an obligation guaranteed under this section 
may not exceed 25 years. 
‘‘(2) AMOUNT.—The amount of an obligation guaranteed under this 
section may not exceed 87.5 percent of the actual cost or depreciated ac-
tual cost to the applicant for the construction or reconstruction of the 
vessel. The Secretary may not establish a percentage under this para-
graph that is to be applied uniformly to all guarantees or commitments 
to guarantee made under this section. 
‘‘(c) APPLICABILITY OF OTHER PROVISIONS.—A guarantee or commitment 
to guarantee under this section is also subject to sections 53701, 53702(a), 
53704, 53705, 53707(a), 53708(d) and (e), 53709(a), 53710(a)(1), (2), and 
(4) and (c), 53711(a), 53713, 53714, 53717, and 53721–53725 of this title. 
‘‘(d) SECURITY AGAINST DEFAULT.—The Secretary shall require by regula-
tion that an applicant under this section provide adequate security against 
default.
165 
‘‘(e) GUARANTEE FEES.—The Secretary may establish a fee for the guar-
antee of an obligation under this section that is in addition to the fee estab-
lished under section 53714 of this title. The fee may be— 
‘‘(1) an annual fee of not more than an additional 1 percent added 
to the fee established under section 53714 of this title; or 
‘‘(2) a fee based on the amount of the obligation versus the percentage 
of the obligor’s fleet being replaced by vessels constructed or reconstructed 
under this section. 
‘‘§ 53735. Fisheries financing and capacity reduction 
‘‘(a) DEFINITION.—In this section, the term ‘program’ means a fishing ca-
pacity reduction program established under section 312 of the Magnuson-Ste-
vens Fishery Conservation and Management Act (16 U.S.C. 1861a). 
‘‘(b) GUARANTEE AUTHORITY.—The Secretary may guarantee the repay-
ment of debt obligations issued by entities under this section. Debt obligations 
to be guaranteed may be issued by any entity that has been approved by the 
Secretary and has agreed with the Secretary to conditions the Secretary con-
siders necessary for this section to achieve the objective of the program and 
to protect the interest of the United States. 
‘‘(c) REQUIREMENTS
OF OBLIGATIONS.—A debt obligation guaranteed 
under this section shall— 
‘‘(1) be treated in the same manner and to the same extent as other 
obligations guaranteed under this chapter, except with respect to provi-
sions of this chapter that by their nature cannot be applied to obligations 
guaranteed under this section; 
‘‘(2) have the fishing fees established under the program paid into a 
separate subaccount of the fishing capacity reduction fund established 
under this section; 
‘‘(3) not exceed $100,000,000 in an unpaid principal amount out-
standing at any one time for a program; 
‘‘(4) have such maturity (not to exceed 20 years), take such form, and 
contain such conditions as the Secretary determines necessary for the 
program to which they relate; 
‘‘(5) have as the exclusive source of repayment (subject to the second 
sentence of subsection (d)(2)) and as the exclusive payment security, the 
fishing fees established under the program; and 
‘‘(6) at the discretion of the Secretary be issued in the public market 
or sold to the Federal Financing Bank. 
‘‘(d) FISHING CAPACITY REDUCTION FUND.— 
‘‘(1) IN GENERAL.—There is a separate account in the Treasury, 
known as the Fishing Capacity Reduction Fund. Within the Fund, at 
least one subaccount shall be established for each program into which
166 
shall be paid all fishing fees established under the program and other 
amounts authorized for the program. 
‘‘(2) AVAILABILITY
OF
AMOUNTS.—Amounts in the Fund shall be 
available, without appropriation or fiscal year limitation, to the Sec-
retary to pay the cost of the program, including payments to financial 
institutions to pay debt obligations incurred by entities under this sec-
tion. Funds available for this purpose from other amounts available for 
the program may also be used to pay those debt obligations. 
‘‘(3) INVESTMENT.—Amounts in the Fund that are not currently need-
ed for the purpose of this section shall be kept on deposit or invested in 
obligations of the United States Government. 
‘‘(e) REGULATIONS.—The Secretary shall prescribe regulations the Sec-
retary considers necessary to carry out this section. 
‘‘CHAPTER 539—WAR RISK INSURANCE 
‘‘Sec. 
‘‘53901.
Definitions. 
‘‘53902.
Authority to provide insurance. 
‘‘53903.
Insurable interests. 
‘‘53904.
Liability insurance for persons involved in war or defense efforts. 
‘‘53905.
Agency insurance. 
‘‘53906.
Hull insurance valuation. 
‘‘53907.
Reinsurance. 
‘‘53908.
Additional insurance privately obtained. 
‘‘53909.
War risk insurance revolving fund. 
‘‘53910.
Administrative. 
‘‘53911.
Civil actions for losses. 
‘‘53912.
Expiration date. 
‘‘§ 53901. Definitions 
‘‘In this chapter: 
‘‘(1) AMERICAN VESSEL.—The term ‘American vessel’ includes— 
‘‘(A) a documented vessel with a registry or coastwise endorse-
ment under chapter 121 of this title; 
‘‘(B) an undocumented vessel owned or chartered by or made 
available to the United States Government; and 
‘‘(C) a tug, barge, or other watercraft (whether or not docu-
mented) owned by a citizen of the United States and used in essen-
tial 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 commerce 
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 Sec-
retary of Transportation determines—
167 
‘‘(A) any part of a loss excluded from marine insurance coverage 
under a ‘free of capture or seizure’ clause or analogous clause; and 
‘‘(B) any other loss from a hostile act, including confiscation, ex-
propriation, nationalization, or deprivation. 
‘‘§ 53902. Authority to provide insurance 
‘‘(a) IN GENERAL.—With the approval of the President, and after such con-
sultation with interested agencies of United States Government as the Presi-
dent may require, the Secretary of Transportation may provide insurance 
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 chap-
ter shall be based, insofar as practicable, on consideration of the risk involved. 
‘‘(c) AVAILABILITY OF VESSEL DURING WAR OR NATIONAL EMERGENCY.— 
Insurance or reinsurance for a vessel may be provided under this chapter only 
on the condition that the vessel will be available to the Government in time 
of war or national emergency. 
‘‘§ 53903. Insurable interests 
‘‘(a) IN GENERAL.—The Secretary of Transportation may provide insur-
ance and reinsurance under this chapter for— 
‘‘(1) an American vessel, including a vessel under construction; 
‘‘(2) a foreign vessel— 
‘‘(A) owned by a citizen of the United States; or 
‘‘(B) engaged in transportation in the waterborne commerce of 
the United States or in such other transportation by water or such 
other services as the Secretary considers to be in the interest of the 
national defense or national economy of the United States, when so 
engaged; 
‘‘(3) cargo— 
‘‘(A) shipped or to be shipped on a vessel insurable under this 
section, including by express or registered mail; 
‘‘(B) owned by a citizen or resident of the United States; 
‘‘(C) imported to or exported from the United States, or sold or 
purchased by a citizen or resident of the United States, under a con-
tract 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;
168 
‘‘(4) disbursements, including advances to masters and general average 
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 vessel 
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 con-
sider 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), in-
sofar as it involves a liability related to an individual on the vessel, may in-
clude risks other than war risks to the extent the Secretary considers advis-
able. 
‘‘§ 53904. Liability insurance for persons involved in war or 
defense efforts 
‘‘(a) IN GENERAL.—The Secretary of Transportation may provide insur-
ance under this chapter against legal liability that a person may incur in 
providing services or facilities for a vessel if, in the opinion of the Secretary, 
the insurance— 
‘‘(1) is required in prosecuting a war or for national defense; and 
‘‘(2) cannot be obtained at reasonable rates or on reasonable terms and 
conditions from approved companies authorized to do insurance business 
in a State of the United States. 
‘‘(b) LIMITATIONS.—Employer liability insurance and worker compensa-
tion insurance against legal liability to employees may not be provided under 
this section. 
‘‘§ 53905. Agency insurance 
‘‘(a) IN GENERAL.—With the approval of the President, an agency of the 
United States Government may obtain insurance provided for by this chapter 
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 re-
quest of the Secretary of Defense and other agencies the President may pre-
scribe, without payment of an insurance premium if the Secretary of Defense
169 
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 offi-
cial designated by the President) on the agreement shall be treated as the ap-
proval required by section 53902(a) of this title. 
‘‘§ 53906. Hull insurance valuation 
‘‘(a) STATED VALUATION.—The valuation in a hull insurance policy for ac-
tual or constructive total loss of the insured vessel shall be a stated valuation 
determined by the Secretary of Transportation. The stated valuation— 
‘‘(1) shall exclude national defense features paid for by the United 
States Government; and 
‘‘(2) may not exceed the amount that would be payable if the owner-
ship of the vessel had been requisitioned under chapter 563 of this title 
at the time the insurance attached under the policy. 
‘‘(b) REJECTING STATED VALUATION.—Within 60 days after the insurance 
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, premiums 
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 re-
jected the stated valuation determined by the Secretary, the amount of a claim 
adjusted, compromised, settled, adjudged, or paid may not exceed the stated 
valuation. However, if the insured has rejected the valuation, the insured— 
‘‘(1) shall be paid, as a tentative advance only, 75 percent of the stated 
valuation; and 
‘‘(2) may bring a civil action against the Government in a court hav-
ing jurisdiction of the claim to recover a valuation equal to the just com-
pensation the court determines would have been payable if the ownership 
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
170 
reinsurance to a company authorized to do insurance business in a State of 
the United States. The Secretary may obtain reinsurance from such a com-
pany 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 insurance 
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 provides, in an 
amount the Secretary considers reasonable according to good business prac-
tice. The allowance to the company may not include any amount for solic-
iting 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 Sec-
retary is not entitled to the benefit of the additional insurance. 
‘‘§ 53909. War risk insurance revolving fund 
‘‘(a) IN GENERAL.—There is a war risk insurance revolving fund in the 
Treasury. 
‘‘(b) DEPOSITS.—There shall be deposited in the fund amounts appro-
priated to carry out this chapter and amounts received in carrying out this 
chapter. 
‘‘(c) PAYMENTS.—There shall be paid from the fund amounts for return 
premiums, losses, settlements, judgments, and all liabilities incurred by the 
United States Government under this chapter. 
‘‘(d) INVESTMENT.—On request of the Secretary of Transportation, the Sec-
retary of the Treasury may invest or reinvest any part of the fund in securi-
ties of the Government or securities whose principal and interest are guaran-
teed by the Government. Interest and benefits from the securities shall be de-
posited in the fund. 
‘‘§ 53910. Administrative 
‘‘(a) ACCORDANCE WITH COMMERCIAL PRACTICE.—In carrying out this 
chapter, the Secretary of Transportation may act in accordance with commer-
cial 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 prescribe 
and change forms and policies, and fix and change the amounts insured and 
rates of premium, under this chapter.
171 
‘‘(d) ANNUAL FEES.—The Secretary may charge and collect an annual fee 
in an amount calculated to cover the expenses of processing applications for 
insurance, employing underwriting agents, and appointing experts under this 
chapter. 
‘‘(e) PAYMENT OF CLAIMS AND JUDGMENTS.—The Secretary may settle and 
pay claims, and pay judgments against the United States Government, re-
lated 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 do-
mestic companies, authorized to do marine insurance business in a State 
of the United States, to act as underwriting agent for the Secretary. The 
services of an underwriting agent may be used in adjusting claims, but 
a claim may not be paid until approved by the Secretary. 
‘‘(2) COMPENSATION.—The Secretary may allow the company or 
group of companies reasonable compensation for services as the under-
writing agent. The compensation may include an allowance for expenses 
reasonably incurred by the agent, but may not include any amount for 
soliciting or stimulating business. 
‘‘(g) FEES FOR ARRANGING INSURANCE.—Except as provided in subsection 
(f)(2), the Secretary may not pay an insurance broker or other person acting 
in a similar intermediary capacity a fee or other consideration for partici-
pating 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 em-
ployees, may appoint and prescribe the duties of experts in marine insurance 
as the Secretary considers necessary to carry out this chapter. 
‘‘(i) SERVICES OF OTHER GOVERNMENT AGENCIES.—With the consent of 
another Government agency, the Secretary may use information, services, fa-
cilities, officers, and employees of the agency in carrying out this chapter. 
‘‘(j) VESSEL LOCATION REPORTING.—The Secretary may prescribe by regu-
lation vessel location reporting requirements for a vessel insured under this 
chapter. 
‘‘§ 53911. Civil actions for losses 
‘‘(a) IN GENERAL.—If there is a disagreement about a loss insured under 
this chapter, a civil action in admiralty may be brought against the United 
States Government in the district court of the United States for the district 
in which the plaintiff or the plaintiff’s agent resides. If the plaintiff has no 
residence in the United States, the action may be brought in the United 
States District Court for the District of Columbia or in the district court for
172 
any district in which the Attorney General agrees to accept service. Any per-
son who may have an interest in the insurance may be made a party, either 
initially or on the motion of either party. 
‘‘(b) EXCLUSIVE REMEDY.—A civil action against the Government under 
this section is exclusive of any other action by reason of the same subject mat-
ter against an officer, employee, or agent employed or retained by the Govern-
ment under this chapter. 
‘‘(c) PROCEDURE.—A civil action under this section shall be heard and de-
termined 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 Sec-
retary does not act on the claim within 6 months after the claim is filed, un-
less the Secretary for good cause shown agrees with the claimant on a dif-
ferent 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 persons en-
titled to receive payment, the Government may bring a civil action inter-
pleading those persons. The action shall be brought in the United States Dis-
trict 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 Government from further liability to 
all persons. 
‘‘§ 53912. Expiration date 
‘‘The authority of the Secretary of Transportation to provide insurance and 
reinsurance under this chapter expires on June 30, 2005. 
‘‘PART D—PROMOTIONAL PROGRAMS 
‘‘CHAPTER 551—COASTWISE TRADE 
‘‘Sec. 
‘‘55101.
Application of coastwise laws. 
‘‘55102.
Transportation of merchandise. 
‘‘55103.
Transportation of passengers. 
‘‘55104.
Transportation of passengers between Puerto Rico and other ports in the United States. 
‘‘55105.
Transportation of hazardous waste. 
‘‘55106.
Merchandise transferred between barges. 
‘‘55107.
Empty cargo containers and barges. 
‘‘55108.
Platform jackets. 
‘‘55109.
Dredging. 
‘‘55110.
Transportation of dredged material. 
‘‘55111.
Towing. 
‘‘55112.
Vessel escort operations and towing assistance.
173 
‘‘55113.
Use of foreign documented oil spill response vessels. 
‘‘55114.
Unloading fish from foreign vessels. 
‘‘55115.
Supplies on fish processing vessels. 
‘‘55116.
Canadian rail lines. 
‘‘55117.
Great Lakes rail route. 
‘‘55118.
Foreign railroads whose road enters by ferry, tugboat, or towboat. 
‘‘55119.
Yukon River. 
‘‘55120.
Transshipment of imported merchandise intended for immediate exportation. 
‘‘§ 55101. Application of coastwise laws 
‘‘(a) IN GENERAL.—Except as provided in subsection (b), the coastwise 
laws apply to the United States, including the island territories and posses-
sions of the United States. 
‘‘(b) EXCEPTIONS.—The coastwise laws do not apply to— 
‘‘(1) the Virgin Islands until the President declares by proclamation 
that the coastwise laws apply to the Virgin Islands; or 
‘‘(2) American Samoa. 
‘‘§ 55102. Transportation of merchandise 
‘‘(a) DEFINITION.—In this section, the term ‘merchandise’ includes— 
‘‘(1) merchandise owned by the United States Government, a State, or 
a subdivision of a State; and 
‘‘(2) valueless material. 
‘‘(b) REQUIREMENTS.—Except as otherwise provided in this chapter or 
chapter 121 of this title, a vessel may not provide any part of the transpor-
tation of merchandise by water, or by land and water, between points in the 
United States to which the coastwise laws apply, either directly or via a for-
eign 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 Secretary 
of Homeland Security) or the actual cost of the transportation, whichever is 
greater, may be recovered from any person transporting the merchandise or 
causing the merchandise to be transported. 
‘‘§ 55103. Transportation of passengers 
‘‘(a) IN GENERAL.—Except as otherwise provided in this chapter or chap-
ter 121 of this title, a vessel may not transport passengers between ports or 
places in the United States, either directly or via a foreign port, unless the 
vessel— 
‘‘(1) is wholly owned by citizens of the United States for purposes of 
engaging in the coastwise trade; and
174 
‘‘(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 finan-
cial responsibility for indemnification of passengers for nonperformance 
of transportation issued by the Federal Maritime Commission under sec-
tion 44102 of this title. 
‘‘(2) PASSENGER VESSEL.—The term ‘passenger vessel’ means a vessel 
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 pas-
senger vessel qualified to engage in the coastwise trade is offering or ad-
vertising 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 vessel transporting passengers under 
subsection (b) to terminate that transportation within 270 days after the 
Secretary’s notification. Except as provided in subsection (d), the author-
ity to transport passengers under subsection (b) expires at the end of that 
270-day period. 
‘‘(2) WHEN NON-COASTWISE-QUALIFIED VESSEL OFFERING SERVICE.— 
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 Puer-
to 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 terminate that transpor-
tation within 270 days after the Secretary’s notification. Except as pro-
vided in subsection (d), the authority of a foreign vessel to transport pas-
sengers under subsection (b) expires at the end of that 270-day period.
175 
‘‘(d) DELAYING EXPIRATION.—If the vessel offering or advertising the serv-
ice 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 service begins 
that service. 
