Jones Act Waiver

[Coast Guard Dave]

For any fellow foreign built trawler owner that has dreamed of using their vessel for commercial use, there is now an option.

Background - The Jones Act was passed by the US to protect US Ship Builders, Ship Yards and American Ship Lines from foreign competition . The bill did this by not allowing foreign built vessels to be us flagged with commercial rights to participate in commerce . Recently Congress created a waiver process for small 100 ton or less vessels . This has created the option for vessels in this class to get a recreational and coastwise endorcement if the waver is granted. The waiver process takes close to 6 months and the government wants to make sure your proposed commercial use will not hurt local commercial boat owners by creating an unfair advantage. For example if you were going to purchase a small fleet of tour boats that cost half of what similar American boats would cost, the waiver would be denied . For most using the waiver option, it is granted.

The cost of the waiver is $500.00 and your vessel will need to be redocumented if the waver is granted. It will also need to show the vessel name in both sides of the bow section if it is going to operate under a coastwise endorcement. See UPV regulations (title 46) for a broader understanding of commercial requirements. Any vessel over 5 tons that functions under a coastwise endorcement must be documented. To operate under the endorcement, you or someone you approve must hold a captains license that is valid for the waters you plan to operate in.


I have provided this level of detail to give an understanding of what is involved in perusing a waiver and using it.

If anyone is interested, I can provide more information on how to start the waiver process.

Davis

 

[Arctic Traveller]

Your correct, it can be done, but it's not always as easy as you might like.* First, you can't apply until you own the boat. That means if you plan to go into the charter business with a non US built hull, you have to take a chance that you will get the waver, and buy the boat first. If the waver is denied, you will need to start over with another boat or location. Should another commercial operator decide you would be competing with them (even remotely), they can and likely will protest your application.* I know this because it happened to me.* The particular company that protested my application had a standing policy of protesting every application that included it's operating area. They employed a lawyer to write the protests, and for the most part, they were successful.*

Secondly, make sure to look into charter insurance prior to doing all this.* It is often times difficult to get adequate insurance if your operating in what insurance companies deem to be high risk areas, or if you have a boat in less than excellent condition, or made of wood. What the insurance companies tell you may influence your choice of boat.* If you hope to do dive charters, it may be even harder (IE more expensive) to get insurance.*

The best hope of developing a viable charter business is to start with a solid business plan.* If you have never written a business plan, look online, buy books and find someone with experience to review it.* Banks will want to review your plan if you tell them you plan to charter.* If you do plan to get bank financing, make sure the banks you choose to apply with even offer loans for charter boats (it's normally a commercial loan as opposed to a personal loan). Often times they don't want to finance liveaboards either, so do your homework first.

The charter business can be very rewarding and fun, but prior to spending any money, it's best to do a lot of homework to learn about as many pitfalls as possible.* Lots of folks have gotten into the business and had a great time.* It's a dream to make money doing something you love, and lots of people have been successful.* Still, someone once told me the best way to make a small fortune in the charter business is to start with a large one, but sometimes just breaking even is enough. Go for the dream, but be aware..........Arctic Traveller

Trawler training at www.arctictraveller.com

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[SCOTTEDAVIS]

It took me 7 weeks and cost under <$600

I was told that unless requesting one for AK that it is no problem, it was painless and no legal help was needed.

The documentation went fast as they process commercial applications in a couple of weeks as opposed to the 6 months recreational applications are taking.

Regards,

 

[Pau Hana]

For any fellow foreign built trawler owner that has dreamed of using their vessel for commercial use, there is now an option.

Background - The Jones Act was passed by the US to protect US Ship Builders, Ship Yards and American Ship Lines from foreign competition . The bill did this by not allowing foreign built vessels to be us flagged with commercial rights to participate in commerce . Recently Congress created a waiver process for small 100 ton or less vessels . This has created the option for vessels in this class to get a recreational and coastwise endorcement if the waver is granted. The waiver process takes close to 6 months and the government wants to make sure your proposed commercial use will not hurt local commercial boat owners by creating an unfair advantage. For example if you were going to purchase a small fleet of tour boats that cost half of what similar American boats would cost, the waiver would be denighed . For most using the waiver option, it is granted.

The cost of the waiver is $500.00 and your vessel will need o be redocumented if the waver is granted. It will also need to show the vessel name in both sides of the bow section if it is going to operate under a coastwise endorcement. See UPV regulations (title 46) for a broader understanding of commercial requirements. Any vessel over 5 tons that functions under a coastwise endorcement must be documented. To operate under the endorcement, you or someone you approve must hold a captains license that is valid for the waters you plan to operate in.


I have provided this level of detail to give an understanding of what is involved in perusing a waver and using it.

If anyone is interested, I can provide more information on how to start the waiver process.

Davis

Could you forward the specific CFRs to me? Thanks!

 

[SCOTTEDAVIS]

Could you forward the specific CFRs to me? Thanks!

https://www.cbp.gov/sites/default/files/documents/merchandise_3.pdf


http://www.upa.pdx.edu/IMS/currentprojects/TAHv3/Content/PDFs/Jones_Act_1920.pdf


http://www.maritimelawcenter.com/html/the_jones_act.html

 

[Sailor of Fortune]

Did you document as "Coastwise trade " or pleasure only?

 

[SCOTTEDAVIS]

Coastwise trade, commercial. No commercial fishing or salvage, 12 passengers or less for hire.

 

[jungpeter]

Arctic Traveler's response is spot-on for those that wish to obtain a Jones Act waiver for AK charter use. The charter operators in AK are very protective of their home waters, and don't want competition from outsiders, particularly from foreign-built hulls. And successfully appealing their protests is (in my opinion) a non-starter.

I can only speculate on the reason(s) for the blanket rejection of requests for Jones Act exemptions by Alaskans, but suspect it has much to do with perceived (and probably very real) encroachment and exploitation of AK waters by non-native Alaskans for the purpose of fishing.

And I'm pleased to see Arctic Traveler's response, as he's obviously in AK, and perfectly placed to comment on this topic. What the Jones Act has meant to AK is an historically fascinating topic, well outside the bounds of this forum, but one I'd love to sit in on.

Foreign-built charter hulls in AK? Fugetaboutit.

Pete

 

[OkSkipper]

This administrative process has been in effect for about 15 years. I got it in 2001 for a Taiwan built sailboat.

 

[markpierce]

Good thing Jones Act doesn't affect recreational boats. Otherwise, many of us (including me) wouldn't have their current boat. One benefit of the Act: our January round trip San Francisco to Hawaii and return will pause in Ensenada Mexico.