Riverbend Marine Service Auction

Friday, May 12, 2017

Customs Withdraws Proposal to Revoke Jones Act Waivers

By Mark Edward Nero

US Customs and Border Protection announced on May 10 that it is withdrawing a January proposal to revoke waivers that have been previously granted to oil and gas companies.

The proposal, which was issued two days before Donald Trump’s inauguration as President, would have potentially been devastating for foreign-based oil and gas companies that move product in and around the United States.

The Jones Act, passed in 1920, prohibits foreign flagged vessels from transporting merchandise between points in the United States and mandates that vessels transporting such merchandise be owned and operated by American companies and be staffed by crews of Americans. Customs has provided waivers to the rule for about 40 years.

The oil and gas industry, for the most part, was pleased by the news.

“By rescinding the proposal CBP has decided not to impose potentially serious limitations to the industry’s ability to safely, effectively and economically operate,” said Erik Milito, director of upstream and industry operations for the American Petroleum Institute.

However, a group representing US companies operating offshore service vessels, the Offshore Marine Service Association, issued a statement calling Customs’ reversal deeply disappointing.

“This decision hurts American workers, vessel owners and US shipbuilders,” the association said in a statement. “We call on President Trump to take immediate action and correct these damaging rulings that have continued to put foreign companies first and American companies and workers last.”

Customs said that it has received over 3,000 comments about the proposal before it was pulled, with many in opposition to the possible waiver revocation.