[USC02] 46 USC Subtitle V, Part E: Control of Merchant Marine Capabilities
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46 USC Subtitle V, Part E: Control of Merchant Marine Capabilities
From Title 46—SHIPPINGSubtitle V—Merchant Marine

Part E—Control of Merchant Marine Capabilities

CHAPTER 561—RESTRICTIONS ON TRANSFERS

Sec.
56101.
Approval required to transfer vessel to noncitizen.
56102.
Additional controls during war or national emergency.
56103.
Conditional approvals.
56104.
Penalty for false statements.
56105.
Forfeiture procedure.

        

§56101. Approval required to transfer vessel to noncitizen

(a) Restrictions.—

(1) In General.—Except as otherwise provided in this section, section 12119 of this title, or section 611 of the Merchant Marine Act, 1936, a person may not, without the approval of the Secretary of Transportation—

(A) sell, lease, charter, deliver, or in any other manner transfer, or agree to sell, lease, charter, deliver, or in any other manner transfer, to a person not a citizen of the United States, an interest in or control of—

(i) a documented vessel owned by a citizen of the United States; or

(ii) a vessel last documented under the laws of the United States; or


(B) place under foreign registry, or operate under the authority of a foreign country, a documented vessel or a vessel last documented under the laws of the United States.


(2) Exceptions.—Paragraph (1)(A) does not apply to a vessel that has been operated only for pleasure or only as a fishing vessel, fish processing vessel, or fish tender vessel (as defined in section 2101 of this title).


(b) Approval Before Documentation.—To promote financing with respect to a vessel to be documented under chapter 121 of this title, the Secretary may grant approval under subsection (a) before the vessel is documented.

(c) Exceptions.—Notwithstanding any other provision of this subtitle, the Merchant Marine Act, 1936, or any contract with the Secretary made under this subtitle or that Act, a person may place a vessel under foreign registry without the approval of the Secretary if—

(1)(A) the Secretary, in conjunction with the Secretary of Defense, determines that at least one replacement vessel of equal or greater military capability and of a capacity that is equivalent or greater, as measured by deadweight tons, gross tons, or container equivalent units, as appropriate, is documented under chapter 121 of this title by the owner of the vessel placed under foreign registry; and

(B) the replacement vessel is not more than 10 years old on the date of that documentation; or

(2) an operating agreement covering the vessel under chapter 531 of this title has expired.


(d) Status of Prohibited Transaction.—A charter, sale, or transfer of a vessel, or of an interest in or control of a vessel, in violation of this section is void.

(e) Penalties.—

(1) Criminal penalty.—A person that knowingly sells, charters, or transfers a vessel, or an interest in or control of a vessel, in violation of this section shall be fined under title 18, imprisoned for not more than 5 years, or both.

(2) Civil penalty.—A person that sells, charters, or transfers a vessel, or an interest in or control of a vessel, in violation of this section is liable to the United States Government for a civil penalty of not more than $10,000 for each violation.

(3) Forfeiture.—A documented vessel may be seized by and forfeited to the Government if, in violation of this section, a person—

(A) knowingly sells, charters, or transfers the vessel or an interest in or control of the vessel; or

(B) places the vessel under foreign registry or operates the vessel under the authority of a foreign country.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1651.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56101(a) 46 App.:808(c). Sept. 7, 1916, ch. 451, §9(c), (d), 39 Stat. 730; July 15, 1918, ch. 152, §3, 40 Stat. 900; June 5, 1920, ch. 250, §18, 41 Stat. 994; Exec. Order No. 6166, §12, eff. June 10, 1933; June 29, 1936, ch. 858, title II, §204, title IX, §904, 49 Stat. 1987, 2016; June 23, 1938, ch. 600, §42, 52 Stat. 964; Pub. L. 89–346, §1, Nov. 8, 1965, 79 Stat. 1305; Pub. L. 97–31, §12(26), Aug. 6, 1981, 95 Stat. 155; Pub. L. 100–710, title I, §104(b)(3), Nov. 23, 1988, 102 Stat. 4750; Pub. L. 101–225, title III, §304(a), Dec. 12, 1989, 103 Stat. 1924; Pub. L. 104–324, title XI, [§]1113(c), (e), Oct. 19, 1996, 110 Stat. 3970, 3971; Pub. L. 107–295, title II, §205(d), Nov. 25, 2002, 116 Stat. 2096.
  46 App.:808a. Pub. L. 98–454, title III, §302, Oct. 5, 1984, 98 Stat. 1734.
56101(b) 46 App.:808(f) Sept. 7, 1916, ch. 451, §9(f), as added Pub. L. 104–324, title XI, §1136(b), Oct. 19, 1996, 110 Stat. 3987; Pub. L. 108–136, title XXXV, §3532(a)(1), Nov. 24, 2003, 117 Stat. 1817.
56101(c) 46 App.:808(e) Sept. 7, 1916, ch. 451, §9(e), as added Pub. L. 104–239, §6, Oct. 8, 1996, 110 Stat. 3132; Pub. L. 108–136, title XXXV, §3532(a)(2), Nov. 24, 2003, 117 Stat. 1817.
56101(d) 46 App.:808(d)(1).
56101(e) 46 App.:808(d)(2)–(4).

In subsection (a), the text of 46 App. U.S.C. 808a is omitted as unnecessary. In paragraph (1), the words "owned by a citizen of the United States" are omitted as unnecessary because ownership by a citizen is a requirement for documentation. See section 12103 as revised by the bill.