‘‘(e) REINSTATEMENT OF EXEMPTION.—If the Secretary finds that the serv-
ice on which an expiration was based is no longer available, the expired au-
thority to transport passengers is reinstated. 
‘‘§ 55105. Transportation of hazardous waste 
‘‘(a) IN GENERAL.—The transportation of hazardous waste, as defined in 
section 1004(5) of the Resource Conservation and Recovery Act of 1976 (42 
U.S.C. 6903(5)), from a point in the United States to sea for incineration 
is deemed to be transportation of merchandise under section 55102 of this 
title. 
‘‘(b) NONAPPLICATION TO CERTAIN FOREIGN VESSELS.— 
‘‘(1) IN GENERAL.—Subsection (a) does not apply to transportation 
performed by a foreign-flag ocean incineration vessel owned by or under 
construction on May 1, 1982, for a corporation wholly owned by citizens 
of the United States under section 50501(a)–(c) of this title. 
‘‘(2) STANDARDS FOR INCINERATION EQUIPMENT.—Incineration equip-
ment on a vessel described in paragraph (1) must meet standards of the 
Coast Guard and the Environmental Protection Agency. 
‘‘(3) INSPECTION.—A vessel described in paragraph (1) shall be in-
spected by the Coast Guard, regardless of whether inspected by the flag 
nation. The inspection shall be the same as would be required of a vessel 
of the United States, including drydock inspection and internal exam-
ination of tanks and void spaces. The inspection may be made concur-
rently with an inspection by the flag nation or within one year after 
the initial issuance or next scheduled issuance of the Safety of Life at 
Sea Safety Construction Certificate. In making the inspection, the Coast 
Guard shall refer to the condition of the hull and superstructure estab-
lished by the initial foreign certification as the basis for evaluating the 
current condition of the hull and superstructure. The Coast Guard shall 
allow the substitution of fittings, material, apparatus, equipment, and 
appliances different from those required for vessels of the United States 
if satisfied they are equivalent and at least as effective as those required 
for vessels of the United States. A satisfactory inspection under this 
paragraph shall be certified in writing by the Secretary of the depart-
ment 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.
176 
‘‘§ 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 applica-
tion of section 55102 of this title to the transportation of merchandise that 
is transferred, when moving in the foreign trade of the United States, from 
a barge certified by the owner or operator as designed specifically for carriage 
on a vessel and carried regularly on a vessel in foreign trade, to another such 
barge owned or leased by the same owner or operator. However, this sub-
section does not apply to transportation between the continental 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 Secu-
rity finds, based on information from the Secretary of State, that the govern-
ment of the nation of registry extends reciprocal privileges to vessels of the 
United States. 
‘‘§ 55107. Empty cargo containers and barges 
‘‘(a) IN GENERAL.—Subject to subsections (b) and (c), and on terms and 
conditions the Secretary of Homeland Security may prescribe by regulation, 
section 55102 of this title does not apply to the transportation of— 
‘‘(1) empty cargo vans, empty lift vans, or empty shipping tanks; 
‘‘(2) equipment for use with cargo vans, lift vans, or shipping tanks; 
‘‘(3) empty barges specifically designed for carriage aboard a vessel 
and equipment (except propulsion equipment) for use with those barges; 
‘‘(4) empty instruments for international traffic exempted from the 
customs laws under section 322(a) of the Tariff Act of 1930 (19 U.S.C. 
1322(a)); or 
‘‘(5) stevedoring equipment and material. 
‘‘(b) CONDITIONS.— 
‘‘(1) CLAUSES (1)–(4).—Clauses (1)–(4) of subsection (a) apply only if 
the items named are owned or leased by the owner or operator of the 
vessel and transported for its use in handling its cargo in foreign trade. 
‘‘(2) CLAUSE (5).—Clause (5) of subsection (a) applies only if the 
items named are— 
‘‘(A) owned or leased by the owner or operator of the vessel or 
by the stevedoring company having the contract for the loading or 
unloading of the vessel; and 
‘‘(B) transported without charge for use in the handling of cargo 
in foreign trade. 
‘‘(c) RECIPROCITY REQUIREMENT FOR FOREIGN VESSELS.—This section 
applies to a vessel of foreign registry only if the Secretary of Homeland Secu-
177 
rity finds, based on information from the Secretary of State, that the govern-
ment of the nation of registry extends reciprocal privileges to vessels of the 
United States. 
‘‘§ 55108. Platform jackets 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) COASTWISE QUALIFIED VESSEL.—The term ‘coastwise qualified 
vessel’ means a vessel that has been issued a certificate of documentation 
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 exploration, devel-
opment, or production structure or component thereof, including— 
‘‘(A) platform jackets; 
‘‘(B) tension leg or SPAR platform superstructures (including the 
deck, drilling rig and support utilities, and supporting structure); 
‘‘(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 suitable 
coastwise qualified vessel is not available for use in the transportation 
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 implementing 
this section that are reasonably designed to provide timely information 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—
178 
‘‘(A) describing the project and the platform jacket involved; 
‘‘(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 in-
formation 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 en-
gage 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 purposes 
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 certificate and 
endorsement. 
‘‘(b) DREDGING OF GOLD IN ALASKA.—A documented vessel with a registry 
endorsement may engage in the dredging of gold in Alaska. 
‘‘(c) PENALTY.—If a vessel is operated in knowing violation of this section, 
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 mate-
rial 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—
179 
‘‘(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 another 
point in the United States or on the high seas within the exclusive eco-
nomic zone. 
‘‘(c) PENALTIES.— 
‘‘(1) OWNER AND MASTER.—The owner and master of a vessel towing 
another vessel in violation of this section are each liable for a penalty 
of at least $350 but not more than $1,100. A penalty under this para-
graph 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 tonnage 
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 vessel 
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 op-
erated 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—
180 
‘‘(1) any vessel that is assigned and dedicated to assist another vessel, 
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 similar emer-
gency circumstance, or in restricted waters where additional assistance 
in maneuvering the vessel is required to ensure its safe operation; 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 section 
55111 of this title. 
‘‘(d) PENALTY.—A person violating this section is liable to the Government 
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 vessels 
‘‘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 recov-
ering, transporting, and unloading in a United States port oil discharged 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 recover 
oil from an oil spill in or near those waters in a timely manner, as de-
termined 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 coun-
try under this section. 
‘‘§ 55114. Unloading fish from foreign vessels 
‘‘(a) PROHIBITIONS.—Except as otherwise provided by this section or a 
treaty or convention to which the United States Government is a party, a 
foreign vessel may not unload, in a port of the United States— 
‘‘(1) its catch of fish taken on board on the high seas or fish products 
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 Com-
merce may prescribe regulations the Secretary considers necessary to 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.
181 
‘‘(c) VIRGIN ISLANDS EXEMPTION.—A foreign vessel of not more than 50 
feet overall in length may unload its catch of fresh fish (whole or with the 
heads, viscera, or fins removed, but not frozen, otherwise processed, or further 
advanced) in a port of the Virgin Islands for immediate consumption in those 
islands. Fish unloaded under this subsection may be sold or transferred only 
for immediate consumption. In the absence of satisfactory evidence that a sale 
or transfer to an agent, representative, or employee of a freezer or cannery 
is for immediate consumption, the sale or transfer is deemed not to be for 
immediate consumption. This subsection does not prohibit the freezing, smok-
ing, or other processing of fresh fish by the ultimate consumer of the fish. 
‘‘(d) SEIZURE, FORFEITURE, AND PENALTY.—Fish unloaded in the Virgin 
Islands that are retained, sold, or transferred, except as allowed by subsection 
(c), are liable to seizure by and forfeiture to the Government. A person retain-
ing, selling, transferring, buying, or receiving the fish is liable to the Govern-
ment for a civil penalty of not more than $1,000 for each violation. A penalty 
or forfeiture under this section may be compromised, modified, or remitted 
under section 2107(b) of this title. 
‘‘§ 55115. Supplies on fish processing vessels 
‘‘Section 55102 of this title does not apply to supplies aboard a United 
States documented fish processing vessel that are necessary and used for proc-
essing or assembling fishery products aboard such a vessel. 
‘‘§ 55116. Canadian rail lines 
‘‘Section 55102 of this title does not apply to the transportation of mer-
chandise between points in the continental United States, including Alaska, 
over through routes in part over Canadian rail lines and connecting water 
facilities if the routes have been recognized by the Surface Transportation 
Board and rate tariffs for the routes have been filed with the Board. 
‘‘§ 55117. Great Lakes rail route 
‘‘Section 55102 of this title does not apply to the transportation of mer-
chandise loaded on a railroad car or to a motor vehicle with or without a 
trailer, and with its passengers or contents when accompanied by the oper-
ator, when the railroad car or motor vehicle is transported in a railroad car 
ferry operated between fixed terminals on the Great Lakes as part of a rail 
route, if— 
‘‘(1) the car ferry is owned by a common carrier by water and oper-
ated as part of a rail route with the approval of the Surface Transpor-
tation Board; 
‘‘(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;
182 
‘‘(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 carrier 
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, tugboat, 
or towboat, may own and operate a vessel not having a coastwise endorsement 
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. How-
ever, 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 authorized 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 traffic. 
‘‘§ 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 commerce 
is secured by treaty to the citizens of the United States and the subjects of 
a foreign power. 
‘‘CHAPTER 553—PASSENGER AND CARGO PREFERENCES 
‘‘SUBCHAPTER I—GENERAL 
‘‘Sec. 
‘‘55301.
Priority loading for coal. 
‘‘55302.
Transportation of United States Government personnel. 
‘‘55303.
Motor vehicles owned by United States Government personnel. 
‘‘55304.
Exports financed by the United States Government. 
‘‘55305.
Cargoes procured, furnished, or financed by the United States Government. 
‘‘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.
183 
‘‘55316.
Financing the transportation of agricultural commodities. 
‘‘55317.
Termination of subchapter. 
‘‘55318.
Effect on other law. 
‘‘SUBCHAPTER III—AMERICAN GREAT LAKES VESSELS 
‘‘55331.
Definitions. 
‘‘55332.
Designating American Great Lakes vessels. 
‘‘55333.
Exemption from restriction on transporting certain cargo. 
‘‘55334.
Restrictions on operations. 
‘‘55335.
Revocations and terminations of designations. 
‘‘55336.
Civil penalty. 
‘‘SUBCHAPTER I—GENERAL 
‘‘§ 55301. Priority loading for coal 
‘‘A vessel engaged in the coastwise transportation of coal produced in the 
United States, from a port in the United States to another port in the United 
States, shall be given priority in loading at any of those ports ahead of a 
waiting vessel engaged in the export transportation of coal produced in the 
United States. However, if the Secretary of Transportation finds that it is 
in the national interest, the Secretary may eliminate this priority loading 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 prescribe 
regulations under which agencies may not pay for or reimburse an officer or 
employee for travel or transportation expenses incurred on a foreign vessel in 
the absence of satisfactory proof of the necessity of using the vessel. 
‘‘§ 55303. Motor vehicles owned by United States Government 
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 Government 
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 instrumentality that
184 
vessels of the United States are not available in sufficient number, in suffi-
cient tonnage capacity, on necessary schedules, or at reasonable rates. 
‘‘§ 55305. Cargoes procured, furnished, or financed by the 
United States Government 
‘‘(a) DEFINITION.—In this section, the term ‘privately-owned United 
States-flag commercial vessel’ does not include a vessel that, after 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 procures, 
contracts for, or otherwise obtains for its own account, or furnishes to or for 
the account of a foreign country without provision for reimbursement, any 
equipment, materials, or commodities, within or without the United States, 
or advances funds or credits, or guarantees the convertibility of foreign cur-
rencies in connection with the furnishing of the equipment, materials, or com-
modities, the appropriate agencies shall take steps necessary and practicable 
to ensure that at least 50 percent of the gross tonnage of the equipment, mate-
rials, or commodities (computed separately for dry bulk carriers, dry cargo 
liners, and tankers) which may be transported on ocean vessels is transported 
on privately-owned United States-flag commercial vessels, to the extent those 
vessels are available at fair and reasonable rates for United States-flag com-
mercial vessels, in a manner that will ensure a fair and reasonable participa-
tion of United States-flag commercial vessels in those cargoes by geographic 
areas. 
‘‘(c) WAIVERS.—The President, the Secretary of Defense, or Congress (by 
concurrent resolution or otherwise) may waive this section temporarily by— 
‘‘(1) declaring the existence of an emergency justifying a waiver; and 
‘‘(2) notifying the appropriate agencies of the waiver. 
‘‘(d) PROGRAMS OF OTHER AGENCIES.—An agency having responsibility 
under this section shall administer its programs with respect to this section 
under regulations prescribed by the Secretary of Transportation. The Sec-
retary shall review the administration of those programs and report annually 
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;
185 
‘‘(2) both industries must compete in international markets increas-
ingly dominated by foreign trade barriers and the subsidization practices 
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 effec-
tively, by clarifying the ocean transportation requirements applicable to 
those programs; 
‘‘(2) take immediate and positive steps to promote the growth of the 
cargo-carrying capacity of the United States merchant marine; 
‘‘(3) expand international trade in United States agricultural com-
modities and products and develop, maintain, and expand markets for 
United States agricultural exports; 
‘‘(4) improve the efficiency of administration of both the commodity 
purchasing and selling activities and the ocean transportation activities 
associated with export programs sponsored by the Secretary; 
‘‘(5) stimulate and promote the agricultural and maritime industries 
of the United States and encourage cooperative efforts by both industries 
to address their common problems; and 
‘‘(6) provide for the appropriate disposition of these findings and pur-
poses. 
‘‘§ 55312. Determining prevailing world market price 
‘‘(a) AGRICULTURAL COMMODITIES AND PRODUCTS.—The prevailing world 
market price for agricultural commodities or their products shall be deter-
mined under this subchapter under procedures prescribed by the Secretary of 
Agriculture. The Secretary shall prescribe the procedures by regulation, with 
notice and opportunity for public comment under section 553 of title 5. 
‘‘(b) SERVICES AND NON-AGRICULTURAL COMMODITIES AND PRODUCTS.— 
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 Agriculture in con-
sultation 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—
186 
‘‘(1) agricultural commodities or their products acquired by the Cor-
poration are made available to United States exporters, users, processors, 
or foreign purchasers for the purpose of developing, maintaining, or ex-
panding export markets for United States agricultural commodities or 
their products at prevailing world market prices; 
‘‘(2) payments are made available to United States exporters, users, 
or processors or, except as provided in section 55314 of this title, cash 
grants are made available to foreign purchasers, for the purpose de-
scribed in clause (1); 
‘‘(3) commercial credit guarantees are blended with direct credits from 
the Corporation to reduce the effective rate of interest on export sales of 
United States agricultural commodities or their products; 
‘‘(4) credit or credit guarantees for not more than 3 years are extended 
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 mate-
rials, goods, equipment, or services at least equal in value to the agricul-
tural commodities or their products for which they are exchanged or 
bartered (determined on the basis of prevailing world market prices at 
the time of the exchange or barter), but this clause does not exempt from 
the cargo preference provisions referred to in section 55314(b) of this title 
any requirement otherwise applicable to the materials, goods, equipment, 
or services imported under the transaction. 
‘‘§ 55314. Transportation requirements for certain exports 
sponsored by the Secretary of Agriculture 
‘‘(a) MINIMUM TONNAGE.— 
‘‘(1) IN
GENERAL.—In addition to the requirement under section 
55305 of this title for the transportation of a percentage of gross tonnage 
on United States-flag vessels, 25 percent of the gross tonnage of agricul-
tural commodities or their products specified in subsection (b) shall be 
transported each calendar year on United States-flag commercial vessels 
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 admin-
istration 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.
187 
‘‘(b) APPLICABLE EXPORT ACTIVITY.—This section applies to export activ-
ity (except inspection or weighing activities, other activities carried out for 
health or safety, or technical assistance provided in the handling of commer-
cial transactions) of the Secretary of Agriculture or the Commodity Credit 
Corporation— 
‘‘(1) carried out under the Agricultural Trade Development and As-
sistance Act of 1954 (7 U.S.C. 1691 et seq.); 
‘‘(2) carried out under section 416 of the Agricultural Act of 1949 (7 
U.S.C. 1431); 
‘‘(3) carried out under the Bill Emerson Humanitarian Trust Act (7 
U.S.C. 1736f–1); 
‘‘(4) under which agricultural commodities or their products are— 
‘‘(A) donated through foreign governments or private or public 
agencies, including intergovernmental organizations; or 
‘‘(B) sold for foreign currencies or for dollars on credit terms of 
more than 10 years; 
‘‘(5) under which agricultural commodities or their products are made 
available for emergency food relief at less than prevailing world market 
prices; 
‘‘(6) under which a cash grant is made directly or through an inter-
mediary to a foreign purchaser to enable the purchaser to obtain United 
States agricultural commodities or their products in an amount greater 
than the difference between the prevailing world market price and the 
United States market price, free along side vessel at a United States 
port; or 
‘‘(7) under which agricultural commodities owned or controlled by or 
under loan from the Corporation are exchanged or bartered for materials, 
goods, equipment, or services produced in foreign countries, except export 
activities described in section 55313(5) of this title. 
‘‘(c) ADDITIONAL REQUIREMENTS.— 
‘‘(1) APPLICATION OF SECTION 55305.—The requirement for United 
States-flag transportation under subsection (a) is subject to the same 
terms and conditions as provided in section 55305 of this title. 
