DHS Extends Jones Act Waiver to Sept. 22 and Broadens Geographic Area Covered
Customs and Border Protection Issues Q&A Guidelines
Acting Secretary of Homeland Security Elaine Duke has issued an extension of the original Sept. 8 Jones Act waiver to Sept. 22. The extended waiver, dated Sept. 11, 2017, and posted by the Department of Homeland Security (DHS) on Sept. 13, allows foreign or U.S. non-coastwise eligible tankers and barges to carry refined petroleum products – including gasoline, diesel and jet fuel – between U.S. ports in response to hurricanes Harvey and Irma, provided the vessels commence loading by Sept. 22 and arrive at the destination port by Sept. 30. The Sept. 11 expanded scope applies retroactively to Sept. 8.
The Secretary has also significantly expanded the geographic scope of the waiver. The original waiver covered shipment of products from "New York, Pennsylvania, Texas, and Louisiana to South Carolina, Georgia, Florida, and Puerto Rico." The expanded waiver covers shipments of products from "New York, New Jersey, Delaware, Maryland, Pennsylvania, New Mexico, Texas, Louisiana, Mississippi, Alabama, and Arkansas to Florida, Georgia, South Carolina, North Carolina, Virginia, West Virginia, and Puerto Rico."
On Sept. 15, U.S. Customs and Border Protection (CBP) issued Q&A clarification and guidelines on the timing and geographical scope of the Jones Act waiver. Most notably, CBP confirmed clearly that a shipment will qualify provided the vessel has commenced loading by 11:59 p.m. local time on Sept. 22. The vessel must arrive at the discharge port by 11:59 p.m. local time and request a berth, and may unload after Sept. 30 as long as it meets the foregoing requirements; however, the vessel may not proceed to a different discharge point after Sept. 30.
One of the major unknowns about the original waiver was whether it was limited to vessels physically loading and discharging in a port located in one of the named states, or if it extended to vessels loading cargo that originates in or is destined for a named state but is physically loaded or discharged in another state not on the list. The addition of several states that have no deepwater ports (e.g., Arkansas and West Virginia) and that have no marine ports at all (New Mexico) suggested that the cargo origin rather than the state of the load port is what governs. However, to the contrary, CBP has stated that the vessel must load (and by implication must discharge) at a port in a listed state.
CBP has also clarified that the waiver covers all refined products, not just gasoline, diesel and jet fuel.
CBP has also issued two administrative bulletins – a Jones Act Waiver Guidance Update and an Update for Vessel Entrance and Cargo Clearance of Jones Act Waivers – asking persons seeking waivers or who have already booked non-Jones Act vessels in reliance on the waivers to contact CBP, but these notices do not provide any details as to CBP's interpretation of the current waiver terms and conditions. In its Q&A, CBP states that carriers and shippers are not obligated to make any additional reports for waiver compliance purposes beyond the normal requirements for such movements.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.