In subsection (c), before paragraph (1), the words "Notwithstanding any other provision of this subtitle, the Merchant Marine Act, 1936, or any contract with the Secretary made under this subtitle or that Act" are substituted for "Notwithstanding subsection (c)(2) of this section, the Merchant Marine Act, 1936 [46 App. U.S.C. 1101 et seq.], or any contract entered into with the Secretary of Transportation under that Act" because the Merchant Marine Act, 1936, is restated principally in this subtitle, but other provisions of that Act are being neither restated nor repealed.

References in Text

The Merchant Marine Act, 1936, referred to in subsecs. (a)(1) and (c), is act June 29, 1936, ch. 858, 49 Stat. 1985, which was classified principally to chapter 27 (§1101 et seq.) of the former Appendix to this title. The Act, with the exception of title V, most of title VI, and sections 301, 801, 802, 809(a), and 909 thereof, was repealed and restated, mainly in this subtitle, by Pub. L. 109–304, §§8, 19, Oct. 6, 2006, 120 Stat. 1555, 1710. Title V and sections 301 and 909 of the Act are set out as notes under section 53101 of this title. Those portions of title VI not repealed by Pub. L. 109–304 and sections 802 and 809(a) of the Act were repealed by Pub. L. 114–120, title III, §313(a), Feb. 8, 2016, 130 Stat. 58. Section 801 of the Act was transferred to section 57522 of this title by Pub. L. 114–120, title III, §313(c)(1)(A), Feb. 8, 2016, 130 Stat. 58. For complete classification of the Act to the Code, see Tables. For disposition of sections of the former Appendix to Title 46, see Disposition Table preceding section 101 of this title.

§56102. Additional controls during war or national emergency

(a) In General.—During war, or a national emergency declared by Presidential proclamation, a person may not, without the approval of the Secretary of Transportation—

(1) place under foreign registry a vessel owned in whole or in part by a citizen of the United States or a corporation incorporated under the laws of the United States or of a State;

(2) sell, mortgage, lease, charter, deliver, or in any other manner transfer, or agree to sell, mortgage, lease, charter, deliver, or in any other manner transfer, to a person not a citizen of the United States—

(A) a vessel owned as described in paragraph (1), or an interest therein;

(B) a vessel documented under the laws of the United States, or an interest therein; or

(C) a facility for building or repairing vessels, or an interest therein;


(3) issue, assign, or transfer to a person not a citizen of the United States an instrument of indebtedness secured by a mortgage of a vessel to a trustee, by an assignment of an owner's interest in a vessel under construction to a trustee, or by a mortgage of a facility for building or repairing vessels to a trustee, unless the trustee or a substitute trustee is approved by the Secretary under subsection (b);

(4) enter into an agreement or understanding to construct a vessel in the United States for, or to be delivered to, a person not a citizen of the United States without expressly stipulating that construction will not begin until after the war or national emergency has ended;

(5) enter into an agreement or understanding whereby there is vested in, or for the benefit of, a person not a citizen of the United States the controlling interest in a corporation that is incorporated under the laws of the United States or a State and that owns a vessel or facility for building or repairing vessels; or

(6) cause or procure a vessel, constructed in whole or in part in the United States and never cleared for a foreign port, to depart from a port of the United States before it has been documented under the laws of the United States.


(b) Trustees.—

(1) Approval.—The Secretary shall approve a trustee or substitute trustee under subsection (a)(3) if and only if the trustee is a bank or trust company that—

(A) is organized as a corporation, and is doing business, under the laws of the United States or a State;

(B) is authorized under those laws to exercise corporate trust powers;

(C) is a citizen of the United States;

(D) is subject to supervision or examination by Federal or State authority; and

(E) has a combined capital and surplus (as set forth in its most recent published report of condition) of at least $3,000,000.


(2) Disapproval.—If a trustee or substitute trustee ceases to meet the conditions in paragraph (1), the Secretary shall disapprove the trustee or substitute trustee. After the disapproval, the restrictions on transfer or assignment without the Secretary's approval in subsection (a)(3) apply.

(3) Operation of vessel.—During a period when subsection (a) applies, a trustee referred to in subsection (a)(3), even though approved as a trustee by the Secretary, may not operate the vessel under the mortgage or assignment without the Secretary's approval.


(c) Status of Prohibited Transaction.—A transaction in violation of this section is void.

(d) Recovery of Consideration.—

(1) In general.—A person that deposited or paid consideration in connection with a transaction prohibited by this section may recover the consideration after tender of the vessel, facility, stock, or other security, or interest therein, to the person entitled to it, or the forfeiture thereof to the United States Government.

(2) Exception.—Paragraph (1) does not apply if the person in whose interest the consideration was deposited, or to whom it was paid, entered into the transaction in the belief that the person depositing or paying the consideration was a citizen of the United States.


(e) Penalties.—

(1) Criminal penalty.—A person that violates, or attempts or conspires to violate, this section shall be fined under title 18, imprisoned for not more than 5 years, or both.

(2) Forfeiture.—The following shall be forfeited to the Government:

(A) A vessel, a facility for building or repairing vessels, or an interest in a vessel or such a facility, that is sold, mortgaged, leased, chartered, delivered, transferred, or documented, or agreed to be sold, mortgaged, leased, chartered, delivered, transferred, or documented, in violation of this section.

(B) Stock and other securities sold or transferred, or agreed to be sold or transferred, in violation of this section.

(C) A vessel departing in violation of subsection (a)(6).