‘‘(2) ALLOCATION OF COMMODITIES.—Subject to paragraph (3), in 
carrying out this section and section 55305 of this title, the Corporation 
shall take steps necessary and practicable, and consistent with this sec-
tion and section 55305, without detriment to any port range to allocate, 
on the principle of lowest landed cost without regard to the country of 
documentation of the vessel, 25 percent of the bagged, processed, or for-
tified commodities provided under title II of the Agricultural Trade De-
velopment and Assistance Act of 1954 (7 U.S.C. 1721 et seq.).
188 
‘‘(3) CALCULATIONS.—In carrying out paragraph (2), first there shall 
be calculated the allocation of 100 percent of the quantity to be procured 
on an overall lowest landed cost basis without regard to the country of 
documentation of the vessel, and then there shall be allocated to the Great 
Lakes port range any cargoes for which it has the lowest landed cost 
under that calculation. The requirements for United States-flag transpor-
tation under this section and section 55305 of this title do not apply to 
commodities allocated to the Great Lakes port range under paragraph 
(2). To the extent that the Great Lakes port range is used to furnish and 
transport less than 25 percent of the total annual tonnage of commodities 
to which paragraph (2) applies, the commodities allocated to the Great 
Lakes port range under paragraph (2) may not be reallocated or diverted 
to another port range to meet the requirements for United States-flag 
transportation under this section and section 55305 of this title. 
‘‘(4) AWARDING CONTRACTS.—In awarding a contract for the trans-
portation by vessel of commodities from the Great Lakes port range pur-
suant to an export activity referred to in subsection (b), an agency— 
‘‘(A) shall consider expressions of freight interest for any vessel 
from a vessel operator who meets reasonable requirements for finan-
cial 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 otherwise 
satisfies reasonable requirements for financial and operational in-
tegrity. 
‘‘(5) NONAVAILABILITY OF VESSELS.—A determination of nonavail-
ability of United States-flag vessels resulting from the application of this 
subsection may not reduce the gross tonnage of commodities required by 
this section and section 55305 of this title to be transported on United 
States-flag vessels. 
‘‘§ 55315. Minimum tonnage 
‘‘(a) DEFINITION.—In this section, the term ‘base period’ means the 5-year 
period running from the sixth through the second prior fiscal years. 
‘‘(b) REQUIREMENT.—For each fiscal year, the minimum quantity of agri-
cultural commodities to be exported under programs subject to section 55314 
of this title is the average of the tonnage exported under those programs dur-
ing the base period, discarding the high and low years. 
‘‘(c) WAIVERS.—The President may waive the minimum quantity for a fis-
cal year under this section if the President determines and reports to Con-
189 
gress, together with reasons, that the quantity cannot be used effectively for 
the purposes of those programs or, based on a certification by the Secretary 
of Agriculture, that the commodities are not available for reasons that include 
the unavailability of funds. 
‘‘§ 55316. Financing the transportation of agricultural com-
modities 
‘‘(a) FINANCING OF INCREASED CHARGES.—The Secretary of Transpor-
tation shall finance any increased ocean freight charges incurred in any fiscal 
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 differential 
for which obligations are incurred by the Secretary of Agriculture 
and the Corporation on exports of agricultural commodities and 
their products under the agricultural export programs specified 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 differential 
on which obligations are incurred by the Secretary of Agriculture 
and the Corporation during that fiscal year. 
‘‘(2) COMMODITIES SHIPPED FROM INVENTORY.—For purposes of this 
subsection, commodities shipped from the inventory of the Corporation 
shall be valued as provided in section 412(d) of the Agricultural 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 obli-
gations to the Secretary of the Treasury. The Secretary of Transpor-
tation, with the approval of the Secretary of the Treasury, shall prescribe 
the form, denomination, maturity, and other terms (except the interest 
rate) of the obligations. The Secretary of the Treasury shall set the inter-
est rate for the obligations, considering the average market yield on out-
standing marketable obligations of the United States Government of com-
parable maturities during the month before the obligations are issued. 
‘‘(2) PURCHASE.—The Secretary of the Treasury shall purchase the ob-
ligations issued under this subsection. To purchase the obligations, the 
Secretary of the Treasury may use as a public debt transaction the pro-
ceeds from the sale of securities issued under chapter 31 of title 31. The 
purposes for which securities may be issued under that chapter are ex-
190 
tended to include the purchase of obligations under this subsection. A re-
demption 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 ap-
propriated an amount sufficient to reimburse the Secretary of Transpor-
tation for the costs incurred under this section, including administrative 
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 Con-
gress 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 notification 
is made under section 55316(f) of this title, except for shipments of agricul-
tural commodities and their products subject to contracts made before the end 
of that 90-day period, unless within that 90-day period the Secretary of 
Transportation proclaims that funds are available to finance increased freight 
charges resulting from the requirements of sections 55314(a) and 55316(a) 
and (b) of this title. On the termination of this subchapter under this sec-
tion— 
‘‘(1) this subchapter does not exempt export activities from, or subject 
export activities to, the cargo preference laws; and 
‘‘(2) the 50-percent requirement in section 55305 of this title remains 
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:
191 
‘‘(1) AMERICAN GREAT LAKES VESSEL.—The term ‘American Great 
Lakes vessel’ means a vessel so designated under section 55332 of this 
title, but only during the period the designation is in effect. 
‘‘(2) GREAT LAKES.—The term ‘Great Lakes’ means Lake Superior, 
Lake Michigan, Lake Huron, Lake Erie, Lake Ontario, the Saint Law-
rence River west of Saint Regis, New York, and their connecting and 
tributary waters. 
‘‘(3) GREAT LAKES SHIPPING SEASON.—The term ‘Great Lakes ship-
ping season’ means the period each year during which the Saint Law-
rence 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 designa-
tion 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 PROHIBITED.— 
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
192 
‘‘(2) selling the vessel to a person not a citizen of the United States. 
‘‘(d) REGULATIONS.—The Secretary shall prescribe regulations establishing 
requirements for submitting applications under this section. 
‘‘§ 55333. Exemption from restriction on transporting certain 
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 dur-
ing 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 fre-
quent 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 ship-
ping 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 Amer-
ican 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 operators of 
United States-flag vessels.
193 
‘‘§ 55336. Civil penalty 
‘‘After notice and an opportunity for a hearing, the Secretary of Transpor-
tation 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 designation 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 deter-
mines 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 Presi-
dent may use, in addition to amounts appropriated to carry out trade pro-
motion 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, sec-
tion 12119 of this title, or section 611 of the Merchant Marine Act, 1936, 
a person may not, without the approval of the Secretary of Transpor-
tation— 
‘‘(A) sell, lease, charter, deliver, or in any other manner transfer, 
or agree to sell, lease, charter, deliver, or in any other manner
194 
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 authority 
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 proc-
essing vessel, or fish tender vessel (as defined in section 2101 of this 
title). 
‘‘(b) APPROVAL BEFORE DOCUMENTATION.—To promote financing with re-
spect to a vessel to be documented under chapter 121 of this title, the Sec-
retary 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 reg-
istry 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 ap-
propriate, 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 transfer 
of a vessel, or of an interest in or control of a vessel, in violation of this sec-
tion 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 ves-
sel, or an interest in or control of a vessel, in violation of this section
195 
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 inter-
est 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 Sec-
retary of Transportation— 
‘‘(1) place under foreign registry or flag a vessel owned in whole or 
in part by a citizen of the United States or a corporation incorporated 
under the laws of the United States or of a State; 
‘‘(2) sell, mortgage, lease, charter, deliver, or in any other manner 
transfer, or agree to sell, mortgage, lease, charter, deliver, or in any other 
manner transfer, to a person not a citizen of the United States— 
‘‘(A) a vessel owned as described in clause (1), or an interest 
therein; 
‘‘(B) a vessel documented under the laws of the United States, or 
an interest therein; or 
‘‘(C) a facility for building or repairing vessels, or an interest 
therein; 
‘‘(3) issue, assign, or transfer to a person not a citizen of the United 
States an instrument of indebtedness secured by a mortgage of a vessel 
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 vested 
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
196 
‘‘(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 substitute 
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 trust-
ee 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 approved 
as a trustee by the Secretary, may not operate the vessel under the mort-
gage 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 security, 
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.—
197 
‘‘(1) CRIMINAL PENALTY.—A person that violates, or attempts or con-
spires to violate, this section shall be fined under title 18, imprisoned 
for not more than 5 years, or both. 
‘‘(2) FORFEITURE.—The following shall be forfeited to the Government: 
‘‘(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 abso-
lutely or upon conditions the Secretary considers advisable. The Secretary 
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 required 
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 De-
partment of Transportation, to obtain the Secretary’s approval under section 
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 evi-
dence 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.
198 
‘‘§ 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 construc-
tion 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 requisition 
or as soon thereafter as the situation allows, shall offer the person entitled 
to possession of the vessel a charter containing— 
‘‘(1) the terms the Secretary believes should govern the relationship be-
tween 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 Transportation 
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 deter-
mined 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 previously 
paid for by the United States Government shall be excluded. 
‘‘(d) LOSS OR DAMAGE DURING CHARTER.—If a vessel is lost or damaged 
by a risk assumed by the Government under the charter, but a valuation for 
the vessel or a means of compensation has not been agreed to, the Secretary 
shall pay just compensation for the loss or damage, to the extent the person 
is not reimbursed through insurance. 
‘‘§ 56304. Disputed compensation 
‘‘If the person entitled to compensation disputes the amount of just com-
pensation determined by the Secretary of Transportation under this chapter, 
the Secretary shall pay the person, as a tentative advance, 75 percent of the
199 
amount determined. The person may bring a civil action against the United 
States Government to recover just compensation. If the tentative advance paid 
under this section is greater than the amount of the court’s judgment, the per-
son 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 Trans-
portation may deposit part of the compensation or advance of compensa-
tion to be paid under this chapter (but not more than the total amount 
of all encumbrances) in a fund in the Treasury. The Secretary shall pub-
lish 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 encum-
brances (including encumbrances stipulated to in a court of the United 
States or a State) existing at the time the vessel was requisitioned. 
‘‘(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 per-
sons 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 practice 
applicable in like cases between private parties. 
‘‘§ 56306. Use and transfer of vessels 
‘‘(a) IN GENERAL.—The Secretary of Transportation may repair, recondi-
tion, reconstruct, operate, or charter for operation, a vessel acquired under 
this chapter.
200 
‘‘(b) TRANSFER TO OTHER AGENCIES.—The Secretary may transfer the 
possession or control of a vessel acquired under this chapter to another depart-
ment or agency of the United States Government on terms and conditions ap-
proved 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 Gov-
ernment; 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 es-
sential 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 oper-
ated, is not— 
‘‘(A) lawful under the Neutrality Act of 1939 (22 U.S.C. 441 et 
seq.) or a proclamation issued under that Act; or 
‘‘(B) compatible with maintaining the availability of the vessel 
for national defense and commerce; 
‘‘(2) it is not feasible under existing law to employ the vessel in any 
other service or operation in foreign or domestic trade (except temporary 
or emergency operation under section 56503(b)(5) of this title); and
201 
‘‘(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 national 
defense under clause (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 subsection 
(a) shall continue in effect only as long as the circumstances described in sub-
section (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 con-
tract or mortgage or other agreement; and 
‘‘(2) the right to operating-differential subsidy for the vessel. 
‘‘(b) DISCRETIONARY ADJUSTMENTS AND ARRANGEMENTS.—To the extent 
the Secretary of Transportation considers appropriate to carry out the pur-
poses 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 obligations 
to the United States Government for the vessel (regardless of whether the 
maturity date is during a lay-up period), or rearrangement of those ma-
turities. 
‘‘(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 provi-
sions of this subtitle based on a 20-year life. 
‘‘(5) Provision for temporary or emergency employment of the vessel 
(instead of lay-up) as may be practicable, with such arrangements for 
management of the vessel, payment of expenses, and application of the 
proceeds of the employment, as the Secretary may approve, with any pe-
riod 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
202 
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 applicant 
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 Transportation. 
‘‘§ 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 subsection 
(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 com-
mercial or military operation to warrant its further preservation, the Sec-
retary may scrap the vessel or sell the vessel for cash. 
‘‘(b) SELLING PROCEDURE.—The sale of a vessel under subsection (a) shall 
be made on the basis of competitive sealed bids, after an appraisal and due 
advertisement. The purchaser does not have to be a citizen of the United 
States. The purchaser shall provide a surety bond, with a surety approved 
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 com-
petition with a vessel owned by a citizen of the United States and documented 
under the laws of the United States.
203 
‘‘§ 57103. Sale of obsolete vessels in National Defense Reserve 
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 Na-
tional Defense Reserve Fleet that has been identified by the Secretary as an 
obsolete vessel of insufficient value to warrant its further preservation, 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 commercial 
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 in-
tended use of the vessel, each of which has been submitted to and ap-
proved by the Secretary; 
‘‘(6) has provided proof, as determined by the Secretary, of resources 
sufficient to accomplish the transfer, necessary repairs and modifica-
tions, and initiation of the intended use of the vessel; and 
‘‘(7) agrees that when the recipient no longer requires the vessel for 
use as described in the business plan required under clause (5)— 
‘‘(A) the recipient will, at the discretion of the Secretary, re-
convey the vessel to the Government in good condition except for or-
dinary wear and tear; or 
‘‘(B) if the Board of Trustees of the recipient has decided to dis-
solve the recipient according to the laws of the State in which the 
recipient is incorporated, then— 
‘‘(i) the recipient shall distribute the vessel, as an asset of 
the recipient, to a person that has been determined exempt 
from taxation under section 501(c)(3) of the Internal Revenue 
Code of 1986 (26 U.S.C. 501(c)(3)), or to the Federal Govern-
ment or a State or local government for a public purpose; and 
‘‘(ii) the vessel shall be disposed of by a court of competent 
jurisdiction of the county in which the principal office of the 
recipient is located, for such purposes as the court shall deter-
mine, or to such organizations as the court shall determine are 
organized exclusively for public purposes.
204 
‘‘(b) OTHER EQUIPMENT.—At the Secretary’s discretion, additional equip-
ment from other obsolete vessels of the Fleet may be conveyed to assist the re-
cipient with maintenance, repairs, or modifications. 
‘‘(c) ADDITIONAL TERMS.—The Secretary may require any additional 
terms the Secretary considers appropriate. 
‘‘(d) DELIVERY OF VESSEL.—If conveyance is made under this section, the 
vessel shall be delivered to the recipient at a time and place to be determined 
by the Secretary. The vessel shall be conveyed in an ‘as is’ condition. 
‘‘(e) LIMITATIONS.—If at any time prior to delivery of the vessel to the re-
cipient, the Secretary determines that a different disposition of the vessel 
would better serve the interests of the Government, the Secretary shall pursue 
the more favorable disposition of the obsolete vessel and shall not be liable for 
any damages that may result from an intended recipient’s reliance upon a 
proposed transfer. 
‘‘(f) REVERSION.—The Secretary shall include in any conveyance under 
this section terms under which all right, title, and interest conveyed by the 
Secretary shall revert to the Government if the Secretary determines the vessel 
has been used other than as described in the business plan required under sub-
section (a)(5). 
‘‘§ 57104. Acquisition of vessels from sale of obsolete vessels 
‘‘(a) IN GENERAL.—The Secretary of Transportation may acquire suitable 
documented vessels with amounts in the Vessel Operations Revolving Fund de-
rived from the sale of obsolete vessels in the National Defense Reserve Fleet. 
‘‘(b) VALUATION.—The acquired and obsolete vessels shall be valued at their 
scrap value in domestic or foreign markets as of the date of the acquisition 
for or sale from the Fleet. However, the value assigned to those vessels shall 
be determined on the same basis, with consideration given to the fair value 
of the cost of moving the vessel sold from the Fleet to the place of scrapping. 
‘‘(c) COSTS INCIDENT TO LAY-UP.—Costs incident to the lay-up of the ves-
sel acquired under this section may be paid from amounts in the Fund. 
‘‘(d) TRANSFERS TO NON-CITIZENS.—A vessel sold from the Fleet under 
this section may be scrapped in an approved foreign market without obtain-
ing additional separate approval from the Secretary to transfer the vessel to 
a person not a citizen of the United States. 
‘‘§ 57105. Acquisition of vessels for essential services, routes, 
or lines 
‘‘(a) IN GENERAL.—The Secretary of Transportation may acquire a vessel, 
by purchase or otherwise, if— 
‘‘(1) the Secretary considers the vessel necessary to establish, maintain, 
improve, or serve as a replacement on an essential service, route, or line
205 
in the foreign commerce of the United States, as determined under sec-
tion 50103 of this title; 
‘‘(2) the vessel was constructed in the United States; and 
‘‘(3) the Secretary of the Navy has certified to the Secretary of Trans-
portation that the vessel is suitable for economical and speedy conversion 
into a naval or military auxiliary or otherwise suitable for use by the 
United States Government in time of war or national emergency. 
‘‘(b) PRICE.—The price paid for the vessel shall be based on a fair and rea-
sonable valuation. However, the price may not exceed by more than 5 percent 
the cost of the vessel to the owner (excluding any construction-differential sub-
sidy and the cost of national defense features paid by the Secretary of Trans-
portation) plus the actual cost previously expended for reconditioning, less de-
preciation based on a 25-year life for a dry-cargo or passenger vessel and a 
20-year life for a tanker or other liquid bulk carrier vessel. 
‘‘(c) DOCUMENTATION.—A vessel acquired under this section that is not 
documented under the laws of the United States at the time of acquisition 
shall be so documented as soon as practicable. 
