American Shipper

CBP moves to enforce Jones Act for offshore services

CBP moves to enforce Jones Act for offshore services

Wells

   An industry group representing operators of U.S.-flag supply vessels for the offshore oil business commended Customs and Border Protection for its recent proposal to strengthen the Jones Act in this trade.

   Under the Jones Act, cargo can only be carried between two U.S. points on vessels that are U.S. owned and crewed and built in U.S. shipyards. CBP, which administers the Jones Act as it applies to offshore energy operations, said in its proposal that it plans to revoke or modify 20 rulings to restore the original intent of the Jones Act as it applies offshore.

   Specifically, CBP compares several rulings to the original Jones Act, as well as the 1976 ruling, and states: 'CBP recognizes that allowing foreign-flagged vessels to transport merchandise from one U.S. point and install that merchandise at another point ' on the condition that is merely be accomplished 'on or from that vessel' would be contrary to the legislative intent' of the Jones Act.

   'With this proposal, CBP is saying that there is a hard line between transportation and installation. Foreign boats may be able to install oilfield equipment, but only U.S. boats can carry it offshore,' said Ken Wells, president of the Harahan, La.-based Offshore Marine Service Association, in a statement on Monday. 'The problem is that for many years, CBP rulings had allowed foreign vessels to carry cargo to sub-sea oil and gas locations as long as that vessel also installed it.'

   Wells pointed out that foreign-flag offshore supply boat operators have already voiced opposition to the CBP proposal, suggesting it would shut down offshore projects.

   'Those claims are simply not true,' he said. 'Obviously, this could cost them business. However, the fact is American vessels are ready to do this work and if anything, the CBP proposal will protect existing U.S. jobs by keeping foreign boats from flooding the market in the future.'

   In addition to supporting the proposal, Wells urged the oil and gas companies to reach out to the U.S. vessel owners to make sure that their workboat transportation needs are met and offshore activity can go on without interruption.

   To review the CBP proposal, access the Customs Bulletin and Decisions, Vol. 43, No. 28, July 17, 2009 (pages 54-118) online.

   Comments pertaining to the proposal are due to the agency's Office of International Trade Regulations and Rulings by Aug. 16.

   Also, for more details about OMSA's efforts to enforce the Jones Act for the U.S.-flag offshore marine services industry, read the February American Shipper, pages 41-43.