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1652.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56102(a) 46 App.:835(a)–(c) (less provisos), (d)–(f). Sept. 7, 1916, ch. 451, §37, as added July 15, 1918, ch. 152, §4, 40 Stat. 901; Exec. Order No. 6166, §12, eff. June 10, 1933; June 29, 1936, ch. 858, title II, §204, title IX, §904, 49 Stat. 1987, 2016; Pub. L. 89–346, §2, Nov. 8, 1965, 79 Stat. 1306; Pub. L. 97–31, §12(30), Aug. 6, 1981, 95 Stat. 156.
56102(b) 46 App.:835(c) (provisos).
56102(c) 46 App.:835 (2d par. after cl. (f), last par. words before 9th comma).
56102(d) 46 App.:835 (last par. words after 9th comma).
56102(e) 46 App.:835 (1st, 3d pars. after cl. (f)).

In this section, the words "facility for building or repairing vessels" are substituted for "shipyard, dry dock, shipbuilding or ship-repairing plant or facility" (or similar language) to eliminate unnecessary words.

In subsection (a)(1), the words "transfer to" and "or flag" are omitted as surplus. The words "Territory, District, or possession thereof" are omitted as unnecessary because of the definition of "State" in chapter 1 of the revised title.

In subsection (a)(3), the words "instrument of indebtedness" are substituted for "bond, note, or other evidence of indebtedness" to eliminate unnecessary words. The words "right, title, or" are omitted as unnecessary.

In subsection (a)(5), the words "or the majority of the voting power" are omitted as covered by "controlling interest".

In subsection (b)(1), before subparagraph (A), the words "and only if" are added for clarity because the Secretary is required to disapprove a trustee that ceases to meet the specified conditions.

Subsections (c) and (d) are substituted for the source provisions to eliminate unnecessary words.

In subsection (e)(1), the words "guilty of a misdemeanor" are omitted, and the words "fined under title 18" are substituted for "punishable by a fine of not more than $5000", because of chapter 227 of title 18.

§56103. Conditional approvals

(a) In General.—In approving an act or transaction under section 56101 or 56102 of this title, the Secretary of Transportation may do so absolutely or upon conditions the Secretary considers advisable. The Secretary shall state the conditions in the notice of approval.

(b) Violations.—A violation of a condition of approval is subject to the same penalties as a violation resulting from an act done without the required approval. The violation occurs at the time the condition is violated.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1654.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56103 46 App.:839 (1st par.). Sept. 7, 1916, ch. 451, §41 (1st par.), as added July 15, 1918, ch. 152, §4, 40 Stat. 902; Exec. Order No. 6166, June 10, 1933, §12; June 29, 1936, ch. 858, title II, §204, title IX, §904, 49 Stat. 1987, 2016; Pub. L. 97–31, §12(32), Aug. 6, 1981, 95 Stat. 156.

This section is substituted for the source provision to eliminate unnecessary words.

§56104. Penalty for false statements

A person that knowingly makes a false statement of a material fact to the Secretary of Transportation or another officer, employee, or agent of the Department of Transportation, to obtain the Secretary's approval under section 56101 or 56102 of this title, shall be fined under title 18, imprisoned for not more than 5 years, or both.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1654.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56104 46 App.:839 (last par.). Sept. 7, 1916, ch. 451, §41 (last par.), as added July 15, 1918, ch. 152, §4, 40 Stat. 903; Exec. Order No. 6166, June 10, 1933, §12; June 29, 1936, ch. 858, title II, §204, title IX, §904, 49 Stat. 1987, 2016; Pub. L. 97–31, §12(32), Aug. 6, 1981, 95 Stat. 156.

The words "guilty of a misdemeanor" are omitted, and the words "fined under title 18" are substituted for "subject to a fine of not more than $5000", because of chapter 227 of title 18.

§56105. Forfeiture procedure

(a) In General.—A forfeiture under this chapter may be enforced in the same way as a forfeiture under the laws on the collection of duties. However, such a forfeiture may be remitted without seizure of the vessel.

(b) Prior Convictions.—In a proceeding under this chapter to enforce a forfeiture, a prior criminal conviction of a person for a violation of this chapter with respect to the subject matter of the forfeiture is prima facie evidence of the violation against the person convicted.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1654.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56105(a) 46 App.:836. Sept. 7, 1916, ch. 451, §38, as added July 15, 1918, ch. 152, §4, 40 Stat. 902; Pub. L. 101–225, title III, §304(b), Dec. 12, 1989, 103 Stat. 1924.
56105(b) 46 App.:837. Sept. 7, 1916, ch. 451, §39, as added July 15, 1918, ch. 152, §4, 40 Stat. 902.

CHAPTER 563—EMERGENCY ACQUISITION OF VESSELS

Sec.
56301.
General authority.
56302.
Charter terms.
56303.
Compensation.
56304.
Disputed compensation.
56305.
Vessel encumbrances.
56306.
Use and transfer of vessels.
56307.
Return of vessels.
56308.
Transfer of substitute vessels.
56309.
Emergency foreign vessel acquisition; purchase or requisition of vessels lying idle in United States waters 1

        

56310.
Voluntary purchase or charter agreements 1
56311.
Requisitioned vessels 1
56312.
Documented defined 1

        

Amendments

2017Pub. L. 115–91, div. C, title XXXV, §§3502(b)(8), 3504(e), Dec. 12, 2017, 131 Stat. 1911, 1913, added items 56308 to 56312.

