U.S. Vessel Security Plan Requirement
 
November 10, 2003
 

Congress enacted the Maritime Transportation Security Act (MTSA) on November 25, 2002. Among other things, the MTSA requires vessels operating on waters of the United States to prepare security plans and to submit those plans to the U.S. Coast Guard.

At a diplomatic convention sponsored by the International Maritime Organization (IMO) in December 2002, delegates adopted amendments to the International Convention for the Safety of Life at Sea (SOLAS Convention). The major addition to the SOLAS Convention was the International Ship and Port Facility Security (ISPS) Code. Among other things, the ISPS Code requires ships engaged in international commerce to prepare security plans and to submit those plans to their respective flag administration (or designated Recognized Security Organization (RSO)).

The U.S. Coast Guard interpreted the two requirements as complementary. When the agency issued its interim regulations implementing the MTSA, it exempted foreign vessels subject to SOLAS that carried a valid International Ship Security Certificate (ISSC). Under the ISPS Code, the ISSC indicates that the ship has implemented its approved ship security plan.

Members of Congress expressed dissatisfaction with the Coast Guard approach. They contended that the MTSA required virtually all vessels to submit security plans for Coast Guard approval. As Representative Oberstar (D-MN), one of the principal authors of the MTSA, stated: “Nothing in the [MTSA] authorizes the Coast Guard to delegate its national security responsibilities to a foreign country.” The House Subcommittee on Coast Guard and Maritime Transportation conducted hearings in June and July 2003 where members criticized the agency’s approach as inconsistent with the statute.

The Coast Guard contended, with much justification, that a multilateral approach to maritime security was better than a unilateral approach, since the maritime industry is truly multilateral and the terrorist threat is international in nature. Unfortunately, the Coast Guard arguments were too late. The MTSA had already been enacted and the Coast Guard had made no serious effort to have the law amended to delete this unique requirement.

A foreign ship owner that fails to comply with the unique security plan requirements of the MTSA runs the risk of not being able to limit its liability in the event of a terrorist attack involving the vessel in U.S. waters. This is because, under U.S. law, the owner must show compliance with applicable laws and regulations before limitation of liability will be allowed. The fact that the Coast Guard has continually stated that it does not want foreign owners or operators to submit their security plans to it is of little moment, as the agency lacks authority to overrule a federal statute.

The U.S. House of Representatives recently adopted a bill entitled the Coast Guard and Maritime Transportation Act of 2003. The bill includes a provision that would amend the MTSA to make it even clearer that virtually all vessels (foreign as well as domestic) operating on U.S. waters are to submit security plans to the Coast Guard for approval. The bill also authorizes the agency an additional $70 million for conducting the mandated port security plan approvals. It is largely unimportant when, or if, these provisions are enacted into law. These provisions demonstrate yet again the intent of Congress to require foreign vessels to submit security plans to the Coast Guard for approval and make it even easier for a court to justify denial of limitation of liability for any ship owner who fails to submit such a plan.

It is therefore strongly recommended that owners and operators of non-U.S. ships that expect to call at U.S. ports prepare security plans in accordance with the MTSA and submit those plans to the U.S. Coast Guard. Ideally, those plans should be submitted prior to January 1, 2004. In any event, the plans should be submitted to the U.S. Coast Guard and fully implemented not later than July 1, 2004, irrespective of the public pronouncements of that agency. Fortunately, the substantive differences between the requirements of the MTSA and the ISPS Code are minimal.

If you have questions regarding the above information or other matters related to maritime security, please contact Brian Starer at 212-513-3433 (bstare@hklaw.com) or Dennis Bryant at 202-828-1865 (dbryant@hklaw.com).