Jones Act

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The Jones Act is a US federal law that affects maritime trade in US waters and between US ports. By cabotage shipping traffic between US ports is basically limited to vessels that have been manufactured in the United States, US nationals are owned and operated by US citizens. The Jones Act prohibits foreign entrepreneurs from offering the direct transport of goods and passengers between US ports and from selling or renting ships built or refurbished abroad for this purpose.

The cabotage rules of the Jones Act have two main objectives. On the one hand, the trade and transport of goods and passengers within the "Coastwise Trade" should be favored for American shipbuilders and merchant ship owners. On the other hand, this is intended to ensure the preservation of US shipyard capacities, which should be able to cover the USA's increased shipping requirements in times of crisis or war. In connection with the procurement of tanker aircraft by the Air Force , there were considerations to extend the Jones Act to the aircraft sector. The subject was not followed up by Congress .

General

The Jones Act originally designated Article 27 of a 1920 federal law called the Merchant Marine Act . The Merchant Marine Act was intended to promote the establishment and maintenance of a US merchant fleet . The trade committee of the US Senate was in charge of drafting the Merchant Marine Act 1920 . Its then chairman was Republican Senator Wesley L. Jones . The Jones Act was now found in Section 883 of the Appendix to United States Code No. 46 and is now contained in 46 US Code, Subtitle V (merchant marine), Chapter 551 ("coastwise trade", Section 55101 ff.).

The Jones Act is a cabotage law. " Cabotage " is the right of a transport company to provide its services in countries other than their home country (especially in long-distance freight transport). Corresponding foreign services are regulated by a cabotage law. U.S. cabotage laws that preceded the introduction of the Jones Act in 1920 were:

  • the Navigation Act of 1817,
  • the Navigation Act of February 15, 1893 and
  • the Navigation Act of February 17, 1898.

The key message of the Jones Act is:

No merchandise, including merchandise owned by the United States Government, a State (as defined in section 2101 of title 46, United States Code), or a subdivision of a State, shall be transported by water […] between points in the United States [...] either directly or via a foreign port, or for any part of the transportation, in any other vessel than a vessel built in and documented under the laws of the United States and owned by persons who are citizens of the United States [... ].

The reason for the introduction of the Jones Act describes § 816 USC 46 App. as follows:

It is necessary for the national defense and for the proper growth of its foreign and domestic commerce that the United States shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of war or national emergency, ultimately to be owned and operated privately by citizens of the United States; and it is declared to be the policy of the United States to do whatever may be necessary to develop and encourage the maintenance of such a merchant marine, and, in so far as may not be inconsistent with the express provisions of this Act, the Secretary of Transportation shall, in the disposition of vessels and shipping property as hereinafter provided, in the making of rules and regulations, and in the administration of the shipping laws keep always in view this purpose and object as the primary end to be attained.

Reasons for introducing the "Jones Act"

In 1919 the Senate Committee on Commerce under Senator Wesley L. Jones began work on an amendment to the National Maritime Laws. This revision was triggered by the experiences of the USA during the First World War : When the states involved in the war began to use their merchant ships for military operations, the USA suffered from a lack of civilian sea transport capacities. This led to the realization for the USA that it was too risky to rely solely on foreign capacities in the area of sea ​​transport . As a result, an extensive shipbuilding program was initiated. Until the end of the First World War (November 1918), however, only a few ship deliveries were made. An upswing did not take place until after 1918, but it was short-lived.

In 1920 the United States sold 450 merchant ships and 92 warships . This high level could not be maintained in view of the poor economic situation in Europe and the high debt of the European states caused by the war. After 1920, sales of US ships fell significantly again (in 1921 the US sold only 138 merchant ships and 40 warships.) Nevertheless, the US Congress assumed that it would be able to use Europe's economic weakness for further ship exports. With the Jones Act he wanted to permanently consolidate the international dependence on American ships and the goods they transport. Since the actual economic situation was misunderstood in this assessment and the intended goal could not have been achieved, the Jones Act could in principle have been repealed. However, this prevented the popular belief in the 1930s and 1940s that the Jones Act could protect American shipyards from international competition. This was based primarily on the deficit of the US shipbuilding industry in the period between the world wars and shortly after the end of the Second World War , being able to build ships of comparable quality and in larger numbers at lower prices than in foreign shipyards. Skilled workers as well as raw materials were cheaper and more extensive outside the USA. The Jones Act was retained to correct the competitive disadvantage.

