Tuesday, April 11, 2017

Alaska Oil Company to Pay Record Jones Act Violation Fine

By Mark Edward Nero

Anchorage-based natural gas and oil production company Furie Operating Alaska LLC has agreed to pay a record $10 million to satisfy a civil penalty originally assessed against it by US Customs and Border Protection for violating the Jones Act, the Department of Justice has announced.

According to the acting US Attorney for the District of Alaska, Furie was penalized when it transported the Spartan 151 jack-up drill rig from the Gulf of Mexico to Alaska in 2011 using a foreign flagged vessel without acquiring a waiver of the Jones Act from the Secretary of Homeland Security.

The settlement, which was announced April 4, resolves a civil lawsuit filed by Furie in 2012 challenging the assessment of the civil penalty.

The Jones Act, passed in 1920, prohibits a foreign vessel from transporting merchandise between points in the United States. A violation may result in the assessment of a civil penalty equal to the value of the merchandise. Waivers can be obtained from the Secretary of the Department of Homeland Security in limited circumstances, specifically when it is in the interest of national defense, following a determination that there is no US vessel available to engage in the transport.

“Resolution of this case demonstrates that the Jones Act will be actively enforced and that an intentional violation will not be rewarded,” the Department of Justice said in a statement.