‘‘§ 57106. Maintenance, improvement, and operation of ves-
sels 
‘‘(a) IN GENERAL.—The Secretary of Transportation may maintain, re-
pair, recondition, remodel, and improve vessels owned by the United States 
Government and in the possession or under the control of the Secretary, to 
equip them adequately for competition in the foreign trade of the United 
States. The Secretary may operate such a vessel or charter the vessel on terms 
and conditions the Secretary considers appropriate to carry out the purposes 
of this subtitle. 
‘‘(b) DOCUMENTATION AND RESTRICTIONS ON OPERATION.—A vessel recon-
ditioned, remodeled, or improved under subsection (a) shall be documented 
under the laws of the United States and remain so documented for at least 
5 years after completion of the reconditioning, remodeling, or improvement. 
During that period, it shall be operated on voyages that are not exclusively 
coastwise. 
‘‘§ 57107. Vessels for other agencies 
‘‘(a) IN GENERAL.—The Secretary of Transportation may construct, recon-
struct, repair, equip, and outfit, by contract or otherwise, vessels or parts 
thereof, for any other department or agency of the United States Government 
to the extent the other department or agency is authorized by law to do so 
for its own account. 
‘‘(b) EFFECT ON CONTRACT AUTHORIZATION.—An obligation incurred or 
expenditure made by the Secretary under this section does not affect any con-
206 
tract authorization of the Secretary, but instead shall be charged against the 
existing appropriation or contract authorization of the department or agency. 
‘‘§ 57108. Consideration of ballast and equipment in deter-
mining selling price 
‘‘The Maritime Administration may not sell a vessel until its ballast and 
equipment have been inventoried and their value considered in determining 
the selling price of the vessel. 
‘‘§ 57109. Operation of vessels purchased, chartered, or 
leased from Secretary of Transportation 
‘‘Unless otherwise authorized by the Secretary of Transportation, a vessel 
purchased, chartered, or leased from the Secretary may be operated only 
under a certificate of documentation with a registry or coastwise endorsement. 
Such a vessel, while employed solely as a merchant vessel, is subject to the 
laws, regulations, and liabilities governing merchant vessels, whether the 
United States Government has an interest in the vessel as an owner or holds 
a mortgage, lien, or other interest. 
‘‘CHAPTER 573—VESSEL TRADE-IN PROGRAM 
‘‘Sec. 
‘‘57301.
Definitions. 
‘‘57302.
Authority to acquire vessels. 
‘‘57303.
Utility value and tonnage requirements. 
‘‘57304.
Eligible acquisition dates. 
‘‘57305.
Determination of trade-in allowance. 
‘‘57306.
Payment of trade-in allowance. 
‘‘57307.
Recognition of gain for tax purposes. 
‘‘57308.
Use of vessels at least 25 years old. 
‘‘§ 57301. Definitions 
‘‘In this chapter: 
‘‘(1) NEW VESSEL.—The term ‘new vessel’ means a vessel— 
‘‘(A) constructed under this subtitle and acquired within 2 years 
after the date of completion; or 
‘‘(B) constructed in a domestic shipyard on private account and 
not under this subtitle, and documented under the laws of the 
United States. 
‘‘(2) OBSOLETE VESSEL.—The term ‘obsolete vessel’ means a vessel 
that— 
‘‘(A) is of at least 1,350 gross tons; 
‘‘(B) the Secretary of Transportation believes should, because of 
its age, obsolescence, or other reasons, be replaced in the public in-
terest; and 
‘‘(C) has been owned by a citizen of the United States for at least 
3 years immediately before its acquisition under this chapter.
207 
‘‘§ 57302. Authority to acquire vessels 
‘‘To promote the construction of new, safe, and efficient vessels to carry the 
domestic and foreign waterborne commerce of the United States, the Secretary 
of Transportation may acquire an obsolete vessel in exchange for an allowance 
of credit toward the cost of construction or purchase of a new vessel as pro-
vided in this chapter. 
‘‘§ 57303. Utility value and tonnage requirements 
‘‘(a) UTILITY VALUE.—The utility value of a new vessel to be acquired 
under this chapter for operation in the domestic or foreign commerce of the 
United States may not be substantially less than that of the obsolete vessel 
acquired in exchange under this chapter. 
‘‘(b) TONNAGE.—If the Secretary of Transportation finds that the new ves-
sel will have a utility value at least equal to that of the obsolete vessel, the 
new vessel may be of lesser gross tonnage than the obsolete vessel. However, 
the gross tonnage of the new vessel must be at least one-third the gross tonnage 
of the obsolete vessel. 
‘‘§ 57304. Eligible acquisition dates 
‘‘At the option of the owner, the acquisition of an obsolete vessel under this 
chapter shall occur— 
‘‘(1) when the owner contracts for the construction or purchase of a 
new vessel; or 
‘‘(2) within 5 days of the actual date of delivery of the new vessel to 
the owner. 
‘‘§ 57305. Determination of trade-in allowance 
‘‘(a) IN GENERAL.—The Secretary of Transportation shall determine the 
trade-in allowance for an obsolete vessel at the time of acquisition of the ves-
sel. The allowance shall be the fair value of the vessel. In determining the 
value, the Secretary shall consider— 
‘‘(1) the scrap value of the obsolete vessel in American and foreign 
markets; 
‘‘(2) the depreciated value based on a 20-year or 25-year life, which-
ever applies to the obsolete vessel; and 
‘‘(3) the market value of the obsolete vessel for operation in world com-
merce or in the domestic or foreign commerce of the United States. 
‘‘(b) USE OF OBSOLETE VESSELS.—If acquisition of the obsolete vessel oc-
curs when the owner contracts for the construction of the new vessel, and the 
owner uses the obsolete vessel during the period of construction of the new ves-
sel, the Secretary shall reduce the trade-in allowance by an amount rep-
resenting the fair value of that use. The Secretary shall establish the rate for 
use of the obsolete vessel when the contract for construction of the new vessel 
is made.
208 
‘‘§ 57306. Payment of trade-in allowance 
‘‘(a) ACQUISITION AT TIME OF CONTRACT.—If acquisition of an obsolete 
vessel under this chapter occurs when the owner contracts for the construction 
or purchase of the new vessel, the Secretary of Transportation shall apply the 
trade-in allowance to the purchase price of the new vessel rather than paying 
it to the owner. If the new vessel is constructed under this subtitle, the Sec-
retary may apply the trade-in allowance to the required cash payments on 
terms and conditions the Secretary may prescribe. If the new vessel is not 
constructed under this subtitle, the Secretary shall pay the trade-in allowance 
to the builder of the vessel for the account of the owner when the Secretary 
acquires the obsolete vessel. 
‘‘(b) ACQUISITION AT TIME OF DELIVERY.—If acquisition of the obsolete 
vessel occurs when the new vessel is delivered to the owner, the Secretary shall 
deposit the trade-in allowance in the owner’s capital construction fund. 
‘‘§ 57307. Recognition of gain for tax purposes 
‘‘The owner of an obsolete vessel does not recognize a gain under the Federal 
income tax laws when the vessel is transferred to the Secretary of Transpor-
tation in exchange for a trade-in allowance under this chapter. The basis of 
the new vessel acquired with the allowance is the same as the basis of the obso-
lete vessel— 
‘‘(1) increased by the difference between the cost of the new vessel and 
the trade-in allowance of the obsolete vessel; and 
‘‘(2) decreased by the amount of loss recognized on the transfer. 
‘‘§ 57308. Use of vessels at least 25 years old 
‘‘An obsolete vessel acquired under this chapter that is or becomes at least 
25 years old may not be used for commercial operation. However, the vessel 
may be used— 
‘‘(1) during a period in which vessels may be requisitioned under 
chapter 563 of this title; or 
‘‘(2) except as otherwise provided in this subtitle, on trade routes serv-
ing only the foreign trade of the United States. 
‘‘CHAPTER 575—CONSTRUCTION, CHARTER, AND SALE 
OF VESSELS 
‘‘SUBCHAPTER I—GENERAL 
‘‘Sec. 
‘‘57501.
Completion of long-range program. 
‘‘57502.
Construction, reconditioning, and remodeling of vessels. 
‘‘57503.
Competitive bidding. 
‘‘57504.
Charter or sale of vessels acquired by Department of Transportation. 
‘‘57505.
Employment of vessels on foreign trade routes. 
‘‘57506.
Minimum selling price of vessels. 
‘‘SUBCHAPTER II—CHARTERS 
‘‘57511.
Demise charters. 
‘‘57512.
Competitive bidding. 
‘‘57513.
Minimum bid.
209 
‘‘57514.
Qualifications of bidders. 
‘‘57515.
Awarding of charters. 
‘‘57516.
Operating-differential subsidies. 
‘‘57517.
Recovery of excess profits. 
‘‘57518.
Performance bond. 
‘‘57519.
Insurance. 
‘‘57520.
Vessel maintenance. 
‘‘57521.
Termination of charter during national emergency. 
‘‘SUBCHAPTER III—MISCELLANEOUS 
‘‘57531.
Construction and charter of vessels for unsuccessful routes. 
‘‘57532.
Operation of experimental vessels. 
‘‘SUBCHAPTER I—GENERAL 
‘‘§ 57501. Completion of long-range program 
‘‘Whenever the Secretary of Transportation determines that the objectives 
and policies declared in sections 50101 and 50102 of this title cannot be fully 
realized within a reasonable time under titles V and VI of the Merchant Ma-
rine Act, 1936, and the President approves the determination, the Secretary, 
in accordance with this chapter, shall complete the long-range program de-
scribed in section 50102 of this title. 
‘‘§ 57502. Construction, reconditioning, and remodeling of 
vessels 
‘‘(a) IN GENERAL.—The Secretary of Transportation may have new vessels 
constructed, and have old vessels reconditioned or remodeled, as the Secretary 
determines necessary to carry out the objectives of this subtitle. 
‘‘(b) PLACE OF WORK.—Construction, reconditioning, and remodeling of 
vessels under subsection (a) shall take place in shipyards in the continental 
United States (including Alaska and Hawaii). However, if satisfactory con-
tracts cannot be obtained from private shipbuilders, the Secretary may have 
the work done in navy yards. 
‘‘(c) APPLICABILITY
OF CONSTRUCTION-DIFFERENTIAL SUBSIDY PROVI-
SIONS.—Contracts for the construction, reconstruction, or reconditioning of a 
vessel by a private shipbuilder under this chapter are subject to the provisions 
of title V of the Merchant Marine Act, 1936, applicable to a contract with 
a private shipbuilder for the construction of a vessel under title V of that Act. 
‘‘§ 57503. Competitive bidding 
‘‘(a) ADVERTISEMENT
AND BIDDING.—The Secretary of Transportation 
may make a contract with a private shipbuilder for the construction of a new 
vessel, or for the reconstruction or reconditioning of an existing vessel, only 
after due advertisement and upon sealed competitive bids. 
‘‘(b) OPENING OF BIDS.—Bids required under this section shall be opened 
at the time and place stated in the advertisement for bids. All interested per-
sons, including representatives of the press, shall be permitted to attend. The 
results of the bidding shall be publicly announced.
210 
‘‘§ 57504. Charter or sale of vessels acquired by Department 
of Transportation 
‘‘Vessels transferred to or otherwise acquired by the Department of Trans-
portation in any manner may be chartered or sold by the Secretary of Trans-
portation as provided in this chapter. 
‘‘§ 57505. Employment of vessels on foreign trade routes 
‘‘(a) IN GENERAL.—The Secretary of Transportation shall arrange for the 
employment of the Department of Transportation’s vessels in steamship lines 
on such trade routes, exclusively serving the foreign trade of the United States, 
as the Secretary determines are essential for the development and mainte-
nance of the commerce of the United States and the national defense. How-
ever, the Secretary shall first determine that those routes are not being ade-
quately served by existing steamship lines privately owned and operated by 
citizens of the United States and documented under the laws of the United 
States. 
‘‘(b) POLICY TO ENCOURAGE PRIVATE OPERATION.—The Secretary shall 
have a policy of encouraging private operation of each essential steamship 
line now owned by the United States Government by— 
‘‘(1) selling the line to a citizen of the United States; or 
‘‘(2) demising the Secretary’s vessels on bareboat charter to citizens of 
the United States who agree to maintain the line in the manner provided 
in this chapter. 
‘‘§ 57506. Minimum selling price of vessels 
‘‘(a) IN GENERAL.—A vessel constructed under this subtitle or the Merchant 
Marine Act, 1936, may not be sold by the Secretary of Transportation for 
less than the price specified in this section. 
‘‘(b) OPERATION IN FOREIGN TRADE.—If the vessel is to be operated in for-
eign trade, the minimum price is the estimated foreign construction cost (ex-
clusive of national defense features) determined as of the date the construction 
contract is executed, less depreciation under subsection (d). 
‘‘(c) OPERATION IN DOMESTIC TRADE.—If the vessel is to be operated in 
domestic trade, the minimum price is the cost of construction in the United 
States (exclusive of national defense features), less depreciation under sub-
section (d). 
‘‘(d) DEPRECIATION.—Depreciation under subsections (b) and (c) shall be 
based on— 
‘‘(1) a 25-year life for dry-cargo and passenger vessels; and 
‘‘(2) a 20-year life for tankers and other bulk liquid carrier vessels.
211 
‘‘SUBCHAPTER II—CHARTERS 
‘‘§ 57511. Demise charters 
‘‘A charter by the Secretary of Transportation under this chapter shall de-
mise the vessel to the charterer subject to all usual conditions contained in 
a bareboat charter. The charter shall be for a term the Secretary considers 
to be in the best interest of the United States Government and the merchant 
marine. 
‘‘§ 57512. Competitive bidding 
‘‘(a) IN GENERAL.—The Secretary of Transportation may charter a vessel 
of the Department of Transportation to a private operator only on the basis 
of competitive sealed bidding. The bids must be submitted in strict compliance 
with the terms and conditions of a public advertisement soliciting the bids. 
‘‘(b) ADVERTISEMENT FOR BIDS.—An advertisement for bids shall state— 
‘‘(1) the number, type, and tonnage of the vessels being offered for 
bareboat charter for operation as a steamship line on a designated trade 
route; 
‘‘(2) the minimum number of sailings required; 
‘‘(3) the length of time of the charter; 
‘‘(4) the right of the Secretary to reject all bids; and 
‘‘(5) other information the Secretary considers necessary for the infor-
mation of prospective bidders. 
‘‘(c) OPENING OF BIDS.—Bids required under this section shall be opened 
at the time and place stated in the advertisement for bids. All interested per-
sons, including representatives of the press, shall be permitted to attend. The 
results of the bidding shall be publicly announced. 
‘‘§ 57513. Minimum bid 
‘‘The Secretary of Transportation shall reject any bid for the charter under 
this subchapter of a vessel constructed under this subtitle or the Merchant Ma-
rine Act, 1936, if the charter hire offered is lower than the minimum charter 
hire would be if the vessel were chartered under section 57531 of this title. 
‘‘§ 57514. Qualifications of bidders 
‘‘(a) CONSIDERATIONS.—In deciding whether to award a charter to a bid-
der, the Secretary of Transportation shall consider— 
‘‘(1) the bidder’s financial resources, credit standing, and practical ex-
perience in operating vessels; and 
‘‘(2) other factors a prudent business person would consider in enter-
ing into a transaction involving a large capital investment. 
‘‘(b) DISQUALIFICATIONS.—The Secretary may not charter a vessel to a 
person appearing to lack sufficient capital, credit, and experience to operate 
the vessel successfully over the period covered by the charter.
212 
‘‘§ 57515. Awarding of charters 
‘‘(a) IN GENERAL.—The Secretary of Transportation shall award the char-
ter to the bidder proposing to pay the highest monthly charter hire. However, 
the Secretary may reject the highest or most advantageous or any other bid 
if the Secretary considers the charter hire offered too low or determines that 
the bidder lacks the qualifications required by section 57514 of this title. 
‘‘(b) HIGHEST BID REJECTED.—If the Secretary rejects the highest bid, the 
Secretary may— 
‘‘(1) award the charter to the next highest bidder; or 
‘‘(2) reject all bids and either readvertise the line or operate the line 
until conditions appear more favorable to reoffer the line for private 
charter. 
‘‘(c) REASON FOR REJECTION.—On request of a bidder, the reason for rejec-
tion shall be stated in writing to the bidder. 
‘‘§ 57516. Operating-differential subsidies 
‘‘If the Secretary of Transportation considers it necessary, the Secretary 
may make a contract with a charterer of a vessel owned by the Secretary for 
payment of an operating-differential subsidy, on the same terms and condi-
tions, and subject to the same limitations and restrictions, as otherwise pro-
vided with respect to payment of operating-differential subsidies to operators 
of privately-owned vessels. 
‘‘§ 57517. Recovery of excess profits 
‘‘(a) IN GENERAL.—A charter under this chapter shall provide that if, at 
the end of a calendar year subsequent to the execution of the charter, the cu-
mulative net voyage profit (after payment of the charter hire reserved in the 
charter and payment of the charterer’s fair and reasonable overhead expenses 
applicable to operation of the chartered vessel) exceeds 10 percent a year of 
the charterer’s capital necessarily employed in the business of the chartered 
vessel, the charterer shall pay to the Secretary of Transportation, as addi-
tional charter hire, half the cumulative net voyage profit in excess of 10 per-
cent a year. However, any cumulative net voyage profit accounted for under 
this subsection is not to be included in the calculation of cumulative net voy-
age profit in any subsequent year. 
