Coast Guard To Reexamine Rules On Ship Repair

Because of a recent court decision, the U.S. Coast Guard will review its rules governing the extent to which U.S-flag ships can have work performed in foreign shipyards without jeopardizing the vessels' eligibility for U.S. domestic trading. Any changes in the rules would affect both U.S.-flag vessel owners and U.S. shipyards.

The decision was issued by U.S.

District Court Judge Joyce Hens Green as part of a case involving the U.S.-flag cruise ship Monterrey, which underwent an extensive refurbishment at U.S. and Finnish shipyards.

According to the Jones Act, any ships that carry cargo from one U.S.

port to another must be built in a U.S. shipyard. If these vessels undergo an "entire rebuilding," the work must also be performed at a U.S. shipyard.

Judge Green ruled that the Coast Guard has been inconsistent in its decisions involving the work carried out on U.S.-flag vessels by foreign shipyards. In the past, the Coast Guard had generally required all structural work to be performed in U.S. yards, while permitting nonstructural work to be carried out at foreign yards. Judge Green wants the agency to clearly define structural and non-structural work.

U.S. shipyards might benefit from the decision if new Coast Guard rules force owners to carry out certain ship repairs domestically rather than abroad as in the past.

Maritime Reporter Magazine, page 46,  Jul 1989

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Maritime Reporter

First published in 1881 Maritime Reporter is the world's largest audited circulation publication serving the global maritime industry.