FMC Announces Investigation into Flags of Convenience and Unfavorable Conditions Created by Flagging Practices( continued from page 5)
The FMC therefore may be assessing how its unilateral powers( which often are used in tandem with diplomatic approaches by the U. S. Department of State and other agencies) might be used to increase the pressure on the most problematic flag States to adhere to international standards or withdraw from market.
Public Comments Due August 20, 2025 Comments may be submitted by all members of the public( including ship owners, operators, managers; flag States; shippers; carriers; governments; and non-governmental organizations), but the Notice said the FMC is particularly interested in receiving input from individuals and organizations with expertise or experience in vessel operations, international trade, international law, and national security, including international standards-setting organizations( e. g., the IMO and International Transport Workers’ Federation), countries with large ship registries, and those with evidence of the burdens and risk created by irresponsible flagging practices. Specifically, the FMC is seeking comments on the following topics:
• Specific examples of responsible flagging laws, regulations, practices, and proposals, including how they contribute or would contribute to the efficiency and reliability of the ocean shipping supply chain;
• Specific examples of unfavorable flagging laws, regulations, and practices that endanger the efficiency and reliability of the ocean shipping supply chain;
• Practices by owners or operators of vessels that undermine the efficiency and reliability of international ocean shipping;
• The benefits to international ocean shipping of responsible vessel registration and flagging practices; and
• The burdens on foreign nations and vessel operators or owners of irresponsible flagging practices.
Key Takeaways
• At this time, the investigation is only informational— FMC has not proposed or threatened any penalties or restrictions. However, the FMC has the power to impose vessel fees similar to what the U. S. Trade Representative has done recently in connection with its Section 301 investigation of China’ s targeting of the maritime, logistics, and shipbuilding sectors. See our previous alert. Thus, the information submitted during the investigation comment period likely will help shape the FMC’ s next steps.
• Interested parties should strongly consider submitting comments on the topics noted above, which are further described with added examples in the Notice.
As this investigation progresses, we will continue to monitor any developments. p – 2025 BLANK ROME LLP This article was first published as a Blank Rome Maritime alert on May 28, 2025. MAINBRACE • 6