Profoundly damaging announcement by U.S. Customs and Border Protection (CBP) puts foreign companies first and American companies and workers last.
The Offshore Marine Service Association (OMSA) today responded to an announcement by U.S. Customs and Border Protection (CBP) to withdraw its second proposal to modify and revoke letter rulings. This decision hurts American workers, vessel owners, and U.S. shipbuilders and prevents the creation of 3,200 new American jobs.
Obliging to foreign interests, the Office of Management and Budget (OMB) recommended a regulatory review process that will significantly delay the lawful and correct enforcement of the Jones Act which requires good moving between one U.S. port and another be moved on vessels that are U.S. built, U.S. owned and U.S. crewed. This delay will only hurt American mariners and shipbuilders while continuing to benefit foreign vessels, shipbuilders and crews, domestically operating contrary to U.S. law.
"The offshore service industry is deeply disappointed in the Administration's decision to delay the revocation of letter rulings that would correctly enforce the Jones Act and put American mariners first," said Aaron Smith, President and CEO of the Offshore Marine Service Association. "This decision to move to a regulatory review process is deeply damaging to the American crews, shipyards, and companies who have waited more than eight years while the Administration studied taking corrective action. Additionally, during this time our industry has invested more than $2 billion to ensure offshore production and exploration would not be disrupted, while foreign interests lobbied the U.S. government to promote their own economic interests through their promotion of false statements and scare tactics. We call on President Trump to take immediate action and correct these damaging rulings that have continued to put foreign companies first and American companies and workers last."
American mariners and shipbuilders are supported by industry and government leaders that understand the importance of restoring American jobs to the American economy and supporting the lawful interpretation of the Jones Act.
“We are disappointed the Administration chose to indefinitely kick this job-destroying regulatory can down the road,” said Matthew Paxton, President of SCA. “The correct interpretation and enforcement of the Jones Act is critical to the capitalization of the commercial shipbuilding and repair industry, and its industrial base, which is crucial to U.S. homeland and national security. This Administration's needless delay only hurts the more than 400,000 men and women of the U.S. shipyard industry.”
“The Administration’s decision today to delay the revocation of letter rulings impacting the lawful enforcement of the Jones Act in the Gulf of Mexico
is extremely disappointing. This delay and move to a regulatory review process will damage our American mariners and domestic maritime industry, which is essential for U.S. economic security and job creation,” said Tom Allegretti, Chairman of the American Maritime Partnership. “The domestic maritime industry calls on President Trump and his Administration to take immediate action to return these jobs to our American mariners.”
Numerous Congressional leaders vocalized their support for this corrective action taken by CBP, noting both the economic and national security benefits provided and the urgency for stopping foreign interests from influencing U.S. law. Copies of the respective letters submitted to Department of Homeland Security Secretary Kelly from 33 bipartisan members of the House of Representatives and 10 bipartisan Senators can be found here and here.
"The decision to change course on something so critical to the American maritime industry can only be explained as a move by government bureaucrats and credited to their extraordinary failure to understand the facts," said Rep. Duncan Hunter. "The Jones Act is a necessity for the protection and advancement of American maritime and this decision contradicts both the law and the President's own commitment in support of U.S. workers. It's a tremendous error in decision making that exemplifies what's wrong with the federal government."
OMSA continues to stand behind the facts and urges the Administration to support U.S. jobs, U.S. security, and the sovereignty of the nation by taking immediate action to enforce the rule of law.
Know the FACTS
U.S. vessels have the capacity to meet industry’s needs will continue to be tied up to the dock with American workers sent home while foreign vessels unlawfully profit with foreign crews at work.
- FACT: Following the 2009 notice, U.S. companies invested over $2 billion to build or retrofit 31 vessels to services the subsea needs identified by CBP.
- FACT: Over the last 24 months, many foreign owners have left the Gulf Coast region due to their high debt loads.
- FACT: According to IHS Petrodata Construction Vessel database, an average of 19.8 vessels were working in the Gulf Coast region over the past 5 years. U.S. companies have 31 new or retrofitted vessels ready to meet these needs.
Foreign interests influenced this decision through their distortion and distribution of false statements, which based their claims on matters, including heavy lift and pipelaying activities, which were not even included in the letter rulings under review.
- FACT: Rulings from the past three decades have put foreign companies first and American companies last.
- FACT: With the influx of cheap and foreign labor to carry out these services, it has created an unlevel playing field for U.S. companies, stifling job growth and economic security. We cannot afford this for our nation.
- FACT: Many of the foreign-vessels deployed use cheap labor do not pay taxes. Comparatively, U.S. companies are paying 36.5% tax rates and employ U.S. mariners at wages three times that of the cheap foreign labor used by foreign ship owners.
- FACT: This is harmful to both our economic and national security.
- The CBP Revocation notice was not done in a rushed manner and followed the Congressionally mandated process for revoking letter rulings.
- FACT: For eight years, the Washington, DC “swamp” with foreign interests at stake held up this corrective action.
- FACT: CBP’s January 18 notice, followed by the comment and review period, is the lawful approach to restoring the correct interpretation of the Jones Act. Over the past 30 years, a vicious cycle of legally invalid letter rulings by CBP has created greater dependence on foreign flagged ships at the expense of U.S. mariners, ship owners, and shipyards.
- FACT: The government has delayed restoring American jobs to the American economy for nearly eight years. This was more than enough time for CBP to review and study this issue.
- FACT: At the time the letter rulings were issued, it was done so in an opaque and private manner between the requesting party and CBP without any period for public comment or analysis by CBP to determine the impact to the U.S. marine community. U.S. mariners, shipyard workers, shipyards, and ship-owners were given no opportunity for comment or dissent when CBP issued the damaging letters. The 1625(c) process provided foreign interests substantially more “due process” than Americans received.
This further delay will hurt American mariners and shipbuilders while continuing to benefit foreign workers.