Signals

Professional Mariner|April 2020

Signals
Jones Act ruling plagued by ‘potential loopholes,’ industry groups say
Sam Bojarski

A recent Jones Act ruling by U.S. Customs and Border Protection (CBP) holds the promise of generating more work for U.S.-flagged vessels in Gulf of Mexico oil fields, but it also contains “potential loopholes” that could mitigate the gains, according to industry officials.

For decades, foreign-flagged dive boats, work barges and other vessels have serviced oil installations off the U.S. Gulf Coast, often with gear loaded at American ports. That activity could decline this year, however, due to CBP’s new interpretation of what constitutes “merchandise” and “vessel equipment.”

While the Jones Act limits the transportation of merchandise between domestic coastwise points to U.S.-flagged vessels, CBP has for decades defined certain items used in oil and gas operations as vessel equipment that is not subject to the restrictions. The distinction is important to offshore operators, as foreign vessels are typically less expensive to hire than U.S.-flagged vessels.

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April 2020