Conditions, scope and legal consequences of the cabotage regulations of the Jones Act

Spatial scope

The Jones Act applies to transportation between US ports. as well as in the area of ​​the US coastal waters. It also applies when goods are reloaded at sea, for example in offshore lightering, the reloading of the crude oil transported by super tankers onto small shuttle tankers.

In accordance with the Outer Continental Shelf Lands Act of 1953 (OCSLA), the Jones Act also covers installations outside the jurisdiction that are permanently or temporarily connected to the seabed and are used for the discovery, investigation or extraction of raw materials on the continental shelf , provided that it is used the US have claimed for themselves. This means that the Jones Act covers all transports to and from oil or gas drilling and production facilities and other US installation facilities that are at least temporarily permanently attached to the seabed. The Caribbean archipelago of the Virgin Islands does not fall within the scope of the Jones Act .

Material scope

The Jones Act applies to the transportation of goods or people. In the Supreme Court decision Interstate Commerce Commission (ICC) v. Brimson defines the term "transportation" as "the movement of good or persons from one place to another, by a carrier". The definition of the term “goods” is broad and includes materials extracted or lifted from the seabed, as well as worthless material and waste. The Jones Act also applies to the incineration of hazardous materials on the high seas and the transportation of mail by sea .

Legal Consequences of the Cabotage Regulations of the Jones Act

A ship moving within the territorial scope of the Jones Act must have been built in the United States, fly the US flag and be owned by persons who are nationals of the United States. The Merchant Marine Act of 1936 also stipulated that the captain, all officers, pilots, engineers and ship doctors as well as 75 percent of the “unlicensed crew” (crew members who are not officers) must be US citizens. The shipowners could thus recruit 25% of the crew from a group of people without US citizenship. Shipowners waived this right through agreements with trade unions.

Exceptions to the Rules of the Jones Act

Exceptions are possible "... in the interest of national defense ...". Exceptions are only granted for a maximum of six months. Before they are issued, the US Maritime Administration (part of the US Department of Transportation) is examining alternative means of transport by US ships.

International disaster relief after Hurricane Katrina was a special case . Instead of granting individual exemptions, the United States Department of Homeland Security suspended the restrictive rules of the US cabotage laws between September 1 and 19, 2005. As part of the disaster relief, foreign ships were then allowed to transport oil, gasoline and gas between US ports. This ensured that the areas affected by the hurricane were supplied with goods from other parts of the USA.

Following Hurricane Harvey and Hurricane Irma , the Trump administration relaxed the Jones Act on Relief.

After Hurricane Maria , US President Trump initially refused to relax the Jones Act, citing jobs in the US transportation industry. After several days of public criticism, Trump loosened him for 10 days on September 28, 2017.

Practical solutions

Shipowners mostly try to circumvent the legal consequences of the Jones Act. The transportation of Alaskan oil from the town of Valdez on Prince William Sound in the US state of Alaska to San Francisco in California falls under the Jones Act. Shipowners who want to avoid the legal consequences have their ships stop over in Vancouver , a city in southwest British Columbia on the west coast of Canada. Ships sailing from the Gulf of Mexico to the US east coast stop in Cuba. Passenger ships sailing along the east coast of the USA evade the Jones Act through the “stopovers” in the Bahamas , which are also popular with passengers .

Tort law provisions in the Jones Act

The Jones Act not only regulates cabotage in US waters or between US ports. It also contains provisions on tort and labor law claims by crew members and defines the procedure for enforcing civil law claims against the employer. For this purpose, regulations that already existed for railway employees were transferred to ship crew members. Injuries at work due to at least negligence on the part of the employer, the captain or the rest of the crew are recorded. Section 668 (a) of Title 46 App. USC reads:

Application of Railway Employee Statutes; Jurisdiction. Any seaman who shall suffer personal injury in the course of his employment may, at his election, maintain an action for damages at law, with the right of trial by jury, and in such action all statutes of the United States modifying or extending the common -law right or remedy in cases of personal injury to railway employees shall apply; and in case of the death of any seaman as a result of any such personal injury the personal representative of such seaman may maintain an action for damages at law with the right of trial by jury, and in such action all statutes of the United States conferring or regulating the right of action for death in the case of railway employees shall be applicable. Jurisdiction in such actions shall be under the court of the district in which the defendant employer resides or in which his principal office is located.

