Coast Guard and Maritime Transportation Act of 2006

President Bush has signed into law the Coast Guard and Maritime Transportation Act of 2006 (H.R. 889). Among the provisions in the legislation are the following:

(1) Developers of LNG import facilities will get a higher priority if they agree to be supplied by US-flag LNG vessels;

(2) Only US-flag vessels will be allowed to engage in any activity performed in connection with the mooring or unmooring of a mobile offshore drilling unit (MODU) located over the US outer continental shelf or the transportation of personnel or merchandise to or from a point in the United States from or to such MODU;

(3) Use of foreign citizens as riding gangs would be allowed under certain conditions on US-flag vessels when US citizens or residents are unavailable to complete the work, but for not more than 60 days each calendar year;

(4) Monies are authorized for development of an alternative AIS transponder/wireless maritime data device and the FCC is encouraged to finalize its rulemaking on licensee use of AIS frequency bands;

(5) Persons who release into a waterway an object that creates an obstruction to navigation would be required to promptly notify the Coast Guard;

(6) Limits of liability for oil spills from vessels would be increased – for single-hull tankers to the greater of $3,000 per gross ton or $22 million – for double-hull tankers to the greater of $1,900 per gross ton or $16 million – for other vessels to the greater of $950 per gross ton or $800,000; and

(7) Application of the oil spill response plan requirement to nontank vessels has been clarified.

Note: Ship owners and operators and insurers should pay particular attention to the increase in the limits of liability. While the requirements relating to US Certificates of Financial Responsibility (COFRs) will not change until the regulations are amended, the maximum potential liability for an oil spill (even if the limits of liability are not broken) have been increased, effective immediately. Those owners and operators who were only minimally insured should consider seeking increases in coverage. Source: HK Law