The Federal Maritime Commission Investigates Foreign Vessel Flagging Laws

The Federal Maritime Commission (FMC) is currently conducting a nonadjudicatory investigation to examine the impact of foreign vessel flagging laws, regulations, and practices on the shipping conditions in the foreign trade of the US.

The FMC has expressed concerns about the wide and uneven range of foreign vessel flagging laws and practices, warning against a “race to the bottom” where countries compete by lowering standards and compliance requirements to gain a competitive edge.

According to the FMC, many nations are offering to register and flag vessels with little to no oversight or regulation, leading to potential revenue gains from fees and reduced expenses related to vessel inspection and compliance with maintenance and safety requirements.

Despite efforts by the International Maritime Organization (IMO), the FMC believes that meaningful change and deterrence have not been achieved in addressing this global problem. The FMC criticized the IMO for its patchwork policies and ineffective enforcement mechanisms.

The FMC highlights issues such as flags of convenience, open registries, fraudulent registries, and the shadow fleet as areas of concern within the maritime industry. The lack of authority for the IMO to enforce vessel registry standards or penalize non-compliant nations has led the FMC to call for a comprehensive and enforceable approach to address these issues.

The investigation initiated by the FMC will begin with a 90-day public comment period, allowing stakeholders to provide input and feedback on the matter.