I RECENTLY read yet another reference to the much-maligned, "Jones Act," in a comment about rules and laws affecting cruise ships and cruising. I see that particular reference often. Having a legal background, I was at least vaguely aware that the act referred to ships and shipping and U.S. ports. More specifically, I knew that it also was "protectionist" in nature, as it placed restrictions on foreign ships in U.S. ports. But curiosity got the better of me. Something back in my long-ago memory didn't ring true here. I am not a maritime lawyer by any stretch of the imagination. 😅 My purpose here is as much entertainment as informational. I seriously doubt that this piece will change anybody's mind about their next cruise. So here is my take: As popular as it is to confidently throw out "The Jones Act," when opining about cruise ships rules, it is simply wrong!
The Passenger Vessel Services Act was enacted many years before The Jones Act
THE ACTUAL law these commenters are referring to is "The Passenger Vessel Services Act," of 1886 (a/k/a, PVSA), enacted many years before the Jones Act! The Jones Act (also sometimes known as "The Merchant Marine Act of 1920,) was enacted in 1920. Its primary sponsor was U.S. Senator Wesley Jones, a Washington State Republican. Its stated purpose was to stimulate and provide a strong U.S. Merchant Marine for commerce and national defense, following WWI (when much of the industry had been diverted to military use and shipbuilding, and suffered substantial depletion). However, when Jones was senator, Alaska was not yet a state (Alaska gained statehood in 1956). The Senator's (and former Congressman) other legislative activities makes it appear just as (or more) likely that his own motivation was to favor the Washington State shipping industry, ensuring its continued monopoly on shipping goods to Alaska by sea. The similarity in the language of the Jones Act suggests that its text was probably adopted from the PVSA's prior language.
The Jones Act says that a non-U.S. vessel may not transport goods from a U.S. port to another U.S. port
BOTH THE Jones Act and the (prior) Passenger Vessel Services Act have now been codified (added and organized into the U.S. Code system) under Section 46 U.S.C. They remain separate, but very similar provisions. The Jones Act essentially says that a non-U.S. registered ("flagged") vessel may not transport goods from a U.S. port to another U.S. port. Unless one considers the tons of food aboard cruise ships merchandise, technically, the Jones has little application to the industry.
IT IS the Passenger Vessel Services Act that really applies here. The applicable provision is 46 U.S.C., section 55103, which states (in relevant part): "a vessel may not transport passengers between ports or places in the United States . . . unless the vessel . . . is wholly owned by citizens of the United States." When last amended in 2006, the penalty for transporting passengers in violation of this provision was $300 per passenger (it is indexed for inflation - around $800 today). The actually applicable law - the PSVA - sponsored by Maine Republican Congressman, Nelson Dingley, was enacted 34 years before the Jones Act!
Why don't U.S. based cruise lines just flag their ships as U.S. ships?
THERE ARE exceptions and interpretations, which may go a long way toward explaining some of the itineraries and ports of departure and return of many of the cruise lines, from U.S. ports. For example, the PVSA has been interpreted to mean that a non-U.S. ship may depart from and return to a U.S. port, as long as passengers do not permanently leave the ship at any of the ports. So day excursions are not treated as a passenger disembarking from the ship). This explains most of the Caribbean and Bermuda cruises, as well as the "U.S." east coast cruises. The law has also been interpreted not to apply if the ship stops at (at least one) "distant" non-U.S. port during its trip. "Distant" means a port that is not in "North America." U.S. customs considers Bermuda, Bahamas and most Caribbean Ports (except Aruba, Bonaire, and Curacao - the so-called "ABC" cruise) to be part of North America. But the rule may partially explain a transatlantic cruise which may make multiple U.S. stops. European destinations almost all start and finish in non-U.S. ports, so the PVSA would not apply.
WHY IS this even an issue? Why don't U.S. based cruise lines just flag their ships as U.S. ships? Well, there are several reasons. First, the text of the law suggests that the statutory definition of "U.S." based ships means that at least 75% of its ownership U.S. based, and the majority of the crew must be U.S. citizens. For anybody who has ever been on a cruise, you don't need to be a math prodigy to see that that won't work. 😀
Opting to register a ship in one of the "open-registry" countries gives the owner of the vessel (especially cruise ships) some significant advantages
FOR A ship to be US-flagged (registered) the ship must have been built in a US shipyard. The majority of large cruise ships are built in either Italy or Germany, (US shipyards primarily build military and cargo vessels). Most nations have a similar requirement (that in order to be registered in the country, the ship must have been built there), which is known as "closed registry." A few countries, however, have "open registries," including such countries as Panama, Bahamas, Bermuda and Malta. Because "I am a Celebrity," I will note here, that all but Celebrity's 3 "specialty" ships are registered in Valletta, Malta.
OPTING TO register a ship in one of the "open-registry" countries gives the owner of the vessel (especially cruise ships) some significant advantages. In a "white paper" by Caitlin Burke (I had some difficulty establishing whether this was for sure her, but it appears she graduated from The University of Florida in 2009, and then from The University of Miami Law School in 2014), the author notes that "by opting to re-flag in a new nation, a vessel owner becomes subject to the safety, labor and environmental codes of that nation." Not coincidentally, the most popular of the open registry countries tend to be those with the most liberal tax, labor, safety and environmental codes. This means that if they wish, cruise lines may pay workers lower wages (lower than U.S. minimum standards), require them to work longer hours, and allow them less leave time.
Not coincidentally, the most popular of the open registry countries tend to be those with the most liberal tax, labor, safety and environmental codes
THERE IS also the issue of liability (mainly to passengers for injury to person or property). According to Burke, "the legal rights and remedies of U.S. passengers are greatly inhibited." In keeping with her observations, The Federal Maritime Commission has noted that it has no authority over: "passenger line vessel operations, safety issues, amenities onboard vessels or fare levels," and that "for claims against cruise lines based in foreign nations, foreign laws may apply and claims may be resolved abroad." This should not come as a surprise for anyone who has slogged through the contract between you as a passenger and the cruise line (and you should so slog).
SO THERE you are. Your little bit of Cruise Line Legal trivia for the day. 😎 And remember, it is not the Jones Act. It's the PVSA! Cruise on.
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