46a USC Rule - Registration, enrollment, and licensing of vessels purchased, chartered, or leased; unlawful transactions; penalties

(a) Repealed. Pub. L. 101–225, title III, § 307(3),Dec. 12, 1989, 103 Stat. 1925

(b) Necessity of registration, etc., for operation; laws, regulations, and liabilities applicable

Every vessel purchased, chartered, or leased from the Secretary of Transportation shall, unless otherwise authorized by the Secretary of Transportation, be operated only under such registry or enrollment and license. Such vessels while employed solely as merchant vessels shall be subject to all laws, regulations, and liabilities governing merchant vessels, whether the United States be interested therein as owner, in whole or in part, or hold any mortgage, lien, or other interest therein.

(c) Sale, lease, etc., to foreign persons; foreign registry or operation

Except as provided in section 1181 of this Appendix and in section 12106 (e) of title 46, a person may not, without the approval of the Secretary of Transportation—

(1) sell, lease, charter, deliver, or in any manner transfer, or agree to sell, lease, charter, deliver, or in any manner transfer, to a person not a citizen of the United States, any interest in or control of a documented vessel (except in a vessel that has been operated only as a fishing vessel, fish processing vessel, or fish tender vessel (as defined in section 2101 of title 46) or in a vessel that has been operated only for pleasure) owned by a citizen of the United States or the last documentation of which was under the laws of the United States; or

(2) place a documented vessel, or a vessel the last documentation of which was under the laws of the United States, under foreign registry or operate that vessel under the authority of a foreign country.

(d) Validity of unlawful charter, sale, etc.; penalties

(1) Any charter, sale, or transfer of a vessel, or interest in or control of that vessel, contrary to this section is void.

(2) A person that knowingly charters, sells, or transfers a vessel, or interest in or control of that vessel, contrary to this section shall be fined under title 18, imprisoned for not more than 5 years, or both.

(3) A documented vessel may be seized by, and forfeited to, the United States Government if—

(A) the vessel is placed under foreign registry or operated under the authority of a foreign country contrary to this section; or

(B) a person knowingly charters, sells, or transfers a vessel, or interest or control in that vessel, contrary to this section.

(4) A person that charters, sells, 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.

(e) Placement in foreign registry without approval of Secretary

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, a vessel may be placed under a foreign registry, without 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 title 46 by the owner of the vessel placed under the foreign registry; and

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

(2) an operating agreement covering the vessel under chapter 531 of title 46 has expired.

(f) Approval of certain vessel transactions before documentation of vessel

To promote financing with respect to a vessel to be documented under chapter 121 of title 46, the Secretary may grant approval under subsection (c) of this section before the date the vessel is documented.

Source

(Sept. 7, 1916, ch. 451, § 9,39 Stat. 730; July 15, 1918, ch. 152, § 3,40 Stat. 900; June 5, 1920, ch. 250, § 18,41 Stat. 994; Ex. Ord. 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),Nov. 23, 1988, 102 Stat. 4750; Pub. L. 101–225, title III, §§ 304(a), 307(3),Dec. 12, 1989, 103 Stat. 1924, 1925; Pub. L. 104–239, § 6,Oct. 8, 1996, 110 Stat. 3132; Pub. L. 104–324, title XI, §§ 1113(c), (e), 1136(b),Oct. 19, 1996, 110 Stat. 3970, 3971, 3987; Pub. L. 107–295, title II, § 205(d),Nov. 25, 2002, 116 Stat. 2096; Pub. L. 108–136, div. C, title XXXV, § 3532(a),Nov. 24, 2003, 117 Stat. 1817.)

References in Text

The Merchant Marine Act, 1936, referred to in subsec. (e), is act June 29, 1936, ch. 858, 49 Stat. 1985, as amended, which is classified principally to chapter 27 (§ 1101 et seq.) of this Appendix. For complete classification of this Act to the Code, see section 1245 of this Appendix and Tables.

Amendments

2003—Subsec. (e). Pub. L. 108–136, § 3532(a)(2), amended subsec. (e) generally. Prior to amendment, subsec. (e) specified requirements to be met for placement of a vessel under foreign registry without approval of the Secretary.

Pub. L. 108–136, § 3532(a)(1), redesignatedsubsec. (e), relating to approval of certain vessel transactions before documentation of vessel, as (f).

Subsec. (f). Pub. L. 108–136, § 3532(a)(1), redesignatedsubsec. (e), relating to approval of certain vessel transactions before documentation of vessel, as (f).

2002—Subsec. (c). Pub. L. 107–295, in introductory provisions, substituted “Except as provided in section 1181 of this Appendix and in section 12106 (e) of title 46,” for “Except as provided in section 1181 of this Appendix and sections 12106 (e), 31322 (a)(1)(D), and 12106 (e) of title 46,”.

1996—Subsec. (c). Pub. L. 104–324, § 1113(e), substituted “sections 12106(e), 31322(a)(1)(D),” for “sections 31322(a)(1)(D)” in introductory provisions.

Pub. L. 104–324, § 1113(c)(1)(A), substituted “and 12106(e)” for “and 31328” in introductory provisions.

Subsec. (c)(1). Pub. L. 104–324, § 1113(c)(1)(B), struck out “mortgage,” after “sell,” in two places.

Subsec. (d). Pub. L. 104–324, § 1113(c)(2), substituted “or transfer” for “transfer, or mortgage” in par. (1) and “or transfers” for “transfers, or mortgages” in pars. (2), (3)(B), and (4).

Subsec. (e). Pub. L. 104–324, § 1136(b), added subsec. (e) relating to approval of certain vessel transactions before documentation of vessel.

Pub. L. 104–239added subsec. (e) relating to conditions for placing vessel under foreign registry without approval of Secretary.