‘‘(b) TERMS TO BE DEFINED AND USED.—The Secretary shall define the 
terms ‘net voyage profit’, ‘fair and reasonable overhead expenses’, and ‘capital 
necessarily employed’ for this section. Each advertisement for bids and each 
charter shall contain these definitions, stating the formula for determining 
each of these three amounts. 
‘‘§ 57518. Performance bond 
‘‘The Secretary of Transportation shall require a charterer of a vessel of 
the Secretary to deposit with the Secretary an undertaking, with approved
213 
sureties, in such amount as the Secretary may require as security for the 
faithful performance of the terms of the charter, including indemnity against 
liens on the chartered vessel. 
‘‘§ 57519. Insurance 
‘‘A charter under this chapter shall require the charterer to carry, at the 
charterer’s expense, insurance on the chartered vessel covering all marine and 
port risks, protection and indemnity risks, and all other hazards and liabil-
ities, adequate to cover damages claimed against and losses sustained by the 
chartered vessel arising during the term of the charter. The insurance shall 
be in such form, in such amount, and with such companies as the Secretary 
of Transportation may require. In accordance with law, any of the insurance 
risks may be underwritten by the Secretary. 
‘‘§ 57520. Vessel maintenance 
‘‘(a) IN GENERAL.—A charter under this chapter shall require the 
charterer, at the charterer’s expense, to— 
‘‘(1) keep the chartered vessel in good repair and efficient operating 
condition; and 
‘‘(2) make any repairs required by the Secretary of Transportation. 
‘‘(b) INSPECTION.—The charter shall provide that the Secretary has the 
right to inspect the vessel at any time to ascertain its condition. 
‘‘§ 57521. Termination of charter during national emergency 
‘‘A charter under this chapter shall provide that during a national emer-
gency proclaimed by the President or a period for which the President has 
proclaimed that the security of the national defense makes it advisable, the 
Secretary of Transportation may terminate the charter without cost to the 
United States Government on such notice to the charterer as the President 
determines. 
‘‘SUBCHAPTER III—MISCELLANEOUS 
‘‘§ 57531. Construction and charter of vessels for unsuccess-
ful routes 
‘‘(a) IN GENERAL.—If the Secretary of Transportation finds that a trade 
route determined to be essential under section 50103 of this title cannot be 
successfully developed and maintained and the Secretary’s replacement pro-
gram cannot be achieved under private operation of the trade route by a cit-
izen of the United States with vessels documented under the laws of the 
United States, without further aid by the United States Government in addi-
tion to the financial aid authorized under titles V and VI of the Merchant 
Marine Act, 1936, the Secretary, without advertisement or competition, 
may— 
‘‘(1) have constructed, in private shipyards or in navy yards, vessels 
of the types necessary for the trade route; and
214 
‘‘(2) demise those new vessels or bareboat charter them to the Amer-
ican-flag operator established on the trade route. 
‘‘(b) AMOUNT OF CHARTER HIRE.— 
‘‘(1) IN GENERAL.—The annual charter hire under subsection (a) shall 
be at least 4 percent of the price (referred to in this section as the ‘for-
eign cost’) at which the vessel would be sold if constructed under title 
V of the Merchant Marine Act, 1936, plus— 
‘‘(A) a percentage of the depreciated foreign cost computed annu-
ally determined by the Secretary of the Treasury, taking into con-
sideration the current average market yield on outstanding market-
able obligations of the Government with remaining periods to matu-
rity comparable to the term of the charter, adjusted to the nearest 
one-eighth percent; and 
‘‘(B) an allowance adequate in the judgment of the Secretary of 
Transportation to cover administrative costs. 
‘‘(2) DEPRECIATION.—Depreciation under paragraph (1)(A) shall be 
based on— 
‘‘(A) a 25-year life for dry-cargo and passenger vessels; and 
‘‘(B) a 20-year life for tankers and other bulk liquid carrier ves-
sels. 
‘‘(c) OPTION TO PURCHASE.—The charter may contain an option to the 
charterer to purchase the vessels from the Secretary of Transportation within 
5 years after delivery under the charter, on the same terms and conditions 
as provided in title V of the Merchant Marine Act, 1936, for the purchase 
of new vessels from the Secretary. However— 
‘‘(1) the purchase price shall be the foreign cost less depreciation to 
the date of purchase based on the useful life specified in subsection (b)(2); 
‘‘(2) the required cash payment payable at the time of the purchase 
shall be 25 percent of the purchase price; 
‘‘(3) the charter may provide that any part of the charter hire paid 
in excess of the minimum charter hire provided for in this section may 
be credited against the cash payment payable at the time of the purchase; 
‘‘(4) the balance of the purchase price shall be paid within the remain-
ing years of useful life (as specified in subsection (b)(2)) after the date 
of delivery of the vessel under the charter and in approximately equal 
annual installments, except that the first installment, which shall be 
payable on the next ensuing anniversary date of the delivery under the 
charter, shall be a proportionate part of the annual installment; and 
‘‘(5) interest shall be payable on the unpaid balances from the date 
of purchase, at a rate not less than—
215 
‘‘(A) a rate determined by the Secretary of the Treasury, taking 
into consideration the current average market yield on outstanding 
marketable obligations of the Government with remaining periods to 
maturity comparable to the average maturities of the loans, adjusted 
to the nearest one-eighth percent; plus 
‘‘(B) an allowance adequate in the judgment of the Secretary of 
Transportation to cover administrative costs. 
‘‘(d) OPERATION OF VESSEL.— 
‘‘(1) PERMISSIBLE VOYAGES.—The charter shall provide for operation 
of the vessel exclusively— 
‘‘(A) in foreign trade; 
‘‘(B) on a round-the-world voyage; 
‘‘(C) on a round voyage from the west coast of the United States 
to a European port that includes an intercoastal port of the United 
States; 
‘‘(D) on a round voyage from the Atlantic coast of the United 
States to the Orient that includes an intercoastal port of the United 
States; or 
‘‘(E) on a voyage in foreign trade on which the vessel may stop 
at Hawaii or an island territory or possession of the United States. 
‘‘(2) DOMESTIC TRADE.—The charter shall provide if the vessel is op-
erated in domestic trade on any of the services specified in paragraph 
(1), the charterer will pay annually to the Secretary of Transportation 
that proportion of 1⁄25 of the difference between the domestic and foreign 
cost of the vessel as the gross revenue derived from the domestic trade 
bears to the gross revenue derived from the entire voyages completed dur-
ing the preceding year. 
‘‘§ 57532. Operation of experimental vessels 
‘‘(a) DEFINITION.—In this section, the term ‘experimental vessel’ means a 
vessel owned by the United States Government (including a vessel in the Na-
tional Defense Reserve Fleet) that has been constructed, reconditioned, or re-
modeled for experimental or testing purposes. 
‘‘(b) AUTHORITY TO OPERATE.—The Secretary of Transportation, for the 
purpose of practical development, trial, and testing, may operate an experi-
mental vessel under a bareboat charter or general agency agreement in the 
foreign or domestic trade of the United States or for use for the account of 
a department or agency of the Government, without regard to other provisions 
of this subtitle and other laws related to chartering and general agency oper-
ations. Not more than 10 vessels may be operated and tested under this sec-
tion in any one year.
216 
‘‘(c) TERMS OF OPERATION.—Operation of a vessel under this section shall 
be on terms the Secretary considers appropriate to carry out the purposes of 
this subtitle. A bareboat charter under this section shall be at reasonable rates 
and include restrictions the Secretary considers appropriate to protect the 
public interest, including provisions for recapture of profits under section 
57517 of this title. A charter or general agency agreement under this section 
shall be reviewed annually to determine whether conditions exist to justify 
continuance of the charter or agreement. 
‘‘(d) RIGHTS OF SEAMEN.—A seaman engaged in vessel operations of the 
Secretary under this section and employed through a general agent in connec-
tion with a charter or agreement under this section is entitled to all the rights 
and remedies provided in sections 1(a) and (c), 3(c), and 4 of the Act of 
March 24, 1943 (50 App. U.S.C. 1291(a), (c), 1293(c), 1294). 
‘‘PART G—RESTRICTIONS AND PENALTIES 
‘‘CHAPTER 581—RESTRICTIONS AND PENALTIES 
‘‘Sec. 
‘‘58101.
Operating in domestic intercoastal or coastwise service. 
‘‘58102.
Default on payment or maintenance of reserves. 
‘‘58103.
Employing another person as managing or operating agent. 
‘‘58104.
Willful violation constitutes breach of contract or charter. 
‘‘58105.
Preferences for cargo in which charterer has interest. 
‘‘58106.
Concerted discriminatory activities. 
‘‘58107.
Discrimination at ports by water common carriers. 
‘‘58108.
Charges for transportation subject to subtitle IV of title 49. 
‘‘58109.
Penalties. 
‘‘§ 58101. Operating in domestic intercoastal or coastwise 
service 
‘‘(a) PROHIBITION.—A subsidy may not be awarded or paid to a contractor 
under the operating-differential subsidy program, and a vessel may not be 
chartered to a person under chapter 575 of this title, if the contractor or 
charterer, or a holding company, subsidiary, affiliate, or associate of the con-
tractor or charterer, or an officer, director, agent, or executive thereof, directly 
or indirectly— 
‘‘(1) owns, charters, or operates a vessel engaged in the domestic inter-
coastal or coastwise service; or 
‘‘(2) owns a pecuniary interest in a person that owns, charters, or op-
erates a vessel in the domestic intercoastal or coastwise service. 
‘‘(b) WAIVER.—A person may apply to the Secretary of Transportation for 
a waiver of subsection (a). Before deciding on the waiver, the Secretary shall 
give the applicant and other interested persons an opportunity for a hearing. 
The Secretary may not grant the waiver if the Secretary finds it would— 
‘‘(1) result in unfair competition to a person operating exclusively in 
the domestic intercoastal or coastwise service; or 
‘‘(2) be prejudicial to the objectives and policy of this subtitle.
217 
‘‘(c) CONTINUOUS OPERATION SINCE 1935.—The Secretary shall grant an 
application under subsection (b) without requiring further proof that the pub-
lic interest and convenience will be served and without further proceedings 
as to the competition in the route or trade, if the contractor or other person, 
or a predecessor in interest, was in bona-fide operation as a common carrier 
by water in the domestic intercoastal or coastwise trade in 1935 over the route 
or in the trade for which the application is made and has so operated since 
that time or, if engaged in furnishing seasonal service only, was in bona-fide 
operation in 1935 during the season ordinarily covered by its operation, ex-
cept in either event as to interruptions of service over which the applicant 
or its predecessor in interest had no control. 
‘‘(d) DIVERSION INTO INTERCOASTAL OR COASTWISE OPERATIONS.—If an 
application under subsection (b) is approved, a person referred to in this sec-
tion may not divert, directly or indirectly, money, property, or any other 
thing of value, used in a foreign-trade operation for which a subsidy is paid 
by the United States Government, into intercoastal or coastwise operations. 
‘‘§ 58102. Default on payment or maintenance of reserves 
‘‘The Secretary of Transportation may supervise the number and com-
pensation of all officers and employees of a contractor under the operating- 
differential subsidy program or a charterer under chapter 575 of this title, 
receiving an operating-differential subsidy, if the contractor or charterer— 
‘‘(1) is in default on a mortgage, note, purchase contract, or other obli-
gation to the Secretary; or 
‘‘(2) has not maintained, in a manner satisfactory to the Secretary, 
all of the reserves provided for in this subtitle. 
‘‘§ 58103. Employing another person as managing or oper-
ating agent 
‘‘(a) PROHIBITION.—Except with the written consent of the Secretary of 
Transportation, a contractor holding a contract under the operating-differen-
tial subsidy program or under chapter 575 of this title may not— 
‘‘(1) employ another person as the managing or operating agent of the 
operator; or 
‘‘(2) charter a vessel, on which an operating-differential subsidy is to 
be paid, for operation by another person. 
‘‘(b) APPLICABILITY OF PROVISIONS TO CHARTERER.—If a charter prohib-
ited by this section is made, the person operating the chartered vessel is sub-
ject to all the provisions of this subtitle and the operating-differential subsidy 
program, including limitations of profits and salaries.
218 
‘‘§ 58104. Willful violation constitutes breach of contract or 
charter 
‘‘A willful violation of any provision of sections 58101–58103 of this title 
constitutes a breach of the contract or charter. On determining that a viola-
tion has occurred, the Secretary of Transportation may declare the contract 
or charter rescinded. 
‘‘§ 58105. Preferences for cargo in which charterer has inter-
est 
‘‘A contractor receiving an operating-differential subsidy, or a charterer 
under chapter 575 of this title, may not unjustly discriminate in any manner 
so as to give preference, directly or indirectly, to cargo in which the con-
tractor or charterer has a direct or indirect ownership, purchase, or vending 
interest. 
‘‘§ 58106. Concerted discriminatory activities 
‘‘(a) PROHIBITION.—A contractor receiving an operating-differential sub-
sidy, or a charterer under chapter 575 of this title, may not continue as a 
party to or conform to an agreement with another carrier by water, or engage 
in a practice in concert with another carrier by water, that is unjustly dis-
criminatory or unfair to any other citizen of the United States operating a 
common carrier by water employing only vessels documented under the laws 
of the United States on an established trade route from and to a United 
States port. 
‘‘(b) GOVERNMENT PAYMENT PROHIBITED.—No payment or subsidy of any 
kind may be paid, directly or indirectly, out of funds of the United States 
Government to a contractor or charterer that has violated subsection (a). 
‘‘(c) CIVIL ACTION.—A person whose business or property is injured by a 
violation of subsection (a) may bring a civil action in the district court of 
the United States for the district in which the defendant resides, is found, or 
has an agent. If the person prevails, the person shall be awarded— 
‘‘(1) 3 times the damages; and 
‘‘(2) costs, including reasonable attorney fees. 
‘‘§ 58107. Discrimination at ports by water common carriers 
‘‘(a) PROHIBITION.—A common carrier by water may not, directly or indi-
rectly, through an agreement, conference, association, understanding, or other-
wise, prevent or attempt to prevent any other common carrier by water from 
serving any port described in subsection (b) at the same rates the first carrier 
charges at the nearest port already regularly served by it. 
‘‘(b) PORTS.—A port referred to in subsection (a) is one that is— 
‘‘(1) designed for the accommodation of ocean-going vessels; 
‘‘(2) located on an improvement project authorized by law or by a 
Federal agency; and
219 
‘‘(3) located within the continental limits of the United States. 
‘‘(c) OTHER AUTHORITY NOT LIMITED.—This section does not limit the au-
thority otherwise vested in the Secretary of Transportation and the Federal 
Maritime Commission. 
‘‘§ 58108. Charges for transportation subject to subtitle IV of 
title 49 
‘‘(a) PROHIBITION.—A carrier may not charge, collect, or receive for trans-
portation subject to subtitle IV of title 49 of persons or property, under any 
joint rate, fare, or charge, or under any export, import, or other proportional 
rate, fare, or charge, that is based in whole or in part on the fact that the 
persons or property affected are to be transported to, or have been transported 
from, a port in a territory or possession of the United States or in a foreign 
country, by a carrier by water in foreign commerce, any lower rate, fare, or 
charge than the carrier charges, collects, or receives for the transportation of 
persons or similar property for the same distance, in the same direction, and 
over the same route, in commerce wholly within the United States, unless the 
vessel used for the transportation is or was at the time of the transportation 
documented under the laws of the United States. 
‘‘(b) SUSPENSION OF PROHIBITION.—Whenever the Secretary of Transpor-
tation believes that adequate shipping facilities to or from any port in a terri-
tory or possession of the United States or a foreign country are not being pro-
vided by vessels documented under the laws of the United States, the Secretary 
shall certify this fact to the Surface Transportation Board. On receiving the 
certification, the Board may by order suspend the operation of subsection (a) 
with respect to the rates, fares, and charges for the transportation by rail of 
persons and property transported from or to be transported to those ports, for 
such time and under such terms and conditions as the Secretary may specify 
in the order or in any supplemental order. 
‘‘(c) TERMINATION OF SUSPENSION.—Whenever the Secretary believes that 
adequate shipping facilities are being provided to those ports by vessels docu-
mented under the laws of the United States, and certifies that fact to the 
Board, the Board may order the termination of the suspension. 
‘‘§ 58109. Penalties 
‘‘(a) INDIVIDUALS.—An individual convicted of violating section 58101(d), 
58103, or 58105 of this title shall be fined under title 18, imprisoned for at 
least one year but not more than 5 years, or both. 
‘‘(b) ORGANIZATIONS.—An organization convicted of committing an act 
prohibited by this subtitle shall be fined under title 18. 
‘‘(c) INELIGIBILITY TO RECEIVE BENEFITS.—An individual or organiza-
tion convicted of violating a section referred to in subsection (a) is ineligible, 
at the discretion of the Secretary of Transportation, to receive any benefit
220 
under the construction-differential subsidy or operating-differential subsidy 
programs, or a charter under chapter 575 of this title, for 5 years after the 
conviction.’’. 
SEC. 8. SUBTITLE VI OF TITLE 46. 
(a) REDESIGNATION.—Title 46, United States Code, is amended by redesig-
nating subtitle VI as subtitle VII. 
(b) NEW SUBTITLE.—Title 46, United States Code, is amended by inserting 
after subtitle V the following: 
‘‘Subtitle VI—Clearance, Tonnage Taxes, and 
Duties 
‘‘Chapter 
Sec. 
‘‘601. Arrival and Departure Requirements ...................................................
60101 
‘‘603. Tonnage Taxes and Light Money .............................................................
60301 
‘‘605. Discriminating Duties and Reciprocal Privileges ..........................
