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What is a Jones Act waiver?

On Behalf of | Jan 5, 2022 | Admiralty & Maritime Defense

As you undoubtedly already know, the Merchant Marine Act of 1920, commonly known as the Jones Act, requires that any cargo transported by water between U.S. ports must ship on vessels built, owned and registered in the United States. The ships’ crews must likewise consist of Americans.

The U.S. Department of Transportation Maritime Administration reports, however, that these restrictions can be waived to allow foreign-flag vessels to transport such cargo under certain circumstances.

National defense

The only basis for waiving the Jones Act is the existence of an “interest of national defense.” For instance, the Secretary of Homeland Security usually issues waivers after a natural disaster, such as a hurricane, that negatively impacts coastal areas of the country. As another example, earlier this year the Biden administration approved a Jones Act waiver to address the fuel shortage brought about by the ransomware attack that shut down the Colonial Pipeline. Given that Colonial Pipeline is the East Coast’s most important fuel supply line, the waiver allowed two refineries, Citgo and Valera, to temporarily ship petroleum products from Louisiana to New Jersey on foreign-flag vessels.

Two waiver processes

While only the Secretary of Homeland Defense can issue a Jones Act waiver, there are two processes by which to initiate a waiver request.

Usually, the Secretary of Defense initiates the waiver process himself or herself. U.S. Customs and Border Protection, the nation’s largest federal law enforcement agency of the Department of Homeland Security, then immediately waives the Jones Act.

In the other type of waiver process, a non-Department of Defense entity, i.e., a civilian entity, can submit a waiver request. Such requests must state the nature of the alleged interest of national defense affected. The Department of Homeland Security screens these requests and makes a rapid determination as to the sufficiency of the applications.