AMO Currents - U.S. Customs and Border Protection withdraws proposal that would have correctly applied and enforced the Jones Act in the Gulf of Mexico

AMO Currents - Posted: May 12, 2017

U.S. Customs and Border Protection withdraws proposal that would have correctly applied and enforced the Jones Act in the Gulf of Mexico

U.S. Customs and Border Protection (CBP), in a May 10, 2017 publication, announced its withdrawal of a proposal to modify or revoke several ruling letters pertaining to the application of the Jones Act - a proposal that would have corrected the agency's existing position, which essentially deems certain commercial merchandise transported in the Gulf of Mexico to be equipment used by the vessels carrying it, rather than cargo.

The CBP's proposal, originally published on January 18, 2017, was widely welcomed by the U.S. maritime industry and members of Congress as an action to right a decades-old wrong, create thousands of American jobs in the domestic maritime sector, and strengthen U.S. homeland security. American Maritime Officers was among those submitting comments for the record in strong support of the CBP proposal.

The CBP's decision to withdraw the proposal and to subject the modification or revocation of the agency's ruling letters pertaining to the Jones Act to a lengthy regulatory process drew a strong rebuke from the maritime industry and from members of Congress who supported the move to correctly apply the Jones Act in the Gulf of Mexico energy trades.

"The Administration's decision today to delay the revocation of letter rulings impacting the lawful enforcement of the Jones Act in the Gulf of Mexico is extremely disappointing," said Tom Allegretti, chairman of the American Maritime Partnership, a coalition of which American Maritime Officers Service is a member and which AMO supports. "This delay and move to a regulatory review process will damage our American mariners and domestic maritime industry, which is essential for U.S. economic security and job creation. The domestic maritime industry calls on President Trump and his Administration to take immediate action to return these jobs to our American mariners."

Congressman Steve Scalise (R-LA), majority whip in the House of Representatives, released the following statement on CBP's decision to withdraw its proposal:

"I am very disappointed in the announcement today by U.S. Customs and Border Protection regarding the Jones Act.

"CBP's action taken earlier this year took positive steps to finally enforce our nation's maritime border law, and correct decades of faulty private letter rulings that put foreign interests above those of American workers and American national security. In January, CBP was correct in announcing their view that many of these letter rulings were not consistent with or legal under the Jones Act. Unfortunately, it is mind-boggling why a new cumbersome regulatory process is necessary or even appropriate when the issue at hand simply involves the proper enforcement of existing law.

"While some foreign interests may take issue with the Jones Act, it is the law of the land and is in place to ensure that America can protect our borders while also ensuring that only U.S.-flagged and crewed vessels can have access to our inland waterways so we can protect our national security. And to be clear, this is not just a coastal issue - if the Jones Act is undermined, foreign vessels and crews, even those who come from places that don't share our American values, could have access to the deepest interior of our country via our waterways.

"I urge the Administration to tread carefully in this process and to thoroughly consider its implications on our national security, and I am committed to doing everything I can to make sure that the Jones Act isn't undermined in this process."

Congressman Jeff Duncan (R-SC) released the following statement regarding CBP's decision:

"It is disappointing to see that U.S. Customs and Border Protection has reversed a ruling to enforce the Jones Act for foreign-flagged vessels operating in the Gulf of Mexico. By bringing foreign-flagged vessels with cheap labor to work in our nation's oil and gas fields in American territorial waters, U.S. law is being violated. This puts our domestic mariners at a direct disadvantage, hurting American jobs and American shipping. The claim that there just isn't enough U.S. shipping to provide for offshore energy operations ignores the fact that the reason these domestic mariners aren't competitive is directly due to the non-enforcement of the Jones Act. In addition to operating in ways contradictory to U.S. law, the vessels operated by foreign companies do not pay U.S. taxes, nor do their workers. This puts the American vessel owners and their crews at a disadvantage when competing for these contracts, as well as resulting in lost tax revenues for the U.S. government. It's long past time that we reverse these exceptions to the Jones Act, support American jobs and help Make American Energy Great Again."