Monday, October 20, 2014

Ruling of the Week 13: Keeping Up With The Jones Act

The Jones Act is an aspect of customs law we don't often cover. It is, however, disproportionately represented in the rulings Customs and Border Protection issues. It is, therefore, worth a brief look.

The part of the Jones Act with which we are concerned regulates coastwise transport and is 46 U.S.C. § 55103. Under the law, to be a coastwise-qualified vessel, the ship must have been made at a U.S. shipyard, documented in the U.S., and owned by a citizen of the U.S. Only coastwise-qualified vessel can carry passengers or cargo from one U.S. port to another. A non-coastwise-qualified vessel may not transport passengers or cargo from one U.S. port to another U.S. port without risking a $300 penalty. Many ships are documented in Panama, the Bahamas, and other countries where the fees and regulations are favorable. This is why cruises departing the U.S. return to the port of departure.

Customs is often asked whether a person who happens to be on a ship is considered a passenger for purposes of the Jones Act. That is what happened in HQ H258132 (Oct. 15, 2014). A passenger is anyone on board who is not connected to the operation of the vessel.

In this case, someone was on board the M/V Seabourn Quest to install a new satellite antenna. Customs has held repeatedly that workmen [sic] and technicians are not passengers if their activities on board the vessel contribute to the operation, navigation, or business of the vessel. Installing a satellite antenna is directly connected to the operation of the vessel and, therefore, the technician is not a passenger.

Done and done.

Now for you ship nerd, the M/V Seabourn Quest was built in Italy and is documented in the Bahamas. It is a cruise ship capable of carrying 450 passengers with a crew of 335. Here is a nice shot from "The Cruise People."


If you are interested in the economics of the Jones Act, check out this episode of NPR's Planet Money.

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