60501 
‘‘CHAPTER 601—ARRIVAL AND DEPARTURE 
REQUIREMENTS 
‘‘Sec. 
‘‘60101.
Boarding arriving vessels before inspection. 
‘‘60102.
Production of certificate on entry. 
‘‘60103.
Oath of ownership on entry. 
‘‘60104.
Depositing certificates of documentation with consular officers. 
‘‘60105.
Clearance of vessels. 
‘‘60106.
State inspection laws. 
‘‘60107.
Payment of fees on departing vessel. 
‘‘60108.
Duty to transport tendered cargo. 
‘‘60109.
Duty to transport money and securities of the United States Government. 
‘‘§ 60101. Boarding arriving vessels before inspection 
‘‘(a) REGULATIONS.—The Secretary of Homeland Security shall prescribe 
and enforce regulations on the boarding of a vessel arriving at a port of the 
United States before the vessel has been inspected and secured. 
‘‘(b) CRIMINAL PENALTY.—A person violating a regulation prescribed 
under this section shall be fined under title 18, imprisoned for not more than 
6 months, or both. 
‘‘(c) RELATIONSHIP TO OTHER LAW.—This section shall be construed as 
supplementary to section 2279 of title 18. 
‘‘§ 60102. Production of certificate on entry 
‘‘On entry of a vessel documented under chapter 121 of this title, the master 
or other individual in charge of the vessel shall produce the certificate of docu-
mentation to the customs officer at the place where the vessel is entered. If 
the certificate is not produced, the vessel is not entitled to the privileges of 
a documented vessel. 
‘‘§ 60103. Oath of ownership on entry 
‘‘(a) REQUIRED STATEMENT.—On entry of a vessel of the United States 
from a foreign port, the individual designated under subsection (b) shall state 
under oath that—
221 
‘‘(1) the vessel’s certificate of documentation contains the names of all 
the owners of the vessel; or 
‘‘(2) part of the ownership has been transferred since the certificate 
was issued and, to the best of the individual’s knowledge and belief, the 
vessel is still owned only by citizens of the United States. 
‘‘(b) PERSON TO MAKE STATEMENT.—The statement under subsection (a) 
shall be made by— 
‘‘(1) an owner if one resides at the port of entry; or 
‘‘(2) the master if an owner does not reside at the port of entry. 
‘‘(c) CONSEQUENCE OF NOT MAKING STATEMENT.—If the appropriate indi-
vidual does not make the statement required by this section, the vessel is not 
entitled to the privileges of a vessel of the United States. 
‘‘§ 60104. Depositing certificates of documentation with con-
sular officers 
‘‘(a) REQUIREMENT OF MASTER.—When a vessel owned by citizens of the 
United States, on a voyage from a port in the United States, arrives at a 
foreign port, the master of the vessel shall deposit the vessel’s certificate of doc-
umentation with a consular officer at the foreign port if there is a consular 
officer at that port. 
‘‘(b) RETURN OF CERTIFICATE.—When the master produces a clearance 
from the appropriate officer of the foreign port, the consular officer shall re-
turn the certificate of documentation to the master if the master has complied 
with the provisions of law related to the discharge of seamen in a foreign 
country and the payment of fees of consular officers. 
‘‘(c) CIVIL PENALTY AND COLLECTION.—The master of a vessel failing to 
deposit the certificate of documentation as required by subsection (a) is liable 
to the United States Government for a civil penalty of $500. The consular 
officer shall bring an action to recover the penalty in any court of competent 
jurisdiction. The action shall be brought in the name of the consular officer 
for the benefit of the Government. 
‘‘§ 60105. Clearance of vessels 
‘‘(a) VESSELS OF THE UNITED STATES.—Except as otherwise provided by 
law, a vessel of the United States shall obtain clearance from the Secretary 
of Homeland Security before proceeding from a port or place in the United 
States— 
‘‘(1) for a foreign port or place; 
‘‘(2) for another port or place in the United States if the vessel has 
on board foreign merchandise for which entry has not been made; or 
‘‘(3) outside the territorial sea to visit a hovering vessel or to receive 
merchandise while outside the territorial sea.
222 
‘‘(b) OTHER VESSELS.—Except as otherwise provided by law, a vessel that 
is not a vessel of the United States shall obtain clearance from the Secretary 
before proceeding from a port or place in the United States— 
‘‘(1) for a foreign port or place; 
‘‘(2) for another port or place in the United States; or 
‘‘(3) outside the territorial sea to visit a hovering vessel or to receive 
or deliver merchandise while outside the territorial sea. 
‘‘(c) REGULATIONS.—The Secretary may by regulation— 
‘‘(1) prescribe the manner in which clearance under this section is to 
be obtained, including the documents, data, or information which shall 
be submitted or transmitted, pursuant to an authorized data interchange 
system, to obtain the clearance; 
‘‘(2) permit clearance to be obtained before all requirements for clear-
ance are complied with, but only if the owner or operator of the vessel 
files a bond in an amount set by the Secretary conditioned on the com-
pliance by the owner or operator with all specified requirements for 
clearance within a time period (not exceeding 4 business days) estab-
lished by the Secretary; and 
‘‘(3) permit clearance to be obtained at a place other than a des-
ignated port of entry, under conditions the Secretary may prescribe. 
‘‘§ 60106. State inspection laws 
‘‘When State law requires a certificate of inspection for goods carried on 
a vessel, a vessel transporting the goods may not be cleared until the certifi-
cate is produced. 
‘‘§ 60107. Payment of fees on departing vessel 
‘‘A departing vessel may be cleared only when all legal fees that have ac-
crued on the vessel are paid and proof of payment is presented to the indi-
vidual granting the clearance. 
‘‘§ 60108. Duty to transport tendered cargo 
‘‘Clearance may be refused to a vessel or vehicle transporting cargo destined 
for a domestic or foreign port when the owner, master, or other individual 
in charge refuses to accept cargo tendered in good condition, with proper 
charges, for the same or an intermediate port by a citizen of the United 
States. This section does not apply if the vessel or vehicle is already fully 
loaded (giving appropriate consideration to its proper loading) or is not 
adaptable to transport the tendered cargo. 
‘‘§ 60109. Duty to transport money and securities of the 
United States Government 
‘‘Before being given clearance, a vessel owned by a citizen of the United 
States and bound on a voyage from a port in the United States to another 
port in the United States or in a foreign country, or on a voyage from a
223 
port in a foreign country to a port in the United States, shall receive on 
board any bullion, coin, notes, bonds, or other securities of the United States 
Government that an agency, consular officer, or other agent of the Govern-
ment offers. The vessel shall transport the items securely and deliver them 
promptly to the proper authorities or consignees on arriving at the port of 
destination. Compensation shall be paid for services provided under this sec-
tion that is equal to compensation paid to other carriers in the ordinary 
transaction of business. 
‘‘CHAPTER 603—TONNAGE TAXES AND LIGHT MONEY 
‘‘Sec. 
‘‘60301.
Regular tonnage taxes. 
‘‘60302.
Special tonnage taxes. 
‘‘60303.
Light money. 
‘‘60304.
Presidential suspension of tonnage taxes and light money. 
‘‘60305.
Vessels in distress. 
‘‘60306.
Vessels not engaged in trade. 
‘‘60307.
Vessels engaged in coastwise trade or the fisheries. 
‘‘60308.
Vessels engaged in Great Lakes trade. 
‘‘60309.
Passenger vessels making trips between ports of the United States and foreign ports. 
‘‘60310.
Vessels making daily trips on interior waters. 
‘‘60311.
Hospital vessels in time of war. 
‘‘60312.
Rights under treaties preserved. 
‘‘§ 60301. Regular tonnage taxes 
‘‘(a) LOWER RATE.—A tax is imposed at the rate of 2 cents per ton (but 
not more than a total of 10 cents per ton per year) at each entry in a port 
of the United States of— 
‘‘(1) a vessel entering from a foreign port or place in North America, 
Central America, the West Indies Islands, the Bahama Islands, the Ber-
muda Islands, or the coast of South America bordering the Caribbean 
Sea; or 
‘‘(2) a vessel returning to the same port or place in the United States 
from which it departed, and not entering the United States from another 
port or place, except— 
‘‘(A) a vessel of the United States; 
‘‘(B) a recreational vessel (as defined in section 2101 of this title); 
or 
‘‘(C) a barge. 
‘‘(b) HIGHER RATE.—A tax is imposed at the rate of 6 cents per ton (but 
not more than a total of 30 cents per ton per year) on a vessel at each entry 
in a port of the United States from a foreign port or place not named in 
subsection (a)(1). 
‘‘(c) EXCEPTION FOR VESSELS ENTERING OTHER THAN BY SEA.—Sub-
section (a) does not apply to a vessel entering other than by sea from a for-
eign port or place at which tonnage, lighthouse, or other equivalent taxes are 
not imposed on vessels of the United States.
224 
‘‘§ 60302. Special tonnage taxes 
‘‘(a) ENTRY FROM FOREIGN PORT OR PLACE.—Regardless of whether a tax 
is imposed under section 60301 of this title, a tax is imposed on a vessel at 
each entry in a port of the United States from a foreign port or place at 
the following rates: 
‘‘(1) 30 cents per ton on a vessel built in the United States but owned 
in any part by a subject of a foreign country. 
‘‘(2) 50 cents per ton on other vessels not of the United States. 
‘‘(3) 50 cents per ton on a vessel of the United States having an officer 
who is not a citizen of the United States. 
‘‘(4) $2 per ton on a foreign vessel entering from a foreign port or 
place at which vessels of the United States are not ordinarily allowed 
to enter and trade. 
‘‘(b) VESSELS NOT OF THE UNITED STATES TRANSPORTING PROPERTY BE-
TWEEN DISTRICTS.—Regardless of whether a tax is imposed under section 
60301 of this title, a tax of 50 cents per ton is imposed on a vessel not of 
the United States at each entry in one customs district from another district 
when transporting goods loaded in one district to be delivered in another dis-
trict. 
‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—The tax of 50 
cents per ton under this section does not apply to a vessel that— 
‘‘(1) is owned only by citizens of the United States; and 
‘‘(2) after entering a port of the United States, becomes documented 
as a vessel of the United States before leaving that port. 
‘‘§ 60303. Light money 
‘‘(a) IMPOSITION OF TAX.—A tax of 50 cents per ton, to be called ‘light 
money’, is imposed on a vessel not of the United States at each entry in a 
port of the United States. This tax shall be imposed and collected under the 
same regulations that apply to tonnage taxes. 
‘‘(b) EXCEPTION FOR VESSELS OWNED BY CITIZENS.— 
‘‘(1) IN GENERAL.—Subsection (a) does not apply to a vessel owned 
only by citizens of the United States if— 
‘‘(A) the vessel is carrying a regular document issued by a cus-
tomhouse of the United States proving the vessel to be owned only 
by citizens of the United States; and 
‘‘(B) on entry of the vessel from a foreign port, the individual 
designated under paragraph (2) states under oath that— 
‘‘(i) the document contains the names of all the owners of 
the vessel; or 
‘‘(ii) part of the ownership has been transferred since the 
document was issued and, to the best of that individual’s
225 
knowledge and belief, the vessel is still owned only by citizens 
of the United States. 
‘‘(2) PERSON TO MAKE STATEMENT.—The statement under paragraph 
(1)(B) shall be made by— 
‘‘(A) an owner if one resides at the port of entry; or 
‘‘(B) the master if an owner does not reside at the port of entry. 
‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—Subsection (a) 
section does not apply to a vessel that— 
‘‘(1) is owned only by citizens of the United States; and 
‘‘(2) after entering a port of the United States, becomes documented 
as a vessel of the United States before leaving that port. 
‘‘§ 60304. Presidential suspension of tonnage taxes and light 
money 
‘‘If the President is satisfied that the government of a foreign country does 
not impose discriminating or countervailing duties to the disadvantage of the 
United States, the President shall suspend the imposition of special tonnage 
taxes and light money under sections 60302 and 60303 of this title on vessels 
of that country. 
‘‘§ 60305. Vessels in distress 
‘‘A vessel is exempt from tonnage taxes and light money when it enters be-
cause it is in distress. 
‘‘§ 60306. Vessels not engaged in trade 
‘‘A vessel is exempt from tonnage taxes and light money when not engaged 
in trade. 
‘‘§ 60307. Vessels engaged in coastwise trade or the fisheries 
‘‘A vessel with a registry endorsement or a coastwise endorsement, trading 
from one port in the United States to another port in the United States or 
employed in the bank, whale, or other fisheries, is exempt from tonnage taxes 
and light money. 
‘‘§ 60308. Vessels engaged in Great Lakes trade 
‘‘A documented vessel with a registry endorsement, engaged in foreign trade 
on the Great Lakes or their tributary or connecting waters in trade with Can-
ada, does not become subject to tonnage taxes or light money because of that 
trade. 
‘‘§ 60309. Passenger vessels making trips between ports of the 
United States and foreign ports 
‘‘A passenger vessel making at least 3 trips per week between a port of the 
United States and a foreign port is exempt from tonnage taxes and light 
money.
226 
‘‘§ 60310. Vessels making daily trips on interior waters 
‘‘A vessel making regular daily trips between a port of the United States 
and a port of Canada only on interior waters not navigable to the ocean is 
exempt from tonnage taxes and light money, except on its first clearing each 
year. 
‘‘§ 60311. Hospital vessels in time of war 
‘‘In time of war, a hospital vessel is exempt from tonnage taxes, light 
money, and pilotage charges in the ports of the United States if the vessel 
is one for which the conditions of the international convention for the exemp-
tion of hospital ships from taxation in time of war, concluded at The Hague 
on December 21, 1904, are satisfied. The President by proclamation shall 
name the vessels for which the conditions are satisfied and state when the ex-
emption begins and ends. 
‘‘§ 60312. Rights under treaties preserved 
‘‘This chapter and chapter 605 of this title do not affect a right or privilege 
of a foreign country relating to tonnage taxes or other duties on vessels under 
a law or treaty of the United States. 
‘‘CHAPTER 605—DISCRIMINATING DUTIES AND 
RECIPROCAL PRIVILEGES 
‘‘Sec. 
‘‘60501.
Vessels allowed to import. 
‘‘60502.
Discriminating duty on goods imported in foreign vessels or from contiguous countries. 
‘‘60503.
Reciprocal suspension of discriminating duties. 
‘‘60504.
Reciprocal privileges for recreational vessels. 
‘‘60505.
Retaliatory suspension of commercial privileges. 
‘‘60506.
Retaliation against British dominions of North America. 
‘‘60507.
Suspension of free passage through Saint Marys Falls Canal. 
‘‘§ 60501. Vessels allowed to import 
‘‘(a) IN GENERAL.—Except as otherwise provided by treaty, goods may be 
imported into the United States from a foreign port or place only in— 
‘‘(1) a vessel of the United States; or 
‘‘(2) a foreign vessel owned only by citizens or subjects of the coun-
try— 
‘‘(A) in which the goods are grown, produced, or manufactured; 
or 
‘‘(B) from which the goods can only be, or most usually are, first 
shipped for transportation. 
‘‘(b) EXCEPTION FOR VESSELS OF COUNTRIES NOT MAINTAINING SIMILAR 
RESTRICTIONS.—Subsection (a) does not apply to a vessel of a foreign coun-
try that does not maintain a similar restriction against United States docu-
mented vessels. 
‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—Subsection (a) 
does not apply to a vessel that— 
‘‘(1) is owned only by citizens of the United States; and
227 
‘‘(2) after entering a port of the United States, becomes documented 
as a vessel of the United States before leaving that port. 
‘‘(d) SEIZURE AND FORFEITURE.—If goods are imported in violation of 
this section, the goods and the vessel in which they are imported, along with 
its equipment and other cargo, may be seized by and forfeited to the United 
States Government. 
‘‘§ 60502. Discriminating duty on goods imported in foreign 
vessels or from contiguous countries 
‘‘(a) IMPOSITION OF DUTY.—A discriminating duty of 10 percent ad valo-
rem (in addition to other duties imposed by law) is imposed on goods— 
‘‘(1) imported in a vessel not of the United States unless the vessel— 
‘‘(A) is entitled by law or treaty to enter the ports of the United 
States on payment of the same duties as are payable on goods im-
ported in a vessel of the United States; or 
‘‘(B)(i) is owned only by citizens of the United States; and 
‘‘(ii) after entering a port of the United States, becomes docu-
mented as a vessel of the United States before leaving that port; or 
‘‘(2) produced or manufactured in a foreign country not contiguous 
to the United States and imported from a country contiguous to the 
United States, unless imported in the usual course of strictly retail trade. 
‘‘(b) SEIZURE AND FORFEITURE.—If goods are imported without payment 
of the duty required by this section, the goods and the vessel in which they 
are imported may be seized by, and forfeited to, the United States Govern-
ment. 
‘‘§ 60503. Reciprocal suspension of discriminating duties 
‘‘(a) GENERAL AUTHORITY.—On receiving satisfactory proof from the gov-
ernment of a foreign country that it has suspended, in any part, the imposi-
tion of discriminating duties for any class of vessels owned by citizens of the 
United States or goods imported in those vessels, the President may proclaim 
a reciprocal suspension of discriminating duties for the same class of vessels 
owned by citizens of that country or goods imported in those vessels. 
‘‘(b) EFFECTIVE AND EXPIRATION DATES.—A suspension under this section 
takes effect retroactively from the date the President received the proof from 
the foreign government, and expires when that government stops granting the 
reciprocal suspension. 
