United States: The Essential Guide To The Jones Act

INTRODUCTION

One of America's most consequential maritime laws is the Jones Act, a fundamental law that regulates American vessels on domestic voyages. Adopted as Section 27 of the Merchant Marine Act of 1920 and now codified in primary part at 46 U.S.C. § 55102,¹ the Jones Act was signed into law by President Woodrow Wilson on 5 June 1920. Pub. L. 66-261. Named for its chief sponsor, Republican Senator Wesley Jones of the state of Washington, the law was enacted a century ago with relatively little fanfare given its far-reaching impact. Its purpose then remains its purpose today: to have for our nation's national defense and commercial needs in times of peace, war, or national emergency the "best equipped, safest and most suitable types of vessels" that are owned and operated by US citizens, crewed by skilled Americans, and built and repaired in the United States.

While the specific law known today as the Jones Act was adopted in 1920, the principles on which it is based were in place long before. Generally, the laws governing domestic maritime transportation are referred to as "coastwise" or "cabotage" laws.² These laws provide advantages to the country's domestic maritime industry and date back to the earliest days of the nation. The third law of the first American Congress, "An Act for Registering and Clearing Vessels, Regulating the Coasting Trade, and for other purposes," was enacted more than a century before the Jones Act. That law, championed by Alexander Hamilton and signed by President George Washington, provided substantially lower duties on merchandise transported domestically on vessels built in the United States and owned by US citizens. 1 Stat. 27 (July 20, 1789). Similarly, the Passenger Vessel Services Act, the coastwise law for passengers, was enacted in 1886—again, decades before the Jones Act.

Although it has been revised, amended, or altered dozens of times since its enactment in 1920, the basic structure of the Jones Act remains relatively intact. The law only applies to the movement of domestic cargo, not international cargo. With respect to merchandise, the law requires that when transported on vessels between two points in the United States, merchandise moves on vessels that are built in the United States, registered in the United States, crewed by Americans, and owned by US citizens. And while the basic contours of the law are relatively simple, the applications and nuances of it are far less so. Over the course of 100 years, a body of amendments, provisos, regulations, interpretations, caselaw, policy, and practice have helped shape its application.

According to US Customs and Border Protection (CBP) within the Department of Homeland Security (DHS), the coastwise transportation of merchandise, within the meaning of the coastwise laws, takes place when:

19 C.F.R. § 4.80(b). In its recent study for the International Transport Workers Federation, the legal analysis organization Seafarers Rights International found that cabotage laws "exist in every region of the world," including "91 member states of the United Nations." Cabotage Laws of the World, Executive Summary at p.10 (2018). Coastwise laws have been enacted into law by nations governing "a majority of the world's coastlines."

THE OTHER JONES ACTS

There are several Jones Acts, but this guide is mainly about the coastwise law that requires merchandise transported by water between two points in the United States to be transported on US-flag vessels.

Sometimes the coastwise Jones Act described in this guide is confused with a different Jones Act, the one that gives mariners the right to sue their employers for injuries. Known as the "Personal Injury Jones Act," it was also adopted as part of the Merchant Marine Act of 1920, and it is codified at 46 U.S.C. § 30104, which is titled "Personal injury to or death of seamen." This guide will not address that Jones Act.

Finally, there is the law sometimes referred to as the Jones Act of Puerto Rico, which impacts the Commonwealth of Puerto Rico in a number of ways, including by designating Puerto Rican citizens born after 11 April 1899 as American citizens. Pub. L. 64-368, 39 Stat 951 (Mar. 2, 1917). Again, this guide will focus solely on the coastwise Jones Act.

A FAMILY OF LAWS KNOWN AS THE JONES ACT

The primary Jones Act law involves the waterborne transportation of merchandise between two points and is discussed in more detail below. Before analyzing the main portion of the Jones Act, there are several other different but similar sections of Title 46 of the US Code that are generally classified in the family of laws known as the Jones Act, encompassed in Chapter 551 of Title 46. These include the following:

Dredging

46 U.S.C. § 55109 allows a vessel to engage in dredging in the navigable waters of the United States only if, (1) the vessel is wholly owned by citizens of the United States for purposes of engaging in coastwise trade; (2) the charterer, if any, is a citizen of the United States for purposes of engaging in the coastwise trade; and (3) the vessel has been issued a certificate of documentation with a coastwise endorsement ... or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement.

As such, the dredging provisions of the Jones Act are very similar to the principal provision governing the transportation of merchandise. The Jones Act applies to the transportation of dredged materials whether or not they have commercial value. 46 U.S.C. § 55010. The dredging provisions date back to 1906, even before the Jones Act itself wasenacted.

