Avoiding the Lure of the Sirens' Lair: Prohibitions Against the Shipment of Merchandise in Coastwise Trade Aboard Foreign Flagged Vessels

The United States stringently controls the shipment of cargo between domestic ports aboard non-qualified coastwise vessels. The United States' maritime protectionist laws, or cabotage laws, are codified in Section 27 of the Merchant Marine Act of 1920 commonly known as the Jones Act. These provisions are applicable to the transportation of merchandise aboard vessels engaging in coastwise trade. Specifically, the Jones Act precludes a foreign vessel from providing any part of the transportation of merchandise by water, or by land and water, between points in the United States to which the coastwise laws apply. In addition, maritime cabotage laws also govern other aspects of coastwise trade, such as the carriage of passengers, dredging, and towing. As detailed in this paper, the Jones Act prohibits the coastwise trade aboard a non coastwise foreign flagged vessel, despite the interruption of the voyage through a foreign port. The penalty for the failure to strictly comply with the requirements of the Jones Act is severe and includes fines or the forfeiture of cargo by the U.S. Customs and Border Patrol. This paper explores the breadth of the restrictions on coastwise trade, certain narrow exceptions to the prohibitions against carriage of cargo and passengers by non-coastwise qualified vessels, and the genesis of the cabotage laws.