Maritime Promotional Programs » Cabotage
Section 27 of the Merchant Marine Act of 1920, known as the Jones Act, stipulates that operations in the United States coastwise trade, intercoastal and noncontiguous trades (including Alaska, Hawaii, and Puerto Rico) are to be reserved for U.S.-built and U.S.-owned ships manned by U.S. citizens.
The Passenger Vessel Services Act of 1886 (46 U.S.C. Sec. 289) prohibits the transport of passengers between ports or places in the United States by a “foreign vessel” under penalty of $200. Exemptions to this rule include the U.S. Virgin Islands which are not covered by U.S. cabotage policy unless otherwise declared by presidential proclamation, an allowance for foreign vessels to transport passengers between Puerto Rico and other U.S. points if no eligible U.S. vessel offers such service and “cruise to nowhere” which depart a U.S. port and return to the same port without touching another port, U.S. or foreign and when a foreign vessel carrying passengers between U.S. ports calls at a distant foreign port between U.S. port calls.
The Act of December 27, 1950 provides for an administrative waiver whenever such waiver would be in the best interest of the national defense. In enacting the Coast Guard Authorization Act of 1998, the 105th Congress further established an administrative process for Jones Act waivers. The Secretary of Transportation, under certain conditions, is authorized to issue certificates of documentation with an endorsement for employment in the coastwise trade to certain small passenger vessels and uninspected passenger vessels carrying no more than 12 passengers for hire. The waiver, which is subject to notice and public comment, may not be granted if it would adversely affect U.S. shipbuilders or the coastwise trade business of any person who employs U.S.-built vessels. This administrative process is not applicable to larger passenger vessels and to cargo vessels. Any other waivers of the Act must be obtained legislatively.