Jones Act Waiver Issued in Response to Iran Conflict: Legal Analysis and Implications

According to guidance issued by U.S. Customs and Border Protection (CBP) on March 17, 2026, the U.S. Department of Homeland Security (DHS) granted a limited waiver of 46 U.S.C. § 55102 (commonly known as the Jones Act), in accordance with 46 U.S.C. § 501(a), following a request from the U.S. Department of War (DOW). The waiver is valid for a 60-day period and will expire on May 17, 2026, at 11:59 p.m. EDT.

This guidance follows a social media post in which the Trump Administration announced a 60-day waiver of the Jones Act. The White House press secretary announced that President Donald Trump's decision to grant a 60-day Jones Act waiver was in response to supply chain disruptions arising from the ongoing conflict with Iran and is intended to address short-term disruptions in the oil market while the U.S. military continues to pursue the objectives of Operation Epic Fury. This action will allow at least 659 potentially covered products to flow freely between U.S. ports for 60 days on foreign-flag vessels. The list references the Harmonized Tariff Schedule (HTS) number for covered products, which is critical in assessing if a particular product is covered, to include potential renewable fuels. Importantly, the CBP guidance does not restrict the waiver by location or route, which means it allows trade between points in U.S. states – including Alaska and Hawaii – without limitations.

At this time, a copy of the waiver request has not yet been publicly released, as is customary in Jones Act waiver requests from DOW, which could include any findings that that there were insufficient qualified vessels to meet the needs of national defense without such a waiver.

Background: The Jones Act

The Merchant Marine Act of 1920, commonly known as the Jones Act, is a century-old federal statute that requires goods shipped between U.S. ports to be transported on vessels that are U.S.-built, U.S.-flagged and predominantly U.S.-crewed. The Jones Act significantly limits the number of vessels – including tankers – available for domestic maritime shipments, though it enjoys strong support from domestic maritime industry unions and shipbuilders.

Current Market Conditions

The waiver announcement comes amid significant market disruption following U.S. and Israeli military operations against Iran, which commenced on February 28, 2026. The conflict has effectively closed the Strait of Hormuz – a critical waterway and strategic shipping choke point through which approximately one-fifth of global oil and liquefied natural gas supplies transit. Tangentially, U.S. gasoline prices have surged and fertilizer supplies have been disrupted, raising concerns among agricultural stakeholders.

Legal Framework for Jones Act Waivers

Under 46 U.S.C. § 501, the Jones Act's requirements may be waived under certain limited circumstances. Notably, such waivers are rare, as the sole statutory basis for an exemption is the "interest of national defense." Generally, the waiver process differs depending on whether the request originates from the DOW or civilian entities. (See Holland & Knight's previous alert, "Jones Act Waivers Following Natural Disasters," September 1, 2021).

DOW Requests

Under 46 U.S.C. § 501(a), for waivers "on request of the Secretary of Defense" (or War), as apparently done in this instance, CBP has been delegated authority to grant immediate waivers. On request of the Secretary of Defense, the head of an agency responsible for the administration of the navigation or vessel-inspection laws shall waive compliance with those laws to the extent the Secretary of Defense considers necessary "in the interest of national defense to address an immediate adverse effect on military operations." Although the official justification has not been publicly disclosed, the White House Office of Public Liaison stated that the waiver is intended to "help ensure that U.S. airfields and military installations are properly supplied, particularly from the U.S. Gulf Coast, so that the U.S. can avoid a shortfall that would adversely affect military operations." This statement appears to address the necessary statutory requirements for issuing the waiver.

Under the governing statute, within 24 hours of submitting a request, the Secretary of Defense shall provide a written explanation to the U.S. House of Representatives Committee on Transportation and Infrastructure and House Committee on Armed Services, as well as the U.S. Senate Committee on Commerce, Science, and Transportation, and Senate Committee on Armed Services. This explanation must detail the circumstances necessitating the waiver in the interest of national defense and confirm that there are not enough qualified vessels available to fulfill national defense requirements without this waiver.

Reporting and Transparency Requirements

The waiver process includes several transparency mechanisms.

Specifically, 46 U.S.C. § 501(c) mandates that, within 10 days after a vessel's voyage ends under a Jones Act waiver, the owner or operator must submit a report to the maritime administrator, who must publish the report on the Maritime Administration's website within 48 hours of receiving it.

In this instance, CBP requests that any member of the trade community who intends to conduct transportation of potentially covered commodities on a foreign-flag vessel pursuant to this waiver should notify CBP with the vessel name, commodity and relevant HTS code, carrier, ports, and dates of departure and arrival.

Client Guidance: Understanding Waiver Coverage and Compliance

Clients should understand the scope and importance of this waiver, particularly with respect to the commodities covered. The waiver applies to at least 659 potentially covered products, primarily targeting goods critical to national defense and energy security during the current crisis. Although the Federal Maritime Commission (FMC) has not usually been involved with Jones Act waivers and related matters, its scope of maritime engagements is expanding. As a result, just as the FMC has recently investigated flagging practices of foreign registries, it is possible that the FMC is now examining this issue more closely.

To take advantage of this waiver while maintaining compliance, clients should consider the following steps:

1. Verify Scope of Trade and Commodity Coverage. Before utilizing foreign-flag vessels, confirm that your specific commodity falls within the scope of the waiver. Cross-reference your products against the HTS codes identified by CBP as potentially covered. Potentially affected stakeholders should consider seeking advice from legal counsel to best ensure interpretations are correct, as penalties for noncompliance can be severe.
2. Comply with Reporting Requirements. As requested by CBP, notify CBP of respective transportation under the waiver with the requisite details outlined in the CBP guidance (CSMS # 68096516). Ensure your organization has processes in place to meet requisite deadlines.
3. Maintain Documentation. Keep detailed records of all voyages conducted under the waiver, including contracts, bills of lading, vessel certifications and CBP correspondence. This documentation will be essential for post-voyage reporting requirements and any future audits, in particular with the potential multiyear lookback under the relevant statute of limitations related to the coastwise trade.
4. Monitor Expiration Date and Updates. The waiver expires on May 17, 2026, at 11:59 p.m. ET. Plan voyages accordingly to ensure they commence or are completed within the waiver period and monitor for any additional guidance from the White House or CBP, as well as any extensions or modifications of the scope of the waiver and potentially covered products.
5. Assess Liability and Contractual Implications. Review existing shipping contracts and charter agreements to determine how utilization of foreign-flag vessels may affect liability, insurance coverage and contractual obligations.

Companies in the shipping, energy and agricultural sectors should closely monitor developments and assess whether their operations may benefit from the temporary waiver. Holland & Knight's International Trade Group, Maritime Team and Public Policy & Regulation Group are available to advise clients on the implications of this waiver and assist with any related regulatory or compliance matters. Please contact the authors with any questions.

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, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.