1 So in original. Probably should be followed by a period.

§56301. General authority

During a national emergency declared by Presidential proclamation, or a period for which the President has proclaimed that the security of the national defense makes it advisable, the Secretary of Transportation may requisition or purchase, or requisition or charter the use of, a vessel owned by citizens of the United States, a documented vessel, or a vessel under construction in the United States.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1654.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56301 46 App.:1242(a) (1st, 2d sentences). June 29, 1936, ch. 858, title IX, §902(a) (1st, 2d sentences), 49 Stat. 2015; Pub. L. 97–31, §12(131), Aug. 6, 1981, 95 Stat. 165; Pub. L. 100–710, title I, §104(c), Nov. 23, 1988, 102 Stat. 4750.

The words "or other watercraft" are omitted because of the definition of "vessel" in chapter 1 of the revised title. The words "The termination of any emergency so declared shall be announced by a further proclamation by the President" are omitted as superseded by the National Emergencies Act (50 U.S.C. 1601 et seq.).

§56302. Charter terms

(a) In General.—If a vessel is requisitioned for use but not ownership under this chapter, the Secretary of Transportation, at the time of requisition or as soon thereafter as the situation allows, shall offer the person entitled to possession of the vessel a charter containing—

(1) the terms the Secretary believes should govern the relationship between the United States Government and the person; and

(2) the rate of hire the Secretary considers just compensation for the use of the vessel and the services required under the charter.


(b) Refusal To Accept.—If the person does not accept the charter and rate of hire, the parties shall proceed as provided in section 56304 of this title.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1654.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56302 46 App.:1242(c) (1st sentence). June 29, 1936, ch. 858, title IX, §902(c) (1st sentence); as added Aug. 7, 1939, ch. 555, §3, 53 Stat. 1255; Pub. L. 97–31, §12(131), Aug. 6, 1981, 95 Stat. 165.

In subsection (a), the words "requisitioned for use but not ownership under this chapter" are substituted for "taken and used under authority of this section, but the ownership thereof is not required by the United States" to eliminate unnecessary words. The word "requisition" is substituted for "taking", and the word "vessel" is substituted for "such property", for consistency.

Subsection (b) is added because the provisions about disputed compensation, for both charter use and other takings, are consolidated in section 56304 of the revised title to avoid repetition.

§56303. Compensation

(a) In General.—As soon as practicable, the Secretary of Transportation shall determine and pay just compensation for a vessel requisitioned under this chapter.

(b) Factors Not Affecting Value.—The value of a vessel may not be considered enhanced by the circumstances requiring its requisition. Consequential damages arising from the requisition may not be paid.

(c) Effect of Construction-Differential Subsidy.—

(1) If paid.—If a construction-differential subsidy has been paid for the vessel, the value of the vessel at the time of requisition shall be determined under section 802 of the Merchant Marine Act, 1936.

(2) If not paid.—If a construction-differential subsidy has not been paid for the vessel, the value of any national defense features previously paid for by the United States Government shall be excluded.


(d) Loss or Damage During Charter.—If a vessel is lost or damaged by a risk assumed by the Government under the charter, but a valuation for the vessel or a means of compensation has not been agreed to, the Secretary shall pay just compensation for the loss or damage, to the extent the person is not reimbursed through insurance.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1655.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56303(a) 46 App.:1242(a) (3d sentence words before 2d comma), (d) (1st par. words before 2d comma). June 29, 1936, ch. 858, title IX, §902(a) (3d, last sentences), (b), (d) (1st par. words before 2d comma), 49 Stat. 2015, 2016; Aug. 7, 1939, ch. 555, §3, 53 Stat. 1255; Aug. 3, 1956, ch. 929, §3, 70 Stat. 985; Pub. L. 97–31, §12(131), Aug. 6, 1981, 95 Stat. 165.
56303(b) 46 App.:1242(a) (3d sentence words after 2d comma, last sentence).
56303(c) 46 App.:1242(b).
56303(d) 46 App.:1242(c) (last sentence).

References in Text

Section 802 of the Merchant Marine Act, 1936, referred to in subsec. (c)(1), is section 802 of act June 29, 1936, ch. 858, 49 Stat. 1985, which is set out as a note under section 53101 of this title.

§56304. Disputed compensation

If the person entitled to compensation disputes the amount of just compensation determined by the Secretary of Transportation under this chapter, the Secretary shall pay the person, as a tentative advance, 75 percent of the amount determined. The person may bring a civil action against the United States to recover just compensation. If the tentative advance paid under this section is greater than the amount of the court's judgment, the person shall refund the difference.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1655.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56304 46 App.:1242(c) (2d sentence), (d) (1st par. words after 2d comma). June 29, 1936, ch. 858, title IX, §902(c) (2d sentence), (d) (1st par. words after 2d comma); as added Aug. 7, 1939, ch. 555, §3, 53 Stat. 1256; Aug. 3, 1956, ch. 929, §§2, 3, 70 Stat. 985; Pub. L. 97–31, §12(131), Aug. 6, 1981, 95 Stat. 165.

This section is substituted for the source provisions to eliminate unnecessary words.

§56305. Vessel encumbrances

(a) In General.—The existence of an encumbrance on a vessel does not prevent the requisition of the vessel under this chapter.

(b) Deposit in Treasury.—

(1) In general.—If an encumbrance exists, the Secretary of Transportation may deposit part of the compensation or advance of compensation to be paid under this chapter (but not more than the total amount of all encumbrances) in a fund in the Treasury. The Secretary shall publish notice of the creation of the fund in the Federal Register.

(2) Availability of amounts deposited.—Amounts deposited in the fund shall be available to pay the compensation or any of the encumbrances (including encumbrances stipulated to in a court of the United States or a State) existing at the time the vessel was requisitioned.


