Can I use a foreign-built boat in a charter fishing business?

I own a foreign-built motor yacht that I would like to use in a charter fishing business, and I have a few questions about some of the legal issues I will face. I understand that federal law currently requires a charter boat to be built in the United States, but I read a news report that Congress is considering a repeal of that law. Is this correct? If the restriction is still in effect, would it apply to a “six-pack” charter? Also, I have heard that commercial fishing boats are subject to the same regulations but that Canadian boats routinely participate in commercial fishing in California. Do commercial fishing boats qualify for an exception to the law?

The foreign-build restrictions referred to by our reader are set forth in certain provisions of the Merchant Marine Act of 1920, commonly known as the “Jones Act.” The Jones Act was enacted in 1920 to protect the rights of killed and injured maritime workers and their families, and to protect U.S. maritime industries from foreign competition.

The Jones Act requires any vessel that participates in “coastwise trade” to be constructed in the United States and manned by an American crew. Coastwise trade is the carriage of passengers or cargo within a U.S. port or from one U.S. port to another. This is viewed by some as unnecessary protectionist legislation and the law has come under attack in recent years, most notably by Sen. John McCain of Arizona.

McCain has proposed numerous bills to repeal the Jones Act. His most recent attempt was made through a proposed amendment to the Keystone XL oil pipeline bill. That legislation has no relationship whatsoever to maritime commerce, but Washington often works in mysterious ways. The bill passed the Senate without McCain’s amendment, much to the relief of the American maritime industry. So, the law is still in effect.

The Jones Act applies to all passengers and cargo vessels, so our reader won’t be able to escape the foreign-build restrictions by limiting his business to six-pack charters (charters that carry six or fewer paying passengers). He may, however, qualify for a waiver through the Small Vessel Waiver Program administered by the United States Maritime Administration (“MARAD”). Information regarding a waiver is available on MARAD’s web site at marad.dot.gov (follow the links to the Small Vessel Waiver Program). Ironically, the legislation that gave rise to the Small Vessel Waiver Program was initiated and sponsored by McCain.

Similarly, our reader’s concern about commercial fishing vessels is misplaced. Commercial fishing vessels, like passenger sportfishing vessels, must comply with the foreign – build restrictions of the Jones Act. And, since the MARAD waiver applies only to passenger vessels, it is not available for owners of foreign built commercial fishing vessels.

Our reader is correct in observing that Canadian-built commercial fishing vessels are fishing commercially in California. The column is printed in a recreational boating publication so I won’t spend a lot of time on this issue, but it should be discussed nonetheless. This illegal practice has increased recently, and it is made possible when the owner of a foreign built boat registers the boat with the California DMV instead of the Coast Guard. This is made possible through the use of falsified documents provided to the owner by the Canadian boat builder. The DMV does not monitor the requirements of the Jones Act, and the boats are therefore able to operate “under the radar” (pardon the pun). But the practice is illegal nonetheless.

The United States is one of many nations that protects its domestic transportation industries through “cabotage” laws, requiring trade between domestic ports to be conducted on aboard boats that are registered and built domestically, and these laws are not likely to change any time soon. A small vessel operator may nonetheless work within the system through the waiver program discussed above.