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Vessels, Owners, Operators Prohibited From Carrying
Government Impelled Cargo
February 10, 2004
From: Thomas W.
Harrelson
Director, Office of Cargo Preference
To: All Shippers and
Carriers of Government-Impelled Cargo
IMPORTANT NOTICE
TO THE TRADE
This memorandum provides notice and
guidance for compliance with the Cargo Preference Laws of the United States regarding
substandard vessels.
Section 408 of the Coast Guard
Authorization Act of 1998, Public Law 105-383 (46 U.S.C. 2302(e)), establishes that
substandard vessels and vessels operated by operators of substandard vessels are
prohibited from the carriage of Government-impelled cargo for up to one year after such
determination has been published electronically. The Office of General Counsel of the
Department of Transportation has determined this law is applicable to all such vessels,
owners and operators posted from April 1, 1999 forward.
A vessel which may not carry
Government-impelled cargoes is defined as either (a) a vessel that has been detained and
determined to be substandard for violation of an international safety convention to which
the United States is a party or, (b) a vessel whose operator has on more than one occasion
had a vessel detained and determined to be substandard. In both such situations the name
of the owner of the vessel also shall be published.
The prohibition against a specific vessel
or an operator expires the earlier of either one (1) year after electronic publication of
the prohibition or any date on which the owner or operator prevails in an appeal of the
violation.
"Government-impelled cargo" is
defined by Section 408 as: "cargo for which a Federal agency contracts directly for
shipping by water or for which (or the freight of which) a Federal agency provides
financing, including financing by grant, loan or loan guarantee, resulting in shipment of
the cargo by water."
A list of those vessels and owners who
are ineligible to carry government cargo can be found on the
General Information
section of the U.S. Coast Guard Port State Control web site at:
Homeport
Shippers of Government-impelled cargoes
are cautioned to check the Coast Guard's web site prior to fixing or loading cargo aboard
a vessel to determine if the vessel is disqualified either specifically or as a result of
being operated by a disqualified owner or operator. In addition, shippers might wish to
consider requiring carriers to stipulate in tender offers, charter parties, contracts of
affreightment, or other documents that the vessel(s) or owner(s) or operator(s) are not
disqualified.
Carriers are cautioned to check these
lists to be sure they do not charter, relay, transship, or ship as part of a consortium,
government-impelled cargoes on a vessel disqualified either specifically or as a result of
being operated by a disqualified owner or operator.
This law does not apply to vessels
registered under the U.S.-flag. We quote from the October 3, 1998 USCG letter to Congress:
"The Coast Guard does not interpret Section 408 as applying to U.S. Flag vessels.
U.S. Flag vessels are not subject to detention under the U.S. Port State Control Program
for violations of international safety conventions."
Questions regarding cargo preference should
be directed to the Maritime Administration Office of Cargo Preference at 202-366-4610 or
email CARGO.MARAD@dot.gov. Questions
regarding disqualified vessels or owners or operators should be directed to the Coast
Guard Office of Compliance at 202-372-1251 or email:
HQS-PF-fldr-CG-3PCV@USCG.MIL.
In addition, other laws prohibit transactions with Blocked, Denied, Debarred, or Entity
listed parties. Related links to these sites may be accessed via
http://www.customs.gov/xp/cgov/export/persons_list/.
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