Coastwise Trade Waivers


Under the Jones Act, small vessels wishing to engage in coastwise carriage of passengers must have been built and documented in the United States. Foreign built vessels, or US built vessels that were registered or rebuilt abroad, were ineligible to trade absent exceptional circumstances. The easiest way to have to get past the requirements was to obtain a legislative waiver-- an act of Congress. More difficult avenues (this is what the law says!) included having the vessel captured by a US citizen during wartime or wrecking the vessel in US waters and spending three times its post salvage-value on rebuilding. For the first time in the year 2000, a law was passed that allows a vessel�s owner to receive a waiver of the US build requirements. The law contained a sunset provision, however, stating that no waivers will be considered or granted after September 20, 2002. The program, however, has now been renewed and is being administered by the Maritime Administration of the United States Department of Transportation (MARAD).


In order to obtain a waiver, the vessel must meet at least five basic requirements:

  1. The vessel must be eligible for documentation (i.e. 5 gross tons or above and owned by a US citizen), and must be a small passenger vessel or an uninspected passenger vessel as those terms are defined in the regulations. Typically this will mean a boat that is to carry between one and twelve passengers plus crew. For bareboat charters, a few more passengers may be allowed.

  2. The hull must have been built or rebuilt more than three years before the application.

  3. The owner must pay a non-refundable $300 fee to MARAD.

  4. The application must demonstrate that the waiver will not have an undue adverse impact on existing operators, boat yards or boat builders.

  5. The vessel and its owner must otherwise meet the requirements to trade, so the owner must be a citizen of the United States and the vessel must able to pass Coast Guard inspection.

  6. If the vessel is owned by a corporation, the corporation must be owned (at least in significant part) by a US citizen.


For owners that wish to seek the waiver, it may be advisable to have an attorney that is familiar with these issues assist with the application. A good attorney can make sure that the vessel, its owner and the application meet the requirements, and monitor the public comments and subsequent MARAD investigation. With appropriate planning, problems can be avoided that may lead to an application being rejected.