U.S. Customs and Border Patrol Agency Withdraws Jones Act Proposal

Last month the U.S. Customs and Border Protection Service (CBP) announced that it will suspend and reconsider a set of regulatory amendments to the Jones Act that were proposed by the Obama administration.

Under the Jones Act, established in the 19th Century, vessels carrying cargo between U.S. ports are required to staff U.S. crews and display U.S. flags. The application of the Outer Continental Shelf Lands Act extends the Jones Act restriction to structures connected to the seabed of the U.S. Outer Continental Shelf, including those used for the exploration of oil and gas. However, under limited circumstances, the CBP has allowed oil and gas vessel owners or operators to obtain waivers of the Act; such waivers enable these operators to use foreign flagged vessels that are more available and less costly.

The amendments to the Act aimed to exten­­­­d its protective measures by revoking waivers available to oil and gas operators. On the one hand, major oil and gas industry operators of the American Petroleum Industry heavily contested these measures and increased their lobbying efforts as the proposed modifications would hinder the effective and economic operation of off shore oil and gas vessels. On the other hand, the Offshore Marine Service Association had long awaited a corrective action by the CBP that would stimulate American crews and shipyards.

The CBP reported that after receiving over 3,000 comments from proponents and opponents of the proposed action as well as further research, it concluded that it would reconsider whether to withdraw the regulatory changes proposed by the Obama administration.

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