‘‘§ 60504. Reciprocal privileges for recreational vessels 
‘‘When the President is satisfied that yachts owned by residents of the 
United States and used only for pleasure are allowed to arrive at, depart 
from, and cruise in the waters of a foreign port without entering, clearing, 
or paying any duties or fees (including cruising license fees), the Secretary 
of Homeland Security may allow yachts from that foreign port used only for
228 
pleasure to arrive at and depart from the ports of the United States and to 
cruise in the waters of the United States without paying any duties or fees. 
However, the Secretary may require foreign yachts to obtain a license to 
cruise in the waters of the United States. The license shall be in the form 
prescribed by the Secretary and contain limitations about length of time, di-
rection, place of cruising and action, and other matters the Secretary con-
siders appropriate. The license shall be issued without cost to the yacht. 
‘‘§ 60505. Retaliatory suspension of commercial privileges 
‘‘(a) GENERAL AUTHORITY.—The President may proclaim a suspension of 
commercial privileges to vessels of a foreign country when— 
‘‘(1) vessels of that country have been given the same commercial 
privileges in the ports and waters of the United States given to vessels 
of the United States (except the privilege of engaging in coastwise com-
merce); and 
‘‘(2) vessels of the United States are denied commercial privileges in 
the ports or waters of that country given to vessels of that country. 
‘‘(b) APPLICATION.—A suspension under this section shall apply to the 
same commercial privileges denied to vessels of the United States in the ports 
or waters of the foreign country, and to the same class of vessels of that coun-
try as the class of vessels of the United States denied the privileges. 
‘‘(c) EFFECTIVE DATE.—The President shall designate the effective date of 
the suspension in the proclamation. 
‘‘(d) PENALTIES.— 
‘‘(1) SEIZURE AND FORFEITURE.—If the master, officer, or agent of 
a vessel of a foreign country does an act for the vessel in the ports or 
waters of the United States in violation of a proclamation issued under 
this section, the vessel and the goods on the vessel may be seized by, and 
forfeited to, the United States Government. 
‘‘(2) FINE OR IMPRISONMENT.—A person opposing an official of the 
Government enforcing this section shall be fined under title 18, impris-
oned for not more than 2 years, or both. 
‘‘§ 60506. Retaliation against British dominions of North 
America 
‘‘(a) GENERAL AUTHORITY.—The President by proclamation may prohibit 
vessels of the British dominions of North America, their masters and crews, 
and products of or coming from those dominions, from entering waters, ports, 
or places of the United States when the President is satisfied that— 
‘‘(1) fishermen or fishing vessels of the United States in waters, ports, 
or places of the British dominions of North America are being or recently 
have been— 
‘‘(A) denied rights provided by law or treaty;
229 
‘‘(B) subjected to unreasonable restrictions in the exercise of those 
rights; or 
‘‘(C) otherwise harassed; 
‘‘(2) fishermen or fishing vessels of the United States, having a permit 
under the laws of the United States to dock or trade at a port or place 
in the British dominions of North America, are being or recently have 
been— 
‘‘(A) denied the privilege of entering the port or place in the same 
manner and under the same regulations applicable to trading ves-
sels of the most-favored-nation; 
‘‘(B) prevented from buying supplies allowed to be sold to trading 
vessels of the most-favored-nation; or 
‘‘(C) otherwise harassed; or 
‘‘(3) other vessels of the United States or their masters or crews in wa-
ters, ports, or places of the British dominions of North America are being 
or recently have been— 
‘‘(A) denied privileges given to vessels of the most-favored-nation 
or their masters or crews; or 
‘‘(B) otherwise harassed. 
‘‘(b) COVERAGE AND EXCEPTIONS.—The President may apply a proclama-
tion under this section to any of the subjects named, and may include excep-
tions for vessels in distress or need of supplies. The President may change, 
revoke, and renew the proclamation. 
‘‘(c) PENALTIES.—A person violating a proclamation issued under this sec-
tion shall be fined under title 18, imprisoned for not more than 2 years, or 
both. A vessel or goods found in waters, ports, or places of the United States 
in violation of the proclamation may be seized by, and forfeited to, the United 
States Government. 
‘‘§ 60507. Suspension of free passage through Saint Marys 
Falls Canal 
‘‘(a) PURPOSE.—The purpose of this section is to secure reciprocal advan-
tages for the citizens, ports, and vessels of the United States. 
‘‘(b) GENERAL AUTHORITY.—When the President is satisfied that vessels of 
the United States, or passengers or cargo being transported to a port of the 
United States, are prohibited from passing through a canal or lock connected 
with the navigation of the Saint Lawrence River, the Great Lakes, or their 
connecting waterways, or burdened in that passage by tolls or other means 
that are unreasonable in view of the free passage through the Saint Marys 
Falls Canal allowed to vessels of all countries, the President by proclamation 
may suspend the right of free passage through the Saint Marys Falls Canal 
for vessels owned by subjects of the country imposing the prohibition, tolls,
230 
or other burdens and for passengers and cargo being transported to the ports 
of that country, even when carried in vessels of the United States. The suspen-
sion shall apply to the extent and for the time the President considers appro-
priate. 
‘‘(c) IMPOSITION OF TOLL.— 
‘‘(1) IN GENERAL.—During a suspension under this section, the Presi-
dent shall impose a toll of not more than $2 per ton on cargo and not 
more than $5 on each passenger. 
‘‘(2) EXCEPTIONS.—Notwithstanding paragraph (1), a toll may not be 
imposed on passengers or cargo landed at Ogdensburg, New York, or any 
port west of Ogdensburg and south of a line drawn from the northern 
boundary of New York through the Saint Lawrence River, the Great 
Lakes, and their connecting channels to the northern boundary of Min-
nesota. 
‘‘(d) COLLECTION OF TOLL.— 
‘‘(1) IN GENERAL.—A toll imposed under this section shall be collected 
under regulations prescribed by the Secretary of Homeland Security. The 
Secretary may require the master of a vessel to provide a sworn state-
ment of the amount and kind of cargo, the number of passengers, and 
the destination of the passengers and cargo. 
‘‘(2) PROOF OF LANDING.—When applicable, the Secretary also may 
require satisfactory proof that the passengers and cargo were landed at 
a port described in subsection (c)(2). Until that proof is provided, the 
Secretary may assume the passengers and cargo were not landed at such 
a port, and the amount of a toll that otherwise would be imposed is a 
lien enforceable against the vessel when found in the waters of the United 
States.’’. 
SEC. 9. SUBTITLE VII OF TITLE 46. 
Subtitle VII of title 46, United States Code, as redesignated by section 8(a) 
of this Act, is amended as follows: 
(1) The subtitle heading and analysis are amended to read as follows: 
‘‘Subtitle VII—Security and Drug Enforcement 
‘‘Chapter 
Sec. 
‘‘701. Port Security .......................................................................................................
70101 
‘‘703. Maritime Security ............................................................................................
70301 
‘‘705. Maritime Drug Law Enforcement ............................................................
70501’’. 
(2) Add after chapter 701 the following: 
‘‘CHAPTER 703—MARITIME SECURITY 
‘‘Sec. 
‘‘70301.
Definitions. 
‘‘70302.
International measures for seaport and vessel security. 
‘‘70303.
Security standards at foreign ports. 
‘‘70304.
Travel advisories on security at foreign ports. 
‘‘70305.
Suspension of passenger services. 
‘‘70306.
Report on terrorist threats.
231 
‘‘§ 70301. Definitions 
‘‘In this chapter: 
‘‘(1) COMMON CARRIER.—The term ‘common carrier’ has the meaning 
given that term in section 40102 of this title. 
‘‘(2) PASSENGER VESSEL.—The term ‘passenger vessel’ has the mean-
ing given that term in section 2101 of this title. 
‘‘(3) SECRETARY.—The term ‘Secretary’ means the Secretary of the de-
partment in which the Coast Guard is operating. 
‘‘§ 70302. International measures for seaport and vessel secu-
rity 
‘‘Congress encourages the President to continue to seek agreement on inter-
national seaport and vessel security through the International Maritime Or-
ganization. In developing an agreement, each member country of the Inter-
national Maritime Organization should consult with appropriate private sec-
tor interests in that country. The agreement would establish seaport and vessel 
security measures and could include— 
‘‘(1) seaport screening of cargo and baggage similar to that done at 
airports; 
‘‘(2) security measures to restrict access to cargo, vessels, and dockside 
property to authorized personnel only; 
‘‘(3) additional security on board vessels; 
‘‘(4) licensing or certification of compliance with appropriate security 
standards; and 
‘‘(5) other appropriate measures to prevent unlawful acts against pas-
sengers and crews on vessels. 
‘‘§ 70303. Security standards at foreign ports 
‘‘(a) GENERAL REQUIREMENTS.—The Secretary shall develop and imple-
ment a plan to assess the effectiveness of the security measures maintained 
at foreign ports that the Secretary, in consultation with the Secretary of 
State, determines pose a high risk of acts of terrorism against passenger ves-
sels. In carrying out this subsection, the Secretary shall consult with the Sec-
retary of State about the terrorist threat that exists in each country and poses 
a high risk of acts of terrorism against passenger vessels. 
‘‘(b) NOTICE AND RECOMMENDATIONS TO OTHER COUNTRIES.—If the Sec-
retary, after implementing the plan under subsection (a), determines that a 
port does not maintain and administer effective security measures, the Sec-
retary of State (after being informed by the Secretary) shall— 
‘‘(1) notify the appropriate government authorities of the country in 
which the port is located of the determination; and
232 
‘‘(2) recommend steps necessary to bring the security measures at that 
port up to the standard used by the Secretary in making the assessment 
under subsection (a). 
‘‘(c) ANTITERRORISM ASSISTANCE.—The President is encouraged to provide 
antiterrorism assistance related to maritime security under chapter 8 of part 
II of the Foreign Assistance Act of 1961 (22 U.S.C. 2349aa et seq.) to foreign 
countries, especially for a port that the Secretary determines under subsection 
(b) does not maintain and administer effective security measures. 
‘‘§ 70304. Travel advisories on security at foreign ports 
‘‘(a) GENERAL REQUIREMENTS.—On being notified by the Secretary that 
the Secretary has determined that a condition exists that threatens the safety 
or security of passengers, passenger vessels, or crew traveling to or from a for-
eign port that the Secretary has determined under section 70303(b) of this 
title does not maintain and administer effective security measures, the Sec-
retary of State immediately shall issue a travel advisory for that port. The 
Secretary of State shall take the necessary steps to widely publicize the travel 
advisory. 
‘‘(b) LIFTING ADVISORIES.—A travel advisory issued under subsection (a) 
may be lifted only if the Secretary, in consultation with the Secretary of 
State, has determined that effective security measures are maintained and ad-
ministered at the port. 
‘‘(c) NOTICE TO CONGRESS.—The Secretary of State shall notify Congress 
immediately of any change in the status of a travel advisory issued under 
this section. 
‘‘§ 70305. Suspension of passenger services 
‘‘(a) GENERAL AUTHORITY.—Whenever the President determines that a for-
eign nation permits the use of territory under its jurisdiction as a base of 
operations or training for, or as a sanctuary for, or in any way arms, aids, 
or abets, a terrorist or terrorist group that knowingly uses the illegal seizure 
of passenger vessels or the threat thereof as an instrument of policy, the Presi-
dent may suspend the right of any passenger vessel common carrier to operate 
to or from, and the right of any passenger vessel of the United States to use, 
a port in that foreign nation for passenger service. The suspension may be 
without notice or hearing and for as long as the President determines is nec-
essary to ensure the security of passenger vessels against unlawful seizure. 
‘‘(b) PROHIBITION.—A passenger vessel common carrier, or a passenger ves-
sel of the United States, may not operate in violation of a suspension under 
this section. 
‘‘(c) PENALTIES.—
233 
‘‘(1) DENIAL OF ENTRY.—If a person operates a vessel in violation of 
this section, the Secretary may deny the vessels of that person entry to 
ports of the United States. 
‘‘(2) CIVIL PENALTY.—A person violating this section is liable to the 
United States Government for a civil penalty of not more than $50,000. 
Each day a vessel uses a prohibited port is a separate violation. 
‘‘§ 70306. Report on terrorist threats 
‘‘(a) CONTENT.—Not later than February 28 of each year, the Secretary 
shall submit a report to Congress on the threat from acts of terrorism to 
United States ports and vessels operating from those ports. The Secretary 
shall include a description of activities undertaken under title I of the Mari-
time Transportation Security Act of 2002 (Public Law 107–295, 116 Stat. 
2066) and an analysis of the effect of those activities on port security against 
acts of terrorism. 
‘‘(b) SUBMISSION.—The report shall be submitted to the Committee on 
International Relations and the Committee on Transportation and Infra-
structure of the House of Representatives and the Committee on Foreign Rela-
tions and the Committee on Commerce, Science, and Transportation of the 
Senate. Any classified information in the report shall be submitted separately 
as an addendum. 
‘‘CHAPTER 705—MARITIME DRUG LAW ENFORCEMENT 
‘‘Sec. 
‘‘70501.
Findings and declarations. 
‘‘70502.
Definitions. 
‘‘70503.
Manufacture, distribution, or possession of controlled substances on vessels. 
‘‘70504.
Jurisdiction and venue. 
‘‘70505.
Failure to comply with international law as a defense. 
‘‘70506.
Penalties. 
‘‘70507.
Forfeitures. 
‘‘§ 70501. Findings and declarations 
‘‘Congress finds and declares that trafficking in controlled substances 
aboard vessels is a serious international problem, is universally condemned, 
and presents a specific threat to the security and societal well-being of the 
United States. 
‘‘§ 70502. Definitions 
‘‘(a) APPLICATION OF OTHER DEFINITIONS.—The definitions in section 102 
of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 
U.S.C. 802) apply to this chapter. 
‘‘(b) VESSEL OF THE UNITED STATES.—In this chapter, the term ‘vessel 
of the United States’ means— 
‘‘(1) a vessel documented under chapter 121 of this title or numbered 
as provided in chapter 123 of this title; 
‘‘(2) a vessel owned in any part by an individual who is a citizen 
of the United States, the United States Government, the government of
234 
a State or political subdivision of a State, or a corporation incorporated 
under the laws of the United States or of a State, unless— 
‘‘(A) the vessel has been granted the nationality of a foreign na-
tion under article 5 of the 1958 Convention on the High Seas; and 
‘‘(B) a claim of nationality or registry for the vessel is made by 
the master or individual in charge at the time of the enforcement 
action by an officer or employee of the United States who is author-
ized to enforce applicable provisions of United States law; and 
‘‘(3) a vessel that was once documented under the laws of the United 
States and, in violation of the laws of the United States, was sold to 
a person not a citizen of the United States or placed under foreign reg-
istry or a foreign flag, whether or not the vessel has been granted the 
nationality of a foreign nation. 
‘‘(c) VESSEL SUBJECT TO THE JURISDICTION OF THE UNITED STATES.— 
‘‘(1) IN GENERAL.—In this chapter, the term ‘vessel subject to the ju-
risdiction of the United States’ includes— 
‘‘(A) a vessel without nationality; 
‘‘(B) a vessel assimilated to a vessel without nationality under 
paragraph (2) of article 6 of the 1958 Convention on the High Seas; 
‘‘(C) a vessel registered in a foreign nation if the flag nation has 
consented or waived objection to the enforcement of United States 
law by the United States; 
‘‘(D) a vessel in the customs waters of the United States; 
‘‘(E) a vessel in the territorial waters of a foreign nation if the 
nation consents to the enforcement of United States law by the 
United States; and 
‘‘(F) a vessel in the contiguous zone of the United States, as de-
fined in Presidential Proclamation 7219 of September 2, 1999 (43 
U.S.C. 1331 note), that— 
‘‘(i) is entering the United States; 
‘‘(ii) has departed the United States; or 
‘‘(iii) is a hovering vessel as defined in section 401 of the 
Tariff Act of 1930 (19 U.S.C. 1401). 
‘‘(2) CONSENT OR WAIVER OF OBJECTION.—Consent or waiver of objec-
tion by a foreign nation to the enforcement of United States law by the 
United States under paragraph (1)(C) or (E)— 
‘‘(A) may be obtained by radio, telephone, or similar oral or elec-
tronic means; and 
‘‘(B) is proved conclusively by certification of the Secretary of 
State or the Secretary’s designee. 
‘‘(d) VESSEL WITHOUT NATIONALITY.—
235 
‘‘(1) IN GENERAL.—In this chapter, the term ‘vessel without nation-
ality’ includes— 
‘‘(A) a vessel aboard which the master or individual in charge 
makes a claim of registry that is denied by the flag nation whose 
registry is claimed; 
‘‘(B) a vessel aboard which the master or individual in charge 
fails, on request of an officer of the United States authorized to en-
force applicable provisions of United States law, to make a claim 
of nationality or registry for that vessel; and 
‘‘(C) a vessel aboard which the master or individual in charge 
makes a claim of registry and for which the claimed nation of reg-
istry does not affirmatively and unequivocally assert that the vessel 
is of its nationality. 
‘‘(2) CLAIM
OF
REGISTRY.—A claim of registry under paragraph 
(1)(A) or (C) may be verified or denied by radio, telephone, or similar 
oral or electronic means. The denial of such a claim by the claimed flag 
nation is proved conclusively by certification of the Secretary of State 
or the Secretary’s designee. 
‘‘(e) CLAIM OF NATIONALITY OR REGISTRY.—A claim of nationality or reg-
istry under this section includes only— 
‘‘(1) possession on board the vessel and production of documents evi-
dencing the vessel’s nationality as provided in article 5 of the 1958 Con-
vention on the High Seas; 
‘‘(2) flying its flag nation’s ensign or flag; or 
‘‘(3) a verbal claim of nationality or registry by the master or indi-
vidual in charge of the vessel. 