The common law practice of forensic training in a common law community also applies to the Jones Act. In the case of Chandris, Inc., v. Latsis ruled by the US Supreme Court that every worker is considered a seaman within the meaning of the Jones Act who spends more than 30 percent of his working hours as a ship worker on navigable waters as part of his employment. He can make claims for damages under the Jones Act.

The compatibility of the cabotage provisions of the Jones Act with international business law

The cabotage regulations of the Jones Act can be viewed as protectionist trade restrictions, but are in line with international business law. With regard to the GATT agreements of 1947 and 1994 (now the WTO), the USA could invoke exemptions. Trade liberalizing measures based on OECD agreements have so far failed due to the US's will to ratify the relevant documents.

General Agreement on Tariffs and Trade (GATT) of 1947 and 1994

The exclusion of foreign ships from cabotage in the USA was a fundamental violation of the general tariff and trade agreements of 1947 and 1994, but the violation was justified. With regard to the violation of Articles III and XI of GATT 1947, the USA invoked an exception regulation known as the “ Grandfather Clause ”. Such a clause contained paragraph 1 (b) of the "Protocol of Provisional Application of the GATT" of October 30, 1947. It stated that the part of GATT 1947, which contained Articles III and XI, was only applicable: "... to the fullest extend not inconsistent with existing legislation ". Since the Merchant Marine Act 1920 had already entered into force before the 1947 Protocol was concluded, the cabotage regulation of the Jones Act initially continued to apply.

With regard to GATT 1994 (in the course of the Uruguay Round Articles III and XI of GATT 1947 were incorporated into Part II of GATT 1994), the USA invoked an exception for its cabotage regulations after paragraph 3 of GATT 1994 The provisions of Part II of GATT 1994 shall not apply to measures taken by a Member under specific mandatory legislation, enacted by that Member before it became a contracting party to GATT 1947, that prohibits the use, sale or lease of foreign -built or foreign-reconstructed vessels in commercial applications between points in national waters or the waters of an exclusive economic zone. Only if the Jones Act were tightened, the USA could no longer refer to Section 3 of GATT 1994: If such legislation is subsequently modified to decrease its conformity with Part II of GATT 1994, it will no longer qualify for coverage under this paragraph.

Restriction of the Jones Act by the OECD

Restrictions on cabotage regulations of the Jones Act by OECD agreements have so far failed due to the will of the states concerned to ratify the agreement. Negotiations on the competitive conditions in shipbuilding began in 1989 (between Finland , Japan , South Korea , Norway , Sweden , the EC and the USA). On December 21, 1994, the "Agreement Respecting Normal Competitive Conditions in the Commercial Shipbuilding and Repair Industry" was finalized. It contained regulations on subsidies and dumping, which were based on the corresponding WTO regulations, but were specially tailored to the shipbuilding sector. The agreement was supposed to enter into force on January 1, 1996, but has only been ratified by the EC, Norway and South Korea.

In December 2004 the USA, the EU , Finland, Japan, South Korea, Norway and Sweden initialed a new “OECD Shipbuilding Agreement”. Similar to the 1994 agreement, the aim was to abolish all direct and indirect subsidies in the shipbuilding sector. However, the agreement has only been ratified by the EU, Korea, Japan and Norway. The Congress did not agree to the accession of the United States. In Europe this served as a reason for the extension of shipbuilding subsidies.

discussion

Opponents of the cabotage regulations of the Jones Act question its effectiveness and cost-effectiveness. They argue that the Jones Act led to higher costs in maritime transport and thus ultimately only promoted rail freight transport (also for large-volume transports). Taxpayers' money was wasted by subsidizing US shipyards. In 1980, for example, subsidies for the transport of 2.3 million t of foreign freight on US ships H. from 71.4 to 78.6 million US $ has been spent. Due to the Jones Act, the development of new types of ships (e.g. container ships) had been neglected in the USA. The US shipbuilding industry's main focus at the moment is the maintenance of existing ships and ship types. Furthermore, the shipyards have relied on the state protection provided by the Jones Act and are no longer internationally competitive. After all, in the USA there would only be a hesitant replacement of older ships because of the high shipbuilding costs.

