Civilian Agencies

The Civilian Agencies team works with all government-impelled cargo that is (1) not covered under the Military Cargo Preference Act of 1904, essentially Department of Defense (DOD) cargo, or (2) not covered under the Agricultural Food Aid Program.

The team works with the private sector shippers, suppliers and ocean carriers, as well as applicable civilian Government Agencies to assist all parties with their compliance with the applicable Federal legislation on cargo preference.

The Cargo Preference Act of 1954 (P.L. 83-664), as amended, applies to all government-impelled cargo moving in international ocean trade. It requires that at least 50 percent of the gross tonnage of all U.S. Government-impelled cargo be transported on privately owned, U.S.-flag commercial vessels. The "at least 50 percent" requirement is applicable to the extent such vessels are available at fair and reasonable rates, as determined by the Maritime Administration

Government-impelled cargo is defined as cargo that is moving either as a direct result of the U.S. Government's involvement or indirectly due to financial sponsorship of a Federal program or under a guarantee provided through the Federal Government.

It is the responsibility of each Department or Agency to ensure it and its contractors comply with the Cargo Preference Act of 1954.  One of the prime methods to accomplish this is for the Agency or Department involved to have the appropriate clauses inserted in their program contracts and documentation.

The Cargo Preference Act of 1954 is administered by all Departments and Agencies, other than Department of Defense, under the Federal Acquisition Regulations as set forth in 48 CFR Subpart 47.5 "Ocean Transportation by U.S.-flag Vessels."

Regulations require that documentation on all government-impelled cargo moves must be reported to the Maritime Administration within 20 working days from date of loading on all shipments loaded from the United States and 30 working days for shipments loaded outside the United States.  The reporting requirement applies whether the cargo moves on a foreign-flag or U.S.-flag vessel. A copy of the ocean carrier's bill of lading, certified onboard, with rates and charges, is considered sufficient to meet the reporting requirements.

Certain cargoes generated by the Export Import Bank (Ex-Im Bank) are required by Public Resolution 17 of the 73rd Congress as approved on March 26, 1934, to be carried 100 percent on U.S.-flag vessels.

PR 17 is implemented by the Export Import Bank under regulations set forth in 12 CFR 402.3 "Marine Transportation and Insurance(a) Marine Transportation."

Loans
All direct loans generated under Export Import Bank financing are to be shipped exclusively on U.S.-flag vessels under PR 17 Regulations.

Guarantees
Cargo generated under Export Import Bank guarantees are to be shipped exclusively on U.S.-flag vessels provided the guarantee amount is over $10 million or if the term of the guarantee is over 7 years.

Waivers
Requests for Waivers under PR 17 may be submitted to the Maritime Administration, an agency of the U.S. Department of Transportation. Waivers can be obtained for a variety of reasons (e.g., if a U.S. vessel is unavailable or unsuitable). If a waiver is obtained, goods shipped on vessels of non-U.S. registry are eligible for financing by Ex-Im Bank.

Types of Waivers include:

Statutory - Non availability

General - Special treaty agreement for recipient nation to carry up to 50%

Compensatory - Allows for compensatory make-up shipments where there are extenuating circumstances

Conditional - Issued primarily for over-dimensional cargo and specialty project cargo, on a long-term basis but subject to review if conditions change

To obtain more detailed information on the PR 17 program and particularly on the types of waivers listed above, please visit the PR 17 section of our web page.