‘‘§ 70503. Manufacture, distribution, or possession of con-
trolled substances on vessels 
‘‘(a) PROHIBITIONS.—An individual may not knowingly or intentionally 
manufacture or distribute, or possess with intent to manufacture or distribute, 
a controlled substance on board— 
‘‘(1) a vessel of the United States or a vessel subject to the jurisdiction 
of the United States; or 
‘‘(2) any vessel if the individual is a citizen of the United States or 
a resident alien of the United States. 
‘‘(b) EXTENSION BEYOND TERRITORIAL JURISDICTION.—Subsection (a) ap-
plies even though the act is committed outside the territorial jurisdiction of 
the United States. 
‘‘(c) NONAPPLICATION.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), subsection (a) does not 
apply to—
236 
‘‘(A) a common or contract carrier or an employee of the carrier 
who possesses or distributes a controlled substance in the lawful and 
usual course of the carrier’s business; or 
‘‘(B) a public vessel of the United States or an individual on 
board the vessel who possesses or distributes a controlled substance 
in the lawful course of the individual’s duties. 
‘‘(2) ENTERED IN MANIFEST.—Paragraph (1) applies only if the con-
trolled substance is part of the cargo entered in the vessel’s manifest and 
is intended to be imported lawfully into the country of destination for 
scientific, medical, or other lawful purposes. 
‘‘(d) BURDEN OF PROOF.—The United States Government is not required 
to negative a defense provided by subsection (c) in a complaint, information, 
indictment, or other pleading or in a trial or other proceeding. The burden 
of going forward with the evidence supporting the defense is on the person 
claiming its benefit. 
‘‘§ 70504. Jurisdiction and venue 
‘‘(a) JURISDICTION.—Jurisdiction of the United States with respect to a 
vessel subject to this chapter is not an element of an offense. Jurisdictional 
issues arising under this chapter are preliminary questions of law to be deter-
mined solely by the trial judge. 
‘‘(b) VENUE.—A person violating section 70503 of this title shall be tried 
in the district court of the United States for— 
‘‘(1) the district at which the person enters the United States; or 
‘‘(2) the District of Columbia. 
‘‘§ 70505. Failure to comply with international law as a de-
fense 
‘‘A person charged with violating section 70503 of this title does not have 
standing to raise a claim of failure to comply with international law as a 
basis for a defense. A claim of failure to comply with international law in 
the enforcement of this chapter may be made only by a foreign nation. A fail-
ure to comply with international law does not divest a court of jurisdiction 
and is not a defense to a proceeding under this chapter. 
‘‘§ 70506. Penalties 
‘‘(a) VIOLATIONS.—A person violating section 70503 of this title shall be 
punished as provided in section 1010 of the Comprehensive Drug Abuse Pre-
vention and Control Act of 1970 (21 U.S.C. 960). However, if the offense is 
a second or subsequent offense as provided in section 1012(b) of that Act (21 
U.S.C. 962(b)), the person shall be punished as provided in section 1012 of 
that Act (21 U.S.C. 962).
237 
‘‘(b) ATTEMPTS AND CONSPIRACIES.—A person attempting or conspiring to 
violate section 70503 of this title is subject to the same penalties as provided 
for violating section 70503. 
‘‘§ 70507. Forfeitures 
‘‘(a) IN GENERAL.—Property described in section 511(a) of the Comprehen-
sive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 881(a)) that 
is used or intended for use to commit, or to facilitate the commission of, an 
offense under section 70503 of this title may be seized and forfeited in the 
same manner that similar property may be seized and forfeited under section 
511 of that Act (21 U.S.C. 881). 
‘‘(b) PRIMA FACIE EVIDENCE OF VIOLATION.—Practices commonly recog-
nized as smuggling tactics may provide prima facie evidence of intent to use 
a vessel to commit, or to facilitate the commission of, an offense under section 
70503 of this title, and may support seizure and forfeiture of the vessel, even 
in the absence of controlled substances aboard the vessel. The following indi-
cia, among others, may be considered, in the totality of the circumstances, to 
be prima facie evidence that a vessel is intended to be used to commit, or 
to facilitate the commission of, such an offense: 
‘‘(1) The construction or adaptation of the vessel in a manner that 
facilitates smuggling, including— 
‘‘(A) the configuration of the vessel to ride low in the water or 
present a low hull profile to avoid being detected visually or by 
radar; 
‘‘(B) the presence of any compartment or equipment that is built 
or fitted out for smuggling, not including items such as a safe or 
lock-box reasonably used for the storage of personal valuables; 
‘‘(C) the presence of an auxiliary tank not installed in accordance 
with applicable law or installed in such a manner as to enhance 
the vessel’s smuggling capability; 
‘‘(D) the presence of engines that are excessively over-powered in 
relation to the design and size of the vessel; 
‘‘(E) the presence of materials used to reduce or alter the heat or 
radar signature of the vessel and avoid detection; 
‘‘(F) the presence of a camouflaging paint scheme, or of materials 
used to camouflage the vessel, to avoid detection; or 
‘‘(G) the display of false vessel registration numbers, false indicia 
of vessel nationality, false vessel name, or false vessel homeport. 
‘‘(2) The presence or absence of equipment, personnel, or cargo incon-
sistent with the type or declared purpose of the vessel. 
‘‘(3) The presence of excessive fuel, lube oil, food, water, or spare parts, 
inconsistent with legitimate vessel operation, inconsistent with the con-
238 
struction or equipment of the vessel, or inconsistent with the character 
of the vessel’s stated purpose. 
‘‘(4) The operation of the vessel without lights during times lights are 
required to be displayed under applicable law or regulation and in a 
manner of navigation consistent with smuggling tactics used to avoid de-
tection by law enforcement authorities. 
‘‘(5) The failure of the vessel to stop or respond or heave to when 
hailed by government authority, especially where the vessel conducts eva-
sive maneuvering when hailed. 
‘‘(6) The declaration to government authority of apparently false in-
formation about the vessel, crew, or voyage or the failure to identify the 
vessel by name or country of registration when requested to do so by gov-
ernment authority. 
‘‘(7) The presence of controlled substance residue on the vessel, on an 
item aboard the vessel, or on an individual aboard the vessel, of a quan-
tity or other nature that reasonably indicates manufacturing or distribu-
tion activity. 
‘‘(8) The use of petroleum products or other substances on the vessel 
to foil the detection of controlled substance residue. 
‘‘(9) The presence of a controlled substance in the water in the vicinity 
of the vessel, where given the currents, weather conditions, and course 
and speed of the vessel, the quantity or other nature is such that it rea-
sonably indicates manufacturing or distribution activity.’’. 
SEC. 10. SUBTITLE VIII OF TITLE 46. 
Title 46, United States Code, is amended by adding after subtitle VII the 
following: 
‘‘Subtitle VIII—Miscellaneous 
‘‘Chapter 
Sec. 
‘‘801. Wrecks and Salvage ........................................................................................
80101 
‘‘803. Ice and Derelicts ..............................................................................................
80301 
‘‘805. Safe Containers for International Cargo ............................................
80501 
‘‘CHAPTER 801—WRECKS AND SALVAGE 
‘‘Sec. 
‘‘80101.
Vessel stranded on foreign coast. 
‘‘80102.
License to salvage on Florida coast. 
‘‘80103.
Property on Florida coast to be taken to port of entry. 
‘‘80104.
Salvaging operations by foreign vessels. 
‘‘80105.
Canadian vessels aiding vessels in United States waters. 
‘‘80106.
International agreement on derelicts. 
‘‘80107.
Salvors of life to share in remuneration. 
‘‘§ 80101. Vessel stranded on foreign coast 
‘‘(a) DUTIES OF CONSULAR OFFICER.—When a vessel of the United States 
is stranded on a coast of a foreign country, the consular officer in that coun-
try shall take proper measures, to the extent the laws of that country allow, 
to—
239 
‘‘(1) save and secure the vessel and property on the vessel; and 
‘‘(2) prepare an inventory of the property that is saved. 
‘‘(b) DELIVERY TO OWNER.—After deducting the expenses, the consular offi-
cer shall deliver the property, with an inventory, to the owner of the property. 
‘‘(c) LIMITATION ON TAKING POSSESSION.—A consular officer may not take 
possession of property under this section when the owner, master, or consignee 
is present or able to take possession of the property. 
‘‘§ 80102. License to salvage on Florida coast 
‘‘(a) LICENSING REQUIREMENTS.—To be regularly employed in the busi-
ness of salvaging on the coast of Florida, a vessel and its master each must 
have a license issued by a judge of the district court of the United States for 
a judicial district of Florida. 
‘‘(b) JUDICIAL FINDINGS.—Before issuing a license under this section, the 
judge must be satisfied, when the license is for— 
‘‘(1) a vessel, that the vessel is seaworthy and properly equipped for 
the business of saving property shipwrecked and in distress; or 
‘‘(2) a master, that the master is trustworthy and innocent of any 
fraud or misconduct related to property shipwrecked or saved on the 
coast. 
‘‘§ 80103. Property on Florida coast to be taken to port of 
entry 
‘‘(a) IN GENERAL.—Property taken from a wreck, the sea, or a key or 
shoal, on the coast of Florida and within the jurisdiction of the United States, 
shall be brought to a port of entry of the United States. 
‘‘(b) SEIZURE AND FORFEITURE.—A vessel transporting property described 
in subsection (a) to a foreign port may be seized by, and forfeited to, the 
United States Government. A forfeiture under this subsection accrues half to 
the informer and half to the Government. 
‘‘§ 80104. Salvaging operations by foreign vessels 
‘‘(a) PROHIBITION.—Except as provided in this section or section 80105 of 
this title, a foreign vessel may not, under penalty of forfeiture, engage in sal-
vaging operations on the Atlantic or Pacific coast of the United States, in 
any portion of the Great Lakes or their connecting or tributary waters, in-
cluding any portion of the Saint Lawrence River through which the inter-
national boundary line extends, or in territorial waters of the United States 
on the Gulf of Mexico. 
‘‘(b) WHEN SUITABLE VESSEL NOT AVAILABLE.—The Secretary of Home-
land Security may authorize a foreign vessel to engage in salvaging oper-
ations in a particular locality if, on investigation, the Secretary is satisfied 
that there is not available in that locality a suitable vessel that is—
240 
‘‘(1) owned only by citizens of the United States (including a 
Bowaters corporation under section 12118 of this title); and 
‘‘(2) documented under chapter 121 of this title or numbered under 
chapter 123 of this title. 
‘‘(c) OPERATIONS AUTHORIZED BY TREATY.—This section does not prohibit 
or restrict assistance to vessels or salvaging operations authorized by treaty, 
including— 
‘‘(1) article II of the Treaty between the United States and Great Brit-
ain concerning reciprocal rights for United States and Canada in the 
conveyance of prisoners and wrecking and salvage, signed at Washington, 
May 18, 1908 (35 Stat. 2036); or 
‘‘(2) the Treaty between the United States of America and Mexico to 
facilitate assistance to and salvage of vessels in territorial waters, signed 
at Mexico City, June 13, 1935 (49 Stat. 3359). 
‘‘§ 80105. Canadian vessels aiding vessels in United States 
waters 
‘‘(a) IN GENERAL.—Canadian vessels and wrecking equipment may give 
aid to Canadian or other vessels and property wrecked, disabled, or in distress 
in the waters of the United States contiguous to Canada, including— 
‘‘(1) the canal and improvement of the waters between Lake Erie and 
Lake Huron; and 
‘‘(2) the Saint Marys River and canal. 
‘‘(b) RECIPROCITY.—This section does not apply after the President pro-
claims that privileges reciprocal to those under subsection (a) have been with-
drawn or rendered inoperative by the Government of Canada. 
‘‘§ 80106. International agreement on derelicts 
‘‘The President may make an international agreement with other govern-
ments interested in the navigation of the North Atlantic Ocean, providing for 
the reporting, marking, and removal of dangerous wrecks, derelicts, and other 
menaces to navigation outside the coast waters of the countries bordering the 
North Atlantic Ocean. 
‘‘§ 80107. Salvors of life to share in remuneration 
‘‘(a) ENTITLEMENT OF SALVORS.—A salvor of human life, who gave aid 
following an accident giving rise to salvage, is entitled to a fair share of the 
payment awarded to the salvor for salvaging the vessel or other property or 
preventing or minimizing damage to the environment. 
‘‘(b) COMMON OWNERSHIP OF VESSELS.—The right to remuneration for 
aid or salvage services is not affected by common ownership of the vessels giv-
ing and receiving the aid or salvage services. 
‘‘(c) TIME LIMIT ON BRINGING ACTIONS.—A civil action to recover remu-
neration for giving aid or salvage services must be brought within 2 years
241 
after the date the aid or salvage services were given, unless the court in which 
the action is brought is satisfied that during that 2-year period there had not 
been a reasonable opportunity to seize the aided or salvaged vessel within the 
jurisdiction of the court or within the territorial waters of the country of the 
plaintiff’s residence or principal place of business. 
‘‘(d) NONAPPLICATION.—This section does not apply to a vessel of war or 
a vessel owned by the United States Government appropriated only to a pub-
lic service. 
‘‘CHAPTER 803—ICE AND DERELICTS 
‘‘Sec. 
‘‘80301.
International agreements. 
‘‘80302.
Patrol services. 
‘‘80303.
Speed of vessel in ice region. 
‘‘§ 80301. International agreements 
‘‘(a) GENERAL AUTHORITY.—The President may make agreements with in-
terested maritime countries to— 
‘‘(1) maintain in the North Atlantic Ocean a service of ice patrol, of 
study and observation of ice and current conditions, and of assistance 
to vessels and their crews requiring assistance within the limits of the 
patrol; 
‘‘(2) maintain a service of study and observation of ice and current 
conditions in the waters affecting the set and drift of ice in the North 
Atlantic Ocean; and 
‘‘(3) take all practicable steps to ensure the destruction or removal of 
derelicts in the northern part of the Atlantic Ocean, east of the line 
drawn from Cape Sable to a point in latitude 34 degrees north, longitude 
70 degrees west, if the destruction or removal is necessary. 
‘‘(b) PAYMENT BETWEEN COUNTRIES.—The President may include in an 
agreement under subsection (a) a provision for— 
‘‘(1) payment to the United States Government by other countries for 
their proportionate share of the expense of maintaining the services; or 
‘‘(2) contribution by the Government for its proportionate share if the 
agreement provides for another country to maintain the services. 
‘‘§ 80302. Patrol services 
‘‘(a) GENERAL REQUIREMENTS.—Unless the agreements made under sec-
tion 80301 of this title provide otherwise, an ice patrol shall be maintained 
during the entire ice season in guarding the southeastern, southern, and 
southwestern limits of the region of icebergs in the vicinity of the Grand 
Banks of Newfoundland. The patrol shall inform trans-Atlantic and other 
passing vessels by radio and other available means of the ice conditions and 
the extent of the dangerous region. During the ice season, there shall be main-
tained a service of study of ice and current conditions, a service of providing
242 
assistance to vessels and crews requiring assistance, and a service of removing 
and destroying derelicts. Any of these services may be maintained during the 
remainder of the year as may be advisable. 
‘‘(b) WARNINGS TO VESSELS.—An ice patrol vessel shall warn any vessel 
known to be approaching a dangerous area and recommend safe routes. 
‘‘(c) RECORDING AND REPORTING INCIDENTS.— 
‘‘(1) RECORDING.—An ice patrol vessel shall record the name of a ves-
sel and the facts of the case when the patrol observes or knows that the 
vessel— 
‘‘(A) is on other than a regular recognized or advertised route 
crossing the North Atlantic Ocean; 
‘‘(B) has crossed the fishing banks of Newfoundland north of lati-
tude 43 degrees north during the fishing season; or 
‘‘(C) has passed through regions known or believed to be endan-
gered by ice when proceeding to and from ports of North America. 
‘‘(2) REPORTING.—The name of the vessel and all pertinent informa-
tion about the incident shall be reported to the government of the country 
to which the vessel belongs if that government requests. 
‘‘(d) ADMINISTRATION.—The Commandant of the Coast Guard, under the 
direction of the Secretary of the department in which the Coast Guard is op-
erating, shall carry out the services provided for in this section and shall as-
sign necessary vessels, material, and personnel of the Coast Guard. On request 
of such Secretary, the head of an agency may detail personnel, lend or con-
tribute material or equipment, or otherwise assist in carrying out the services 
provided for in this section. 
‘‘(e) ANNUAL REPORT.—The Commandant shall publish an annual report 
of the activities of the services provided for in this section. A copy of the re-
port shall be provided to each interested foreign government and to each agen-
cy assisting in the work. 
‘‘§ 80303. Speed of vessel in ice region 
‘‘(a) REQUIREMENT.—The master of a vessel of the United States, when ice 
is reported on or near the vessel’s course, shall proceed at a moderate speed 
or change the course of the vessel to go well clear of the danger zone. 
‘‘(b) CIVIL PENALTY.—A master violating this section is liable to the 
United States Government for a civil penalty of not more than $500. 
‘‘CHAPTER 805—SAFE CONTAINERS FOR 
INTERNATIONAL CARGO 
‘‘Sec. 
‘‘80501.
Definitions. 
‘‘80502.
Application of Convention. 
‘‘80503.
General authority of the Secretary. 
‘‘80504.
Approval and examination. 
‘‘80505.
Enforcement. 
‘‘80506.
Delegation of authority.