Will Jones Act Waivers Be a Viable Option in the Future ?
BY DANA S . MERKEL , JONATHAN K . WALDRON , AND JEANNE M . GRASSO
Companies often ask if it is possible to obtain a Jones Act waiver in emergency circumstances or otherwise when they know that there may not be domestic Jones Act vessels available to perform the transportation or installation of cargo . Historically , waivers have been very difficult to obtain and recent Congressional developments will make them even more difficult to obtain .
Background The Jones Act prohibits the “ transportation of merchandise by water , or by land and water , between points in the United States … either directly or via a foreign port ” unless the vessel is U . S . built , U . S . -flag , and 75 percent U . S . owned . Jones Act requirements can only be waived if “ necessary in the interest of national defense .” 46 U . S . C . § 501 ( the “ Waiver Provision ”).
It is extremely difficult and rare to obtain a waiver of the Jones Act . The Waiver Provision has always limited waivers to situations where such waiver is needed for national defense purposes .
There have historically been two waiver types that could be granted by the Secretary of Homeland Security : those granted automatically when requested by the Secretary of Defense and those that were discretionary upon request with confirmation from the Maritime Administration that no U . S . -flag vessels were available .
Waivers were most frequently granted to address actual or perceived energy supply issues ( determined to be in the interest of national defense ), particularly oil and gas transportation after major hurricanes and national disasters or drawdowns on strategic reserves .
It is extremely difficult and rare to obtain a waiver of the Jones Act . The Waiver Provision has always limited waivers to situations where such waiver is needed for national defense purposes .
This was followed recently by even further limitations on waivers . The 2023 NDAA again amended the Waiver Provision , by mandating that only the “ President ” can determine that a waiver is necessary in the interest of national defense for “ discretionary ” waivers .
In addition , it prohibits waivers from being issued if the cargo was already loaded at the time of the request . Publication requirements were also increased to include the waiver requests and whether each request was granted or denied and an explanation of why . Further , it mandates at least a 48-hour delay between publication of the waiver request and issuance of the waiver , during which an assessment of non-availability of qualified U . S . -flag vessels must be conducted .
Publication requirements were also increased to include the waiver requests and whether each request was granted or denied and an explanation of why .
Conclusion The next time someone asks you whether a Jones Act waiver would be a feasible option in an emergency or otherwise , we suggest you refer them to this article . p – 2023 BLANK ROME LLP
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