(c) Civil Action.—

(1) In general.—Within 6 months after publication of notice under subsection (b), the holder of an encumbrance may bring a civil action in admiralty, according to the principles of libels in rem, against the fund.

(2) Venue.—The action must be brought in the district court of the United States—

(A) from whose custody the vessel was or may be requisitioned; or

(B) in whose district the vessel was located when it was requisitioned.


(3) Service of process.—Service of process shall be made on the appropriate United States Attorney, the Attorney General, and the Secretary, in the manner provided by the Federal Rules of Civil Procedure (28 App. U.S.C.). Notice of the action shall be given to all interested persons as ordered by the court.

(4) As between private parties.—The action shall proceed and be determined according to the principles of law and the rules of practice applicable in like cases between private parties.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1655.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56305 46 App.:1242(d) (last par.). June 29, 1936, ch. 858, title IX, §902(d) (last par.), as added Mar. 24, 1943, ch. 26, §3(d), 57 Stat. 49; Pub. L. 97–31, §12(131), Aug. 6, 1981, 95 Stat. 165.

In this section, the words "encumbrance" and "encumbrances" are substituted for "any valid claim by way of mortgage or maritime claim or attachment lien" and "any valid claim by way of mortgage or maritime lien or attachment lien" to eliminate unnecessary words.

In subsection (b)(1), the words "The Secretary shall publish notice of the creation of the fund in the Federal Register" are added for clarity, based on language barring a civil action not brought within 6 months after publication of such a notice.

In subsection (c)(1), the words "Within 6 months after publication of notice under subsection (b)" are substituted for "prior to June 30, 1943, or within six months after the first such deposit with the Treasurer and publication of notice thereof in the Federal Register, whichever date is later" for clarity and to eliminate obsolete language.

Subsection (c)(3) is substituted for "and such suit shall be commenced in the manner provided by section 742 of this Appendix and service of process shall be made in the manner therein provided by service upon the United States attorney and by mailing by registered mail to the Attorney General and the Secretary of Transportation and due notice shall under order of the court be given to all interested persons" because the relevant sentences in 46 App. U.S.C. 742 were struck by an amendment in 1996. See generally Henderson v. United States, 517 U.S. 654, 116 S. Ct. 1638 (1996).

In subsection (c)(4), the words "any decree in said suit shall be paid out of the first and all subsequent deposits of compensation" and "any decree shall be subject to appeal and revision as now provided in other cases of admiralty and maritime jurisdiction" are omitted as surplus.

§56306. Use and transfer of vessels

(a) In General.—The Secretary of Transportation may repair, recondition, reconstruct, operate, or charter for operation, a vessel acquired under this chapter.

(b) Transfer to Other Agencies.—The Secretary may transfer the possession or control of a vessel acquired under this chapter to another department or agency of the United States Government on terms and conditions approved by the President. The department or agency shall promptly reimburse the Secretary for expenditures for just compensation, purchase price, charter hire, repairs, reconditioning, or reconstruction.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1656.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56306 46 App.:1242(e). June 29, 1936, ch. 858, title IX, §902(e); as added Aug. 7, 1939, ch. 555, §3, 53 Stat. 1256; Pub. L. 97–31, §12(131), Aug. 6, 1981, 95 Stat. 165.

In this section, the word "vessel" is substituted for "property" for consistency in the chapter.

In subsection (b), the words "Such reimbursements shall be deposited in the construction fund established by section 1116 of this Appendix" are omitted as impliedly repealed by 46 App. U.S.C. 1119 as amended in 1967.

§56307. Return of vessels

When a vessel requisitioned for use but not ownership is returned to the owner, the Secretary of Transportation shall—

(1) return the vessel in a condition at least as good as when taken, less ordinary wear and tear; or

(2) pay the owner an amount sufficient to recondition the vessel to that condition, less ordinary wear and tear.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1656.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56307 46 App.:1242(a) (4th sentence). June 29, 1936, ch. 858, title IX, §902(a) (4th sentence), 49 Stat. 2015; Pub. L. 97–31, §12(131), Aug. 6, 1981, 95 Stat. 165.

The words "requisitioned for use but not ownership" are substituted for "taken and used under authority of this section, but the ownership thereof is not required by the United States" to eliminate unnecessary words.

§56308. Transfer of substitute vessels

In the case of any vessel constructed in the United States after January 1, 1937, which has been taken by the United States for use in any manner, the Secretary of Transportation, if in his opinion the transfer would aid in carrying out the policies of this Act,1 is authorized to transfer to the owner of such vessel another vessel which is deemed by the Secretary to be of comparable type with adjustments for depreciation and difference in design or speed, and to the extent applicable, such other adjustments and terms and conditions, including transfer of mortgage obligations in favor of the United States binding upon the old vessel, as the Secretary may prescribe.

(Added and amended Pub. L. 115–91, div. C, title XXXV, §3502(a)(2), (b)(5), Dec. 12, 2017, 131 Stat. 1910.)

References in Text

This Act, referred to in text, means act Mar. 8, 1946, ch. 82, 60 Stat. 41, known as the Merchant Ship Sales Act of 1946, which was classified principally to chapter 54 (§4401 et seq.) of Title 50, War and National Defense. The Act has been repealed, except for sections 8(d) and 11, which were transferred to this section and section 57100 of this title, respectively, by Pub. L. 115–91. Provisions relating to the policies of the Act were contained in section 4401 of Title 50 prior to repeal by Pub. L. 115–91.

