There are certain specific regulations that United States law has in place for the sake of domestic commerce. In the interest of prioritizing American vessel-owners and United States-built vessels, for example, the Maritime Administration has certain protections in place to regulate who has primer access to commerce between domestic ports. It’s because of this that certain vessel-owners whose ships were not built in the United States can have trouble gaining access to these trade routes. Don’t worry, however, because, in anticipation of these problems, there are ways for these owners to obtain waivers for these restrictions and participate in domestic commerce with their foreign vessel. This will involve what is known as the MARAD waiver which, in turn, relates to the Jones Act and the Merchant Marine Act of 1920.
The Merchant Marine Act of 1920
First of all, we need to discuss what the waiver is for in the first place. So, in 1920, the United States passed the federal statute known as the Merchant Marine Act. Among many of its other purposes, this law is meant to regulate maritime commerce in American waters and between American ports. This act was passed by Congress in an effort to ensure a vibrant maritime industry in the United States by way of the commercial vessels that navigate between American ports with goods and passengers. Additionally, the law also defines certain seaman’s rights, having effects on national security, shipbuilding, and other areas of American commerce.
The Objective of the Merchant Marine Act of 1920
Sometimes we are so wrapped up in the effects of the laws in place that we consider why they were established in the first place. The following is an excerpt from the preamble to the Merchant Marine Act of 1920, stating its purpose and objective.
“It is necessary for the national defense and for the proper growth of its foreign and domestic commerce that the United States shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of war or national emergency, ultimately to be owned and operated privately by citizens of the United States; and it is declared to be the policy of the United States to do whatever may be necessary to develop and encourage the maintenance of such a merchant marine, and, in so far as may not be inconsistent with the express provisions of this Act, the Secretary of Transportation shall, in the disposition of vessels and shipping property as hereinafter provided, in the making of rules and regulations, and in the administration of the shipping laws keep always in view this purpose and object as the primary end to be attained.”
The Jones Act
Now, there is a vital component of the Merchant Marine Act of 1920, and that is Section 27. This section of the Merchant Marine Act is known as the Jones Act, and it deals with coastwise trade, requiring that all goods transported by water between United States ports be carried on U.S.-flag ships that are built in the United States, owned by United States citizens, and crewed by United States citizens and permanent residents. This law is in place in order to foment the American domestic industry and improve upon the conditions for national commerce. However, it is, by definition, very restrictive, which is why there are waivers in place for foreign vessels that won’t harm the domestic market.
What is the MARAD Small Vessel Waiver Program?
While this act is in place in order to create better conditions for American commerce, some insist that there are still instances in which foreign-built vessels can still contribute to American commerce, especially when they serve as commercial passenger vessels. This is why the Jones Act contains the Passenger Vessel Services Act, which authorizes the Maritime Administration (MARAD) to waive the United States-built requirement under certain circumstances. This is known as the Small Vessel Waiver or the MARAD Waiver. This is a very helpful way for those who wish to carry out commercial endeavors between American ports by way of foreign vessels.
Who is Eligible for a MARAD Waiver?
According to the Maritime Administration of the United States Department of Transportation, there are certain requirements for a vessel to qualify for the small vessel waiver program. In order to be eligible for the MARAD waiver, the vessel must fulfill the following points:
- The vessel must be owned by a United States citizen or organization.
- The vessel must be at least three years old.
- The vessel must only intend to carry passengers.
- The vessel can’t carry more than twelve passengers at a time when in service.
- The vessel must satisfy a series of separate United States Coast Guard requirements.
It’s important to note that marine diesel engines certified by the United States Environmental Protection Agency as recreational engines are often prohibited from being used for commercial purposes.
The Five Steps to Apply for a MARAD Waiver
In order to obtain a MARAD waiver, the applicant in question needs to go through these five easy steps:
- First of all, the owner of the vessel has to submit an application for the small vessel waiver online or by traditional mail. We at the Maritime Documentation Center make it all the easier for you to submit your application for a waiver through our website.