From the point of view of the proponents speaks in favor of maintaining the Jones Act that it ensures security of supply and helps to prevent shipyard closings (due to the Jones Act from 1953 to 1983 more than 300 ships were used for commercial and passenger traffic between US ports was built). It corresponds to the subsidy practice of foreign states and protects against comparable foreign practices (other states also regulate cabotage and grant national companies advantages that are not available on the free market). The Jones Act also protects national security by ensuring the transport of military or civilian goods in emergencies or crises by maintaining a domestic merchant fleet. Its lifting would mean that freight capacities would hardly be kept under the US flag, which would further drive the final decline of the US shipbuilding industry and thus endanger national security. The cabotage regulations ensure that there are enough well-trained civilian seafarers as well as technically experienced shipyard staff in the USA. Finally, he ensures that a US ship will also be brought back to the USA through enemy waters in the event of a conflict. One could not expect this from a foreign occupation.

outlook

The cabotage regulations do not prevent designs for US ships from being purchased overseas. This also applies to ships that are specially procured for reasons of national security. The two Littoral Combat Ship prototypes of the US Navy are based on an Italian ( Fincantieri ) and Australian ( Austal ) model and the Fast Response Cutter of the US Coast Guard is based on a Dutch model ( ladies ). The US Department of Defense said the technology and productivity of the US shipbuilding industry were not up to international standards. Orders from shipowners who are active in domestic American shipping are not enough on their own to get all US shipyards. They depend on Navy and US Coast Guard projects.

Considerations about the transfer of the Jones Act to the aviation sector, as they emerged during the discussion of the US Air Force tanker contract ( KC-45 vs KC-46 ), were quickly discarded. Trade restrictions, as codified in the Jones Act, cannot even be enacted by an economic power like the USA without harming US companies in a networked world economy (for example a company like Boeing , whose economic success is also shown on a global network Supplier based).