Codification

Section, as added and amended by Pub. L. 115–91, is based on act Mar. 8, 1946, ch. 82, §8(d), 60 Stat. 46, as amended by Pub. L. 97–31, §12(154), Aug. 6, 1981, 95 Stat. 167, which was formerly classified to section 4404(d) of Title 50, War and National Defense, before being transferred to this chapter and renumbered as this section.

Amendments

2017Pub. L. 115–91, §3502(b)(5)(C), which directed striking out "adjustments with respect to the retained vessels as provided for in section 9, and", was executed by striking out "adjustments with respect to the retained vessel as provided for in section 9, and" after "extent applicable," to reflect the probable intent of Congress.

Pub. L. 115–91, §3502(b)(5)(B), which directed insertion of "of Transportation" after "Secretary", was executed by making the insertion after "Secretary" the first time appearing to reflect the probable intent of Congress.

Pub. L. 115–91, §3502(b)(5)(A), inserted section enumerator and catchline.

Pub. L. 115–91, §3502(a)(2), transferred section 8(d) of act Mar. 8, 1946, to this chapter and renumbered it as this section. See Codification note above.

1 See References in Text note below.

§56309. Emergency foreign vessel acquisition; purchase or requisition of vessels lying idle in United States waters

During any period in which vessels may be requisitioned under this chapter, the President is authorized and empowered through the Secretary of Transportation to purchase, or to requisition, or for any part of such period to charter or requisition the use of, or to take over the title to or possession of, for such use or disposition as he shall direct, any merchant vessel not owned by citizens of the United States which is lying idle in waters within the jurisdiction of the United States and which the President finds to be necessary to the national defense. Just compensation shall be determined and made to the owner or owners of any such vessel in accordance with the applicable provisions of this chapter. Such compensation hereunder, or advances on account thereof, shall be deposited with the Treasurer of the United States in a separate deposit fund. Payments for such compensation and also for payment of any valid claim upon such vessel in accord with the provisions of section 56305, shall be made from such fund upon the certificate of the Secretary of Transportation.

(Added and amended Pub. L. 115–91, div. C, title XXXV, §3504(a), Dec. 12, 2017, 131 Stat. 1911.)

Codification

Section, as added and amended by section 3504(a) of Pub. L. 115–91, is based on act Aug. 9, 1954, ch. 659, §1, 68 Stat. 675; Pub. L. 96–70, title III, §3302(c), Sept. 27, 1979, 93 Stat. 498; Pub. L. 97–31, §12(152), Aug. 6, 1981, 95 Stat. 167, which was formerly classified to section 196 of Title 50, War and National Defense, before being transferred to this chapter and renumbered as this section.

Amendments

2017Pub. L. 115–91, §3504(a)(2), inserted section enumerator and catchline and, in text, substituted "this chapter" for "section 902 of the Merchant Marine Act, 1936, as amended" in two places and "section 56305" for "the second paragraph of subsection (d) of such section 902, as amended".

Pub. L. 115–91, §3504(a)(1), transferred section 1 of act Aug. 9, 1954, to this chapter and renumbered it as this section. See Codification note above.

References

Pub. L. 115–91, div. C, title XXXV, §3504(f), Dec. 12, 2017, 131 Stat. 1913, provided that: "Any reference in a law, regulation, document, paper, or other record of the United States to a section that is redesignated and transferred by this section [sections 1 to 3 of act Aug. 9, 1954, former 50 U.S.C. 196 to 198] is deemed to refer to such section as so redesignated and transferred [now 46 U.S.C. 56309 to 56311]."

§56310. Voluntary purchase or charter agreements

During any period in which vessels may be requisitioned under this chapter as amended,1 the President is authorized through the Secretary of Transportation to acquire by voluntary agreement of purchase or charter the ownership or use of any merchant vessel not owned by citizens of the United States.

(Added and amended Pub. L. 115–91, div. C, title XXXV, §3504(b), Dec. 12, 2017, 131 Stat. 1912.)

Codification

Section, as added and amended by section 3504(b) of Pub. L. 115–91, is based on act Aug. 9, 1954, ch. 659, §2, 68 Stat. 675; Pub. L. 97–31, §12(152), Aug. 6, 1981, 95 Stat. 167, which was formerly classified to section 197 of Title 50, War and National Defense, before being transferred to this chapter and renumbered as this section.

Amendments

2017Pub. L. 115–91, §3504(b)(2), inserted section enumerator and catchline and, in text, substituted "this chapter" for "section 902 of the Merchant Marine Act, 1936,".

Pub. L. 115–91, §3504(b)(1), transferred section 2 of act Aug. 9, 1954, to this chapter and renumbered it as this section. See Codification note above.

1 So in original.

§56311. Requisitioned vessels

(a) Any vessel not documented under the laws of the United States, acquired by or made available to the Secretary of Transportation under section 56309 or 56310, as applicable, or otherwise, may, notwithstanding any other provision of law, in the discretion of the Secretary of the department in which the Coast Guard is operating be documented as a vessel of the United States under such rules and regulations or orders, and with such limitations, as the Secretary of the department in which the Coast Guard is operating may prescribe or issue as necessary or appropriate to carry out the purposes and provisions of section 56309 or 56310, as applicable, and in accordance with the provisions of subsection (c), engage in the coastwise trade when so documented. Any document issued to a vessel under the provisions of this subsection shall be surrendered at any time that such surrender may be ordered by the Secretary of the department in which the Coast Guard is operating. No vessel, the surrender of the documents of which has been so ordered, shall, after the effective date of such order, have the status of a vessel of the United States unless documented anew.