- After a certain period of time, MARAD will publish a public notice in the Federal Register for thirty days. This will note the vessel and its intended use.
- During this public notice period, MARAD will use all the sources available to determine whether the issuance of a waiver will in some way negatively impact American vessel builders or the coastal trade business of those who use these vessels.
- If MARAD doesn’t anticipate a negative impact, then they will issue the waiver. In fact, they will usually approve most of the waiver requests they receive.
- This waiver will then become a part of the vessel’s documentation and will stay with it even if it’s later sold. After receiving a waiver, applicants should also file for a Coastwise Trade Endorsement for the passenger trade with the United States Coast Guard if it doesn’t already have this endorsement.
How to Apply for the MARAD Waiver Online
There are two ways in which one can apply for the MARAD waiver, online and by mail. In order to apply for the waiver online, you first need to right the MARAD guidance document on their website in order to make sure that you are eligible for a Small Vessel Waiver. After this, you have to submit the MA-1023 online form and pay the fee in order to submit it and be considered for it. In order to make things easier for you, you can apply for the form with our help here at the Maritime Documentation Center. We have the form right here on our website and, once you submit it, we can make sure that all the information is correct before passing it along to the Maritime Administration. This way, you can avoid having the form returned for some sort of error.
Applying for the Waiver by Mail
While it is recommended by both MARAD and us here at the Maritime Documentation Center is that those interested in applying do so via the online form, there is also a mailing option. If for, whatever reason you can’t submit the form online, you can submit the form by way of traditional mail. You just need to print out form MA-1023, fill out all required fields, and mail the completed form to:
1200 New Jersey Ave SE
Washington, DC 20590
Attn: Bianca Carr W23-465
Once you do this, you will have to pay through that specific portal on pay.gov. However, we recommend that you fill out the form with the help of our convenient platform. This way, you can avoid having to reapply because of some mistake and expedite the overall process.
Common Denials and Exceptions
When it comes to the MARAD Waiver, the Maritime Administration has some advice in regards to common denials and exceptions that are characteristic of the application process.
- A MARAD small vessel waiver does not waive any sort of vessel documentation, inspection, or manning requirement mandated by the United States Coast Guard law.
- It’s good to remember that the Maritime Administration no longer issues any waivers for all coasts of the United States. As part of the application, the vessel owner needs to specify all states of the intended operation. There is a dedicated space for the geographic location of the vessel where you can list all the relevant states.
- There are certain specific areas where owners of United States-build vessels that operate in this location have proven to the Maritime Administration that the introduction of foreign-built vessels would result in an undue adverse effect in the domestic commerce of the area. Because of this, MARAD will not provide waivers for these specific areas. For more information about this, contact the Office of Cargo and Commercial Sealift.
- Certain vessels that carry out activities such as carriage of cargo, towing, dredging, salvage, and commercial fishing do not qualify for a small vessel waiver. Sportfishing vessels may be permitted just as long as the caught fish are not sold commercially.
- If at any point the Maritime Administration determines that there was some sort of fraud incurred upon during the application process, they can and will revoke a waiver.
Important Notice About Marine Diesel Engines
It’s important to note that certain marine diesel engines that are certified by the United States Environmental Protection Agency as recreational engines are, in some cases, restricted from being used for commercial purposes. If you would like to learn more about the specifics of this mandate and what vessels are affected by it, you can visit the EPA’s Domestic Marine Diesel Engine site. Here, you will find specific regulations in terms of engine standards, emissions, gas reporting, air pollution, and other aspects of certain vessels. It’s very important to take this into account if you are looking to convert a vessel that you use for recreational purposes into a commercial one.
Applying for the MARAD Waiver
When it comes to applying for forms with the United States Coast Guard and the Department of Transportation’s Maritime Administration, you will probably find that things are often more complicated than they should be. The good news is that you don’t have to do any of these alone. We at Vessel Documentation Online can help you with filling out and filing every form you might be having trouble with. You can find all the necessary forms on our homepage and, should you need help, you can reach out to us. Give us a call at 1-866-981-8783 or email us at info@vesseldocumentation.us with your questions.