U.S. Customs Agency Withdraws Obama-proposed Changes to Jones Act

Reuters

WASHINGTON, May 10 (Reuters) - U.S. Customs and Border Protection has withdrawn an Obama-era proposal to modify a law that governs shipping, which would have revoked waivers that make it easier for oil and gas operators to skirt restrictions, according to an agency bulletin published Wednesday.

For nearly 40 years the CBP has provided exemptions to the Jones Act, which mandates the use of U.S.-flagged vessels to transport merchandise between U.S. coasts. The exemptions have allowed oil and gas operators to use often cheaper, tax-free, or more readily available foreign flagged vessels.

The CBP has weighed revoking these waivers after President Barack Obama's administration proposed to put them on the chopping block two days before President Donald Trump took office.

The oil industry expressed relief about the CBP announcement. Oil and gas majors operating in the U.S. Gulf of Mexico had stepped up lobbying efforts over the last two months to urge the CBP not to remove the waivers.

“By rescinding the proposal, CBP has decided not to impose potentially serious limitations to the industry’s ability to safely, effectively and economically operate," said Erik Milito, director of upstream and industry operations for the American Petroleum Institute.

In the bulletin, CBP director Glen Vereb said that the agency received many comments in support of and opposing the proposed action and said it "should be reconsidered." (Reporting by Valerie Volcovici, Timothy Gardner and Devika Krishna Kumar; Editing by Leslie Adler)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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