(b) The President may, notwithstanding any other provisions of law, by rules and regulations or orders, waive compliance with any provision of law relating to masters, officers, members of the crew, or crew accommodations on any vessel documented under authority of this section to such extent and upon such terms as he finds necessary because of the lack of physical facilities on such vessels, and because of the need to employ aliens for their operation. No vessel shall cease to enjoy the benefits and privileges of a vessel of the United States by reason of the employment of any person in accordance with the provisions of this subsection.

(c) Any vessel while documented under the provisions of this section, when chartered under section 56309 or 56310, as applicable, by the Secretary of Transportation to Government agencies or departments or to private operators, may engage in the coastwise trade under permits issued by the Secretary of Transportation, who is authorized to issue permits for such purpose pursuant to such rules and regulations as he may prescribe. The Secretary of Transportation is authorized to prescribe such rules and regulations as he may deem necessary or appropriate to carry out the purposes and provisions of this section. Section 57109 shall not apply with respect to vessels chartered to Government agencies or departments or to private operators or otherwise used or disposed of under section 56309 or 56310, as applicable. Existing laws covering the inspection of steam vessels are made applicable to vessels documented under this section only to such extent and upon such conditions as may be required by regulations of the Secretary of the department in which the Coast Guard is operating: Provided, That in determining to what extent those laws should be made applicable, due consideration shall be given to the primary purpose of transporting commodities essential to the national defense.

(d) The Secretary of Transportation without regard to the 1 section 6101 of title 41 may repair, reconstruct, or recondition any vessels to be utilized under section 56309 or 56310, as applicable. The Secretary of Transportation and any other Government department or agency by which any vessel is acquired or chartered, or to which any vessel is transferred or made available under section 56309 or 56310, as applicable, may, with the aid of any funds available and without regard to the provisions of section 6101 of title 41, repair, reconstruct, or recondition any such vessels to meet the needs of the services intended, or provide facilities for such repair, reconstruction, or reconditioning. The Secretary of Transportation may operate or charter for operation any vessel to be utilized under section 56309 or 56310, as applicable 2 to private operators, citizens of the United States, or to any department or agency of the United States Government, without regard to the provisions of chapter 575, and any department or agency of the United States Government is authorized to enter into such charters.

(e) In case of any voyage of a vessel documented under the provisions of this section begun before the date of termination of an effective period of section 196 of this title, but is completed after such date, the provisions of this section shall continue in effect with respect to such vessel until such voyage is completed.

(Added and amended Pub. L. 115–91, div. C, title XXXV, §3504(c), Dec. 12, 2017, 131 Stat. 1912.)

Codification

Section, as added and amended by section 3504(c) of Pub. L. 115–91, is based on act Aug. 9, 1954, ch. 659, §3, 68 Stat. 675; Pub. L. 89–670, §6(b)(1), (2), Oct. 15, 1966, 80 Stat. 938; Pub. L. 97–31, §12(152), Aug. 6, 1981, 95 Stat. 167, which was formerly classified to section 198 of Title 50, War and National Defense, before being transferred to this chapter and renumbered as this section.

Amendments

2017Pub. L. 115–91, §3504(c)(3)(A), substituted "section 56309 or 56310, as applicable" for "this Act" wherever appearing, except in first sentence of subsec. (c) and second sentence of subsec. (d).

Pub. L. 115–91, §3504(c)(2), inserted section enumerator and catchline.

Pub. L. 115–91, §3504(c)(1), transferred section 3 of act Aug. 9, 1954, to this chapter and renumbered it as this section. See Codification note above.

Subsec. (c). Pub. L. 115–91, §3504(c)(3)(B), substituted "section 56309 or 56310, as applicable," for "this Act" in first sentence and "Section 57109" for "The second paragraph of section 9 of the Shipping Act, 1916, as amended," in third sentence.

Subsec. (d). Pub. L. 115–91, §3504(c)(3)(C)(i)–(iii), substituted, in first sentence, "section 6101 of title 41" for "provisions of section 3709 of the Revised Statutes", in second sentence, "section 56309 or 56310, as applicable," for "this Act" and "section 6101 of title 41" for "said section 3709", and, in third sentence, "chapter 575" for "title VII of the Merchant Marine Act, 1936".

Subsec. (f). Pub. L. 115–91, §3504(c)(3)(C)(iv), struck out subsec. (f) which read as follows: "When used in this Act, the term 'documented' means 'registered', 'enrolled and licensed', or 'licensed'." See section 56312 of this title.

Transfer of Functions

For transfer of authorities, functions, personnel, and assets of the Coast Guard, including the authorities and functions of the Secretary of Transportation relating thereto, to the Department of Homeland Security, and for treatment of related references, see sections 468(b), 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.

"Secretary of the department in which the Coast Guard is operating" substituted in subsec. (a) for "Secretary of the Treasury" pursuant to section 6(b)(1), (2) of Pub. L. 89–670, which transferred Coast Guard to Department of Transportation and transferred to and vested in Secretary of Transportation functions, powers, and duties relating to Coast Guard, of Secretary of the Treasury and of all other officers and offices of Department of the Treasury, and which provided that notwithstanding such transfer Coast Guard shall operate as part of Navy in time of war or when President directs as provided in former section 3 (now 103) of Title 14, Coast Guard. See section 108 of Title 49, Transportation.

1 So in original. The word "the" probably should not appear.

2 So in original. Probably should be followed by a comma.

§56312. Documented defined

In sections 56309 through 56311, the term "documented" means, with respect to a vessel, that a certificate of documentation has been issued for the vessel under chapter 121.