Towing

46 U.S.C. § 55111 permits domestic towing only by a vessel that is "wholly owned by citizens of the United States for the purposes of engaging in the coastwise trade" and that has been documented with a coastwise endorsement or is "exempt from documentation but would otherwise be eligible for such a certificate and endorsement." This section applies to the towing of vessels "between ports and places in the United States to which the coastwise laws apply, either directly or via a foreign port or place" and "from point to point within the harbors of ports or places to which the coastwise laws apply." Id. § 55111(b). There is a narrow exception that permits the towing of a vessel that is in distress, but otherwise, the towing Jones Act is similar in principle to the Jones Act governing the transportation of merchandise.

Vessel Escort Operations and Towing Assistance

46U.S.C.§55112limitsspecificescort vessel operations within the navigable waters of the United States (except in the case of a vessel in distress) to US-flag vessels. An escort vessel is defined as one:

Id. § 55112(b). Escort operations are defined as those that (1) commence or terminate at a port or place in the United States, (2) are required by US law or regulation, and (3) include operations provided in whole or part within or through navigation facilities owned, maintained, or operated by the US government or the approaches to those facilities (other than those facilities operated by the St. Lawrence Seaway Development Corporation on the St. Lawrence River part of the seaway). Id. §55112(a).

Transportation of Passengers

Like other provisions of the coastwise laws, 46 U.S.C. § 55103 generally requires the use of a coastwise documented US-flag vessel to transport passengers between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port. This law, however, established by the Passenger Vessel Services Act of 1886, has been implemented with some important differences from the other coastwise laws that are attributable to how passengers travel on vessels today. For example, a foreign-flag cruise ship can transport passengers on a round-trip cruise beginning and ending at the same US port provided the itinerary includes at least one foreign port of call. To the extent the itinerary includes an intermediate port call at a "distant foreign port" (i.e., outside of North America) the foreign-flag cruise ship is permitted to transport passengers between any two US ports. Also, foreign-flag ships are permitted to transport passengers between the US mainland and Puerto Rico but only in the absence of US-flag passenger vessels. Id. § 55104.

Salvage Operations

Salvage operations by foreign vessels generally are not permitted "on the Atlantic or Pacific coast of the United States, in any portion of the Great Lakes or their connecting or tributary waters [including the St. Lawrence River] or in territorial waters of the United States on the Gulf of Mexico." Id. § 80104(a). There are several limited exceptions, including upon a finding that no coastwise-qualified salvage vessel is available. Id. § 80104 (b),(c).

Oil Spill Response

Oil spill response activities in the waters of the United States that include unloading recovered oil in a US port are limited to US-flag documented vessels as long as there exists "an adequate number and type of oil spill response vessels documented under the laws of the United States" that can be "engaged to recover oil from an oil spill in or near those waters in a timely matter, as determined by the Federal On-Scene Coordinator...." Id. § 55113 (1). A foreign vessel can be used only if it is registered in a country that has accorded similar privileges to vessels of the United States. Id. § 55113 (2).

Fisheries

Vessels operating in US fisheries are subject to US build and ownership requirements even if they are not transporting merchandise between US points under Chapter 551. Operation in US fisheries is broadly defined to include processing, storing, transporting (except in foreign commerce), planting, cultivating, catching, taking, or harvesting fish, shellfish, marine animals, pearls, shells, or marine vegetation in US navigable waters or in the 200-mile Exclusive Economic Zone. Id. § 108. Such operation requires the vessel to be US-flag documented with a fishery endorsement, which in turn requires the vessel to be built in the United States and never rebuilt abroad. The owning entity must also meet a 75% US citizen ownership and control test similar to that required for coastwise operations, but more stringent in some respects, including applying the 75% test at each tier and in the aggregate and a detailed annual citizenship review and certification by the Maritime Administration (MarAd) for vessels of 100 feet or more in registered length. Id. §12113.

Related Laws

Chapter 551 includes a number of other provisions that implicate coastwise trade in various more narrowly tailored circumstances, including the transportation of hazardous waste (§ 55105), certain barges and cargo containers (§§ 55106, 55107), and platform jackets (§ 55108), as well as activities involving unloading fish and fish-processing supplies (§§ 55114, 55115), Canadian rail lines (§§ 55116, 55119), and Great Lakes rail routes and certain foreign railroads (§§ 55117, 55118).

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Footnote

1. The Jones Act was originally codified at 46 U.S.C. App. 883. However, in the recodification of Title 46 in 2006, the Jones Act was re-designated as 46 U.S.C. § 55102.

2. This guide uses the coastwise terminology, although the two terms are synonymous.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.