US regulations affecting your ships - get the May update!

Overview

This is the latest in a series of reports supplied by the Chamber of Shipping of America (CSA) with the intention of keeping BIMCO members appraised of legislative developments in the US affecting international shipping. BIMCO highlights only the relevant developments that would impact members. The full CSA May report is also provided. 

Status of Commercial Vessel Discharge Act (CVIDA) – latest update  

S. 1129, the Coast Guard Authorization Act of 2017 (which includes CVIDA text as Title VIII), successfully passed out of the Senate Commerce Committee this month.  While CVIDA has bi-partisan support, six Democratic Senators voted “no” during this markup.  The industry coalition is working with senior leadership in the Senate to address concerns of some Senators to facilitate the movement of this bill to the Senate floor for debate and a floor vote, which could occur as early as the first week of May 2017.

The house version of the said Act without the CVIDA text has been introduced on the House side but as for the timing process for hearing to debate and vote to occur is uncertain.

It is expected that the Senate and House bills will go to the conference committee, hopefully in the early summer for reconciliation and final adoption by both bodies. Given CSA and others has worked this issue for over 16 years (8 Congresses), this year’s initiative is as close as it can get to  enactment of VIDA and remain optimistic that enactment is likely at some time in 2017.  A copy of the bill can be reviewed/downloaded at: https://www.congress.gov/115/bills/s1129/BILLS-115s1129is.pdf

Customs and Border Protection (CBP) Withdraws Revocation of Rulings Proposal

In our April update, we informed members that CBP proposed a modification and revocation of a certain class of ruling relating to the application of the Jones Act to the transportation of certain “merchandise and equipment” between US ports or places. Specifically, this initiative, if agreed upon, would impact the current authorisation of non-US flag offshore supply and repair vessels (OSV) to carry certain items used in the repair of offshore structures.

Early in May, CBP formally announced that it was withdrawing this proposal with no reason offered for it. Sources have suggested that decision could be influenced by the White House’s office of Management and Budget. Not surprisingly, the proposal was strongly supported by the US offshore supply vessel industry and strongly opposed by the oil and gas lobby and the International Marine Contractors Association. It is unknown at this time as to when or if CBP will take additional action on this issue.

EPA Request for Comments on Regulatory Reform 

EPA has requested for comments for the purpose of evaluating existing regulations for duplicity, complexity and/or inordinate costs to the regulated community. CSA has submitted comments relative to EPA’s regulatory impact on global shipping and amongst their comments made, the following are of importance to members :

1) Critical that a level playing field is created globally so as not to provide competitive advantage to vessels flying the flag of a particular nation(s). 

Currently, the United States imposes a number of more stringent requirements on marine vessels that are engaged in the domestic and international trades.  While it is certainly within the sovereign right of the US to impose, these more stringent requirements make it more costly to do business in the US, including that business which is conducted by US flag vessels engaged in the Jones Act trade.  One such example relates to the established Emissions Control Area, which although recognized as an option of the MARPOL Annex VI convention, results in elevated fuel costs for all vessels, regardless of flag, trading in US waters.  It should also be noted in this case that foreign flag vessels must utilize the requisite low sulfur fuel only when within 200 nautical miles of the US coastline while US flag vessels trading exclusively in this area must use the low sulfur fuel at all times.  This disparity in costs has and will continue to result in realignment of trading patterns at the expense of the domestic fleet and the possible development of short sea shipping routes.

2) The International Maritime Organization (IMO), a UN subsidiary body, regulates shipping across a broad range of issues, both safety and environmental related.

Key to an efficient global transportation system is a clear and consistent set of requirements relating to marine vessel operations to which nations can agree.  IMO serves the critical purpose of serving as the forum where nations may identify current issues requiring attention, make proposals to address these issues and ultimately end up with a globally agreed instrument or treaty enforceable under international law and national implementing law and regulations by ratifying nations.

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