(Added Pub. L. 115–91, div. C, title XXXV, §3504(d), Dec. 12, 2017, 131 Stat. 1913.)

CHAPTER 565—ESSENTIAL VESSELS AFFECTED BY NEUTRALITY ACT

Sec.
56501.
Definition.
56502.
Adjusting obligations and arranging maintenance.
56503.
Types of adjustments and arrangements.
56504.
Changes in adjustments and arrangements.

        

§56501. Definition

In this chapter, the term "essential vessel" means a vessel that is—

(1)(A) security for a mortgage indebtedness to the United States Government; or

(B) constructed under this subtitle or required by a contract under this subtitle to be operated on a certain essential foreign trade route; and

(2) necessary in the interests of commerce and national defense to be maintained in condition for prompt use.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1656.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56501 46 App.:1242a(a). June 29, 1940, ch. 442, subdiv. (a), 54 Stat. 684.

§56502. Adjusting obligations and arranging maintenance

(a) General Authority.—On written application, the Secretary of Transportation may adjust obligations and arrange for maintenance of an essential vessel as provided in this chapter if the Secretary determines, after any investigation or proceeding the Secretary considers desirable, that—

(1) the operation of the vessel in the service, route, or line to which it is assigned under this subtitle, or in which it otherwise would be operated, is not—

(A) lawful under the Neutrality Act of 1939 (22 U.S.C. 441 et seq.) or a proclamation issued under that Act; or

(B) compatible with maintaining the availability of the vessel for national defense and commerce;


(2) it is not feasible under existing law to employ the vessel in any other service or operation in foreign or domestic trade (except temporary or emergency operation under section 56503(b)(5) of this title); and

(3) the applicant, because of the restrictions of the Neutrality Act of 1939 (22 U.S.C. 441 et seq.) or the withdrawal of vessels for national defense under paragraph (1), is not earning or will not earn a reasonable return on the capital necessarily employed in its business.


(b) Effective Period.—Adjustments and arrangements under subsection (a) shall continue in effect only as long as the circumstances described in subsection (a) continue to exist.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1657.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56502 46 App.:1242a(b), (e). June 29, 1940, ch. 442, subdivs. (b), (e), 54 Stat. 684, 686; Pub. L. 97–31, §12(132), Aug. 6, 1981, 95 Stat. 165.

The text of 46 App. U.S.C. 1242a(b) (1st sentence) is omitted as surplus. The text of 46 App. U.S.C. 1242a(e) is omitted as obsolete.

References in Text

The Neutrality Act of 1939, referred to in subsec. (a)(1)(A), (3), is act Nov. 4, 1939, ch. 2, 54 Stat. 4, which is classified generally to subchapter II (§441 et seq.) of chapter 9 of Title 22, Foreign Relations and Intercourse. For complete classification of this Act to the Code, see Short Title note set out under section 441 of Title 22 and Tables.

§56503. Types of adjustments and arrangements

(a) Suspension Requirements.—An adjustment or arrangement under this chapter shall include suspension of—

(1) the requirement to operate the vessel in foreign trade under the applicable operating-differential or construction-differential subsidy contract or mortgage or other agreement; and

(2) the right to operating-differential subsidy for the vessel.


(b) Discretionary Adjustments and Arrangements.—To the extent the Secretary of Transportation considers appropriate to carry out the purposes of this subtitle, an adjustment or arrangement under this chapter may include any of the following:

(1) Lay-up of the vessel by the owner or in the custody of the Secretary, with payment or reimbursement by the Secretary of necessary and proper expenses (including reasonable overhead and insurance) or a fixed periodic allowance instead of payment or reimbursement.

(2) Postponement, for not more than the total period of the lay-up, of the maturity date of each installment of the principal of obligations to the United States Government for the vessel (regardless of whether the maturity date is during a lay-up period), or rearrangement of those maturities.

(3) Postponement or cancellation of interest accruing on the obligations during a lay-up period.

(4) Extension, for not more than the total period of the lay-up, of the 20-year life limitation for the vessel and other limitations and provisions of this subtitle based on a 20-year life.

(5) Provision for temporary or emergency employment of the vessel (instead of lay-up) as may be practicable, with such arrangements for management of the vessel, payment of expenses, and application of the proceeds of the employment, as the Secretary may approve, with any period of operation being included as part of the lay-up period.

(6) Payment to the Secretary, on termination of the arrangements with the applicant, of the applicant's net profits (earned while the arrangements were in effect) in excess of 10 percent a year on the capital necessarily employed in the applicant's business, as reimbursement for obligations postponed or canceled and expenses incurred or paid by the Secretary under this section.


(c) Laid-Up Vessels.—Under subsection (b)(6), capital of the applicant represented by a vessel of the applicant laid-up or operated under this section shall be included in capital necessarily employed in the applicant's business. The Secretary may require a vessel laid-up or operated under this section to be security for reimbursement.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1657.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56503 46 App.:1242a(c). June 29, 1940, ch. 442, subdiv. (c), 54 Stat. 685; Pub. L. 97–31, §12(132), Aug. 6, 1981, 95 Stat. 165.

§56504. Changes in adjustments and arrangements

The Secretary of Transportation may change an adjustment or arrangement made under this chapter as the Secretary considers necessary to carry out this chapter.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1658.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
56504 46 App.:1242a(d). June 29, 1940, ch. 442, subdiv. (d), 54 Stat. 686; Pub. L. 97–31, §12(132), Aug. 6, 1981, 95 Stat. 165.