Customs and Border Patrol Undermining Jones Act

On December 11, the Customs and Border Patrol announced its intention of moving forward with a controversial interpretation of maritime transportation rules. The change, which at least one maritime law site called “substantial,” would become effective February 17.

It’s the second time the CBP has tried to impose this interpretation; it withdrew an earlier effort in 2017 after strong opposition by maritime interests and their supporters in Congress. In 2018, a letter from 44 members of Congress of both parties to two influential advisers of President Trump helped scotch that effort.

The new interpretation by CBP was put forward under the guise of revoking and replacing earlier “letter rulings” on individual applications for exemption—rulings that CBP itself has admitted contradict the Jones Act, the law that requires all transportation of cargo between U.S. points to be carried on American-built and -crewed vessels.

But far from correcting the problem, the new interpretation, critics say, would create an even bigger Jones Act loophole. Specifically, the CBP would change its definition of what constitutes “lifting operations” so that certain lifts would not be considered “transportation” under the Jones Act.

In one of his last acts before transitioning to his new role, American Waterways Operators president and CEO Tom Allegretti said, “U.S. Customs and Border Protection’s decision to open the door for foreign vessels to operate in coastwise trade by engaging in lateral movements during lift operations is a highly unfortunate one that does not reflect the Trump Administration’s stated commitment to American jobs and American security. This erosion of the Jones Act disregards not only the criticality of American maritime to the nation, but also the longstanding support for the Jones Act on Capitol Hill, as expressed most recently in a bipartisan letter signed by fifty-five members of Congress urging CBP not to go down this path.”

“CBP does not have the authority to issue definitions that contradict the law,” according to the letter.

The details of the CBPs reasons are arcane, but the implications are clear. The interests behind these proposals are foreign oil and gas companies and wind farm operators, both of which would like to use non-Jones-Act foreign vessels to service their offshore facilities. All operators of U.S. offshore wind farms are currently foreign. Carriage of equipment from point to point within U.S. territorial waters certainly constitutes “transportation” within the meaning of the Jones Act, regardless of the CBP’s interpretation.

Kudos to The American Waterways Operators and other alert maritime organizations for monitoring this latest threat to the Jones Act.