USA Law and Practice Contributed by: Seward & Kissel LLP, Seward & Kissel LLP
of five net tons or more used for fishing or cabo - tage trade must be documented with the NVDC. Among other things, the Maritime Administra - tion: • assists with government sealift programmes; • manages a reserve sealift fleet; • administers certain maritime grant pro - grammes; and • manages cargo preference activities. The Maritime Administration also administers certain Jones Act waiver programmes. Maritime Administration approval is required to transfer a US-flagged vessel to foreign ownership, flag or registry. US Customs and Border Protection is the prima - ry regulator responsible for enforcing the Jones Act restrictions on cabotage trade and for pro - viding determinations regarding cargo compli - ance with the Jones Act. 1.4 Requirements for Ownership of Vessels A US-flagged vessel must be owned by a US citizen to be documented with the NVDC. How - ever, there are different levels of citizenship with respect to certain entities and for certain trades. By way of example, for a corporation seeking to register a US-flagged vessel: • the corporation must be formed under the laws of the United States or a state thereof; • its chief executive officer must be a US citi - zen; and • no more of its directors may be non-citizens than a minority of the number needed to con - stitute a quorum of the board.
Additional citizenship requirements apply to ves - sels being used for fisheries or cabotage trade. The Jones Act regulates (among other things) cabotage trade within the United States. The Jones Act requires that vessels used for cabo - tage trade: • be built in the United States; • be at least 75%-owned by US citizens; and • be US-flagged. Additionally, the Jones Act requires that the Mas - ter, officers and 75% of the remaining crew of a vessel used for cabotage trade be US citizens. The complete rules and procedures for deter - mining compliance with the Jones Act cabotage trade restrictions are voluminous, and each case must be looked at thoroughly and independently. 1.5 Temporary Registration of Vessels US laws do not permit the temporary registration of vessels, nor will they permit dual registrations. 1.6 Registration of Mortgages With respect to US-flagged vessels, ship mort - gages are required to be recorded with the NVDC. Perfection of security interests in certain other collateral common in ship-finance trans - actions, such as certain assignments of earn - ings, may be accomplished by filing Uniform Commercial Code (UCC) financing statements in appropriate jurisdictions. 1.7 Ship Ownership and Mortgages Registry Potential creditors may request a Certificate of Ownership or Abstract of Title from the NVDC that evidences the existence of any liens that have been recorded against a US-flagged ves - sel. Generally, the only liens recorded with the NVDC are preferred mortgage liens, although US
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