Customs withdraws Jones Act proposal
U.S. Customs and Border Protection said last week it would withdraw a proposal to modify its position on the Jones Act's applicability on transport of material from U.S. ports to the offshore sites such as oil and gas wells.
On July 17, in its weekly bulletin, the agency said it was proposing to modify and revoke ruling letters related to the applicability of the cabotage law “to certain merchandise and vessel equipment that are transported between coastwise points.”
The Jones Act generally requires goods transported within the country to be carried on U.S.-built vessels, owned by U.S. companies and crewed by U.S. mariners.
CPB was planning to modify an interpretation of the Jones Act that had allowed non-Jones Act vessels to carry to offshore fields as well as install offshore equipment such as “Christmas Tree” well heads on the ocean floor. Proponents of the Jones Act felt CBP had gone too far in allowing foreign-flag vessels to transport as well as install those items from U.S. ports.
The proposal drew more than 140 comments, many of which asked for more time to comment.
Groups like the Harahan, La.-based Offshore Marine Service Association (OMSA), said the CBP proposal would have drawn a bright line between transportation and installation of oilfield equipment and would mean that foreign boats may be able to install oilfield equipment, but only U.S. boats can carry it to offshore sites.
CBP said last week that, “based on several substantive comments CBP received, both supporting and opposing the proposed action and CBP’s further research on the issue ' rulings cited within the proposed action should be reconsidered.'
“Our sense is that they are sifting through what they heard and they are taking some points from them to revise this concept,” said Ken Wells, president of OMSA.
“It’s another step in the process,” he said. “We are disappointed they did not finalize this. We thought they did a thorough analysis of the Jones Act and the way the rulings have strayed from the original intent.”
But he added, “I think that what they will come back out with will look a lot like the first proposal with some modifications.”
Groups like the Shipbuilders Council of America and Maritime Cabotage Task Force supported the CBP proposal, while groups like the International Marine Contractors Association warned the sudden change in policy could “have a potentially devastating impact on the U.S. offshore oil and gas industry.”
