Jones Act and US Build Requirements

US Build Requirements


Did you know that all commercially used federally documented vessels must be built in the United States? This is true unless the vessel has been given an administrative or legislative waiver from the U.S. Build Requirements. The following story appeared on August 6, 2004 in The Dispatch in Ocean City, Maryland. Reprinted with permission.

Commercial Fishermen Face Possible Loss Of Boats

'Jones Act' Provision Prohibits Foreign-Built Boats

Benjamin L. Mook Editor

OCEAN CITY - In less than a month, a group of local commercial fishermen based out of the West Ocean City harbor face the very real possibility that they could be prohibited from using their boats under an 84-year-old law that has become increasingly enforced in recent years. The U.S. Coast Guard recently issued letters to a group of local commercial fishermen. In the letter, the Coast Guard notified the fishermen that their boats, which were built in Nova Scotia, needed to be registered at the federal level not just with the state. The caveat is that to receive federal "documentation" a boat that can hold five net tons of cargo has to have been built in America. The punishment for those that are not is severe. "A vessel and its equipment are liable to seizure by and forfeiture to, the United States government when a vessel is employed in a trade without an appropriate trade endorsement," Joan Woody, chief of the Coast Guard's Commercial Division wrote. The fishermen who received the letter, some of whom have been fishing with their Canadian-built boats for years, were given 30 days to comply. The captains, at their own expense, are flying in an expert to determine if each boat is over or under the five net tons limit.

The applicable law, called the "Jones Act," is little known outside of maritime law and legislation circles. It was passed in 1920 to protect the nation's shipbuilding industry by requiring American ownership, and American building of, commercial shipping in national waters. "The intent of the Jones Act is to maintain the United States ship building industry by requiring that commercial vessels that are used here are also built and owned here," J. Dirk Schwenk, an Annapolis-based maritime attorney, said. Hannah Weagle, with the Nova Scotia Boat Builder's Association, said the Jones Act has had serious ramifications on the maritime economy of the island. She said that in recent years they have been focusing on educating the boat builders on the specifics of the law so that situations like the one in this area do not happen. "The Jones Act is something some builders here are unaware of," Weagle said. "It's not something we used to run in to." Weagle said that in recent years though the association has been seeing it more frequently. Weagle said many feel the Jones Act not only affects the export business in Nova Scotia, but also takes away the consumer power of the American commercial boat owners. "It is a kind of trade barrier that limits what we can export and limits what U.S. commercial fishermen can purchase," Weagle said.

As the single most expensive capital outlay for commercial fishing, brand new fishing boats over 30-feet in length, those targeted by the Jones Act, can retail for upwards of $200,000. The possibility of taking that kind of loss has heightened the concern of those contacted by the Coast Guard. Renee Kelly, whose husband, James, has fished local waters for almost two decades, said they are still reeling from the Coast Guard letter they got last month. "This is affecting our livelihood now," Kelly said. "We've had to take the boat out of the water until this is resolved. Now, it's in our yard, it's a giant lawn ornament." Kelly said the other anglers she spoke with who received the letters had no idea about the Jones Act and its ramifications. Instead, she said, the local boat owners saw the Nova Scotian boats as cheaper, better built and more economical on fuel. "Everything that the government has been telling us for years we need to work on," Kelly said. "We bought the boat to cut back on costs and have something better built and more environmentally-friendly. Now we could lose it all."

Dave Martin, owner of Martin Seafood, long a proponent of commercial fishing interests, sees the Coast Guard's actions as yet another stab at an over-regulated industry. "It's totally ridiculous," Martin said. "All they're trying to do is put someone out of business for no good reason. I mean how can you come along and nail a guy's shoes to the deck and say 'you can't do that anymore.'" The boat owners now have the ear of Congressman Wayne Gilchrest, who met with a number of them earlier this week. Gilchrest spokeswoman Cathy Bassett said the issue was a priority and work was underway to hopefully find a solution. "This is some pretty scary stuff," Bassett said. "We're exploring all avenues and we're going to see what, if anything we can do to help."