1989—Subsec. (a). Pub. L. 101–225, § 307(3), struck out subsec. (a) which related to registration, enrollment, and licensing of vessels purchased, chartered, or leased as United States vessels and authorization of vessels to engage in the coastwise trade of the United States.

Subsec. (c)(1). Pub. L. 101–225, § 304(a), inserted “or the last documentation of which was under the laws of the United States” before semicolon at end.

Subsec. (c)(2). Pub. L. 101–225, § 304(a)(2), inserted “, or a vessel the last documentation of which was under the laws of the United States,” after “a documented vessel”.

Subsec. (d)(1), (2). Pub. L. 101–225, § 304(a)(3), substituted “in or control of” for “or control in”.

Subsec. (d)(4). Pub. L. 101–225, § 304(a)(4), added par. (4).

1988—Subsecs. (a), (b). Pub. L. 100–710, § 104(b)(1), (2), designated first and second undesignated pars. as subsecs. (a) and (b), respectively.

Subsecs. (c), (d). Pub. L. 100–710, § 104(b)(3), substituted subsecs. (c) and (d) for third, fourth, and fifth undesignated pars. which prohibited, without approval, sale, mortgage, lease, etc., to a person not a citizen of the United States, or transfer under foreign registry or flag, of vessel owned or documented under laws of United States and issuance, transfer, or assignment of bond or note secured by vessel without approval and which set forth qualifications for approval and penalties for violations of this section. Fourth undesignated par. restated in section 31328 of Title 46, Shipping.

1981—Pub. L. 97–31substituted “Secretary of Transportation” for “United States Maritime Commission”, “Commission”, and “Secretary of Commerce” wherever appearing. For prior transfers of functions, see Transfer of Functions note below.

1965—Pub. L. 89–346made it unlawful to issue, transfer, or assign a bond, note, or other evidence of indebtedness which is secured by a mortgage of a vessel to a trustee or by an assignment to a trustee of the owner’s right, title, or interest in a vessel under construction, to a person not a citizen of the United States, without the approval of the Secretary of Commerce, unless the trustee or a substitute trustee of such mortgage or assignment is approved by the Secretary of Commerce, required the Secretary to grant his approval if such trustee or substitute trustee is a bank or trust company which meets certain specified qualifications and to disapprove such trustee or substitute trustee if at any time he ceases to meet such qualifications, made it unlawful to transfer or assign such bond, note, or other evidence of indebtedness to a person not a citizen of the United States, without the approval of the Secretary, after such disapproval, prohibited the trustee or substitute trustee approved by the Secretary to operate the vessel under the mortgage or assignment without approval of the Secretary, and voided the issuance, transfer, or assignments of bonds, notes, or other evidences of indebtedness if issued, transferred, or assigned to a person not a citizen of United States in violation of this section.

1938—Act June 23, 1938, amended last two pars. generally.

1920—Act June 5, 1920, amended section generally.

1918—Act July 15, 1918, amended section generally.

Effective Date of 2003 Amendment

Amendment by Pub. L. 108–136effective Oct. 1, 2004, see section 3537(a) ofPub. L. 108–136, set out in an Effective Date note under section 53101 of Title 46, Shipping.

Effective Date of 2002 Amendment

Amendment by Pub. L. 107–295effective Jan. 1, 2003, see section 205(e) ofPub. L. 107–295, set out as a note under section 12111 of Title 46, Shipping.

Effective Date of 1988 Amendment

Amendment by Pub. L. 100–710effective Jan. 1, 1989, with certain exceptions and qualifications, and not applicable to any change in control resulting from, or which may at any time result from, any proposed plan of reorganization filed under United States bankruptcy laws prior to Nov. 23, 1988, except that transactions undertaken as a result of such plan shall continue to be governed by this section as it existed prior to Nov. 23, 1988, to the extent that this section would have governed such transactions, see section 107 ofPub. L. 100–710, set out as an Effective Date note under section 30101 of Title 46, Shipping.

Retroactive Provisions

Section 4 ofPub. L. 89–346provided that: “Bonds, notes, and other evidence of indebtedness which are secured by a mortgage of a vessel to a trustee or by an assignment to a trustee of the owner’s right, title, or interest in a vessel under construction which have heretofore been issued, transferred, or assigned, or are issued, transferred, or assigned within one year after the enactment of this Act [Nov. 8, 1965], to a person not a citizen of the United States without the approval of the Secretary of Commerce are valid in the hands of such person and the validity and preferred status of such mortgage and the validity and lawfulness of such issuance, transfer, or assignment shall not be affected by such issuance, transfer, or assignment if the trustee or a substitute trustee is approved by the Secretary of Commerce within one year after enactment of this Act [Nov. 8, 1965], under the standards for trustees specified in the amendments made by this Act to sections 9 and 37 of the Shipping Act, 1916 [sections 808 and 835 of this Appendix], and to subsection O of the Ship Mortgage Act, 1920 [section 961 of this Appendix].

“Nothing in this section shall be construed to alter retroactively any rights which were the subject matter of litigation pending on the date of enactment of this Act [Nov. 8, 1965].”

Repeals

For provisional repeal, see note set out preceding section 801 of this Appendix.

Transfer of Functions

“United States Maritime Commission” substituted in text for “United States Shipping Board”. For dissolution of Board and transfer of its functions to United States Maritime Commission, see Ex. Ord. No. 6166 and act June 29, 1936. Ex. Ord. No. 6166 is set out as a note under section 901 of Title 5, Government Organization and Employees. For subsequent transfers of functions, see Reorg. Plan No. 6 of 1949 and Reorg. Plan No. 21 of 1950, set out under section 1111 of this Appendix.