NEW ORLEANS – On November 2, 2022 U.S. Customs and Border Protection (CBP) Jones Act Division of Enforcement (JADE) held local training to raise awareness of the 102-year-old federal statute, officially known as the Merchant Marine Act of 1920. U.S. Coast Guard (USCG) officers, along with CBP import specialists and other personnel, were in attendance to learn the complexities of the act which governs U.S. maritime cabotage.
CBP is responsible for determining whether a voyage or activity is covered by the Jones Act, but because our coastwise trade laws involve domestic transportation, such as inland towing, ferry operations, harbor cruises, and dredging, we work daily with our USCG partners.
Vessels carrying passengers and merchandise between two points on U.S. territory (with some exceptions) must be U.S. built, U.S.-documented, and U.S.-owned, under penalty of fines. This is not unique, as most functioning countries have laws protecting shipping within their borders to protect their citizens’ businesses. Vessels that violate this law may be subject to a penalty that may be equal to the cost of the merchandise or the transportation of the merchandise, whichever is greater. Penalties can, and frequently are, mitigated down to a lesser level.
Training attendees discussed various hypothetical scenarios: It is a violation if a foreign flagged vessel transports containers from Houston to Honduras, does not discharge 10 of its containers in Honduras, and continues on to Savannah, where they are discharged?
JADE is a national unit that falls within the Office of Field Operations, and is headquartered in the historic New Orleans Custom House. It was created in 2016 due to Congressional concerns over the enforcement of the Jones Act. “Since its creation six years ago, we have levied more penalty proposals on Jones Act offenders then the previous 96 years combined,” said Michael Hebert, Supervisory CBP Officer over JADE. “The Jones Act covers more than 25,000 miles of navigable waterways and 95,000 coastal miles, so we need to raise awareness and urge industry members and others to inform us of suspected violations.”
One of the first fines levied by JADE was in Alaska, where a contract was awarded to a Canadian owned vessel to haul forestry equipment. The winning contract bid was approximately $32,000 cheaper than a coastwise qualified vessel that also bid on the contract. The contract would have been one third of the annual revenue for the qualified vessel.
On a day-to-day basis, JADE assists CBP ports on issues involving coastwise trade laws, provides outreach to our external industry partners, provides awareness training and informal preliminary findings to industry partners on coastwise trade questions.
For more information about coastwise trade or the Jones Act, contact the JADE office at email@example.com.
Allegations of violations of cabotage law can be submitted online at https://eallegations.cbp.gov.
The New Orleans Field Office covers ports of entry throughout the states of Louisiana, Mississippi, Alabama, Arkansas, and Tennessee.