Individual evidence

  1. ↑ 46 USC 883, 19CFR 4.80 and 4.80b.
  2. ↑ Or converted or rebuilt ships.
  3. ↑ US Supreme Court, Central Vermont Transp. Co. v. Durning, 294 US 33 (1935) [294 US 33, 38-39] ( http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=294&invol=33#t1 ).
  4. ↑ Simat, Helliesen & Eichner, Inc., The Jones Act and Its Impact on the State of Alaska, Vol. 1: Executive Summary, 1982, p.2.
  5. ↑ At the beginning of the First World War (1914), the British owned the world's largest merchant shipping fleet (over 8,500 ships).
  6. ↑ Sethi, Arjun, The Merchant Marine Act of 1920: The Impact on American Maritime Labor ( archive link ( Memento of November 20, 2008 in the Internet Archive )).
  7. ↑ Including Alaska, the Hawaiian Islands and outer areas of the USA , such as B. Puerto Rico
  8. ↑ These cover a zone of three nautical miles, as the USA has not yet signed the UN Convention on the Law of the Sea (UNCLOS) of December 10, 1982. UNCLOS gave coastal states the right to expand their territorial waters to 12 nautical miles.
  9. ↑ If the transhipment takes place outside the territorial sea, it is exempt from the application of the Jones Act; Stoll, Peter-Tobias / Tietje, Christian, Restriction of coastal shipping in the USA: The Jones Act in: Law of the International Economy 1996, pp. 652–659 (653).
  10. ↑ 43 USC 1331-1356, PL 212, Ch. 345, August 7, 1953, 67 Stat. 462.
  11. ↑ Section 21 of the Merchant Marine Act 1920 (46 App. USC 877 (2002)).
  12. ↑ US Supreme Court, Interstate Commerce Commission (ICC) v. Brimson, 154 US 447 (1897), no. 883
  13. ↑ Specification by Public Law 100-329 of June 7, 1988.
  14. ↑ substantiated by the Merchant Marine Act of 1928 . See also John G. Kilgour, The US Merchant Marine: National Maritime Policy and Industrial Relations , New York, Praeger Publishers (1975), p. 33.
  15. ^ John G. Kilgour, The US Merchant Marine: National Maritime Policy and Industrial Relations , New York, Praeger Publishers (1975), p. 37.
  16. ^ John G. Kilgour, The US Merchant Marine: National Maritime Policy and Industrial Relations , New York, Praeger Publishers (1975), p. 38.
  17. ↑ These exemptions are granted under Public Law 81-891.
  18. ↑ Section 506 of the Merchant Marine Act of 1936.
  19. ↑ Department of Homeland Security, Office of the Secretary: Waiver of Compliance with Inspection and Navigation Laws ( Memento of the original dated November 27, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / npga.org
  20. ↑ America denies Puerto Rico request for waiver to bring vital fuel and supplies to island , September 27, 2017
  21. ↑ thehill.com: US won't waive shipping restrictions for Puerto Rico relief .
  22. ↑ sueddeutsche.de September 28, 2017: Celebrities help, Trump can be asked
  23. ↑ whitehouse.gov: Press Briefing 9/28/2017, # 17 ( Memento of the original from October 13, 2017 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.whitehouse.gov
  24. ↑ CNN.com: Trump authorizes waiver to loosen shipping regulations for Puerto Rico
  25. ^ Chandris, Inc., v. Latsis, 515 US 347, 115 S.Ct. 2172 (1995) ( http://www.admiraltylawguide.com/supct/Chandris.htm ).
  26. ↑ Peter-Tobias Stoll, Christian Tietje: Restrictions on coastal shipping in the USA: The Jones Act , Law of the International Economy (RIW) 1996, p. 654 (Issue 8).
  27. ^ General Agreement on Tariffs and Trade; General Agreement on Tariffs and Trade 1994, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, THE LEGAL TEXTS: THE RESULTS OF THE URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS 17 (1999), 1867 UNTS 187, 33 ILM 1153 (1994).
  28. ^ World Trade Organization; Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, THE LEGAL TEXTS: THE RESULTS OF THE URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS 4 (1999), 1867 UNTS 154, 33 ILM 1144 (1994).
  29. ↑ A “Grandfather Clause” is an exception regulation according to which a new regulation cannot be applied retrospectively to already existing decisions or laws made under the old regulation.
  30. ↑ http://www.wto.org/english/docs_e/legal_e/06-gatt_e.htm .
  31. ↑ http://www.wto.org/english/docs_e/legal_e/06-gatt_e.htm .
  32. ↑ See lastly the report of the European Commission "United States Barriers to Trade and Investment Report for 2007", in which the validity of the exemption in Section 3 of the GATT 1994 and thus also the cabotage regulations of the Jones Act was confirmed (European Commission, April 2008 , "United States Barriers to Trade and Investment Report for 2007" ( Archived copy ( memento of the original from April 10, 2009 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to instructions and then remove this notice. )). @1@ 2Template: Webachiv / IABot / trade.ec.europa.eu
  33. ↑ Stoll, Peter-Tobias / Tietje, Christian, "Restriction of coastal shipping in the USA: The Jones Act" in: Law of the international economy 1996, pp. 652–659 (658).
  34. ↑ BT-Drucksache 13/10448, recommendation for a resolution and report of the committee for economy (9th committee) of April 21, 1998 ( http://dipbt.bundestag.de/dip21/btd/13/104/1310448.pdf ).
  35. ^ Whitehurst, Clinton H., American Domestic Shipping in American Ships Jones Acts Costs, Benefits and Options, American Enterprise Institute for Public Policy Research, Washington DC 1985, p. 27.
  36. ↑ Whitehurst, Clinton H., American Domestic Shipping in American Ships Jones Acts Costs, Benefits and Options, American Enterprise Institute for Public Policy Research, Washington DC 1985, pp. 24, 36.
  37. ^ Whitehurst, Clinton H., American Domestic Shipping in American Ships Jones Acts Costs, Benefits and Options, American Enterprise Institute for Public Policy Research, Washington DC 1985, p. 34.
  38. ↑ Blethen Maine Newspapers Inc., Maritime law tough to navigate (October 3, 2006) ( Archive link ( Memento of the original from July 14, 2011 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and Archive link according to instructions and then remove this note. ). @1@ 2Template: Webachiv / IABot / business.mainetoday.com
  39. ^ Whitehurst, Clinton H., American Domestic Shipping in American Ships Jones Acts Costs, Benefits and Options, American Enterprise Institute for Public Policy Research, Washington DC 1985, p. 35.
  40. ↑ The US share of global commercial shipbuilding is less than 1%. 80% of this is generated by subsystem or component suppliers.