WASHINGTON — While he was in Washington, D.C., for the National Governors Association conference and other meetings with a number of federal officials, Governor Albert Bryan signed a Memo of Understanding (MOU) with the Northeast Maritime Institute to implement a maritime initiative that will make the U.S. Virgin Islands the first international open ship registry in the United States.
“This is a partnership with local, national and global implications that will increase the strategic importance of the Virgin Islands to the country’s maritime industry,” Governor Bryan said before a signing ceremony in the nation’s capitol. “In addition to the economic boost and jobs it will bring to the territory, it gives the United States a commercially strategic ship registry in the Caribbean and will enhance and boost the global supply chain.”
The “Revitalization Plan for U.S. Maritime Trade, Commerce and Strategic Competition” is designed to provide economic stability and environmental protection, as well as to revitalize the position of the United States as a major competitor in international maritime trade and commerce while enhancing national security, both domestically and internationally, according to the Northeast Maritime Institute, a private, co-educational maritime college that offers degrees in Maritime Science.
Because the territory is fully exempt from the Jones Act, which requires that the majority of crew members on ships passing between U.S. ports be American and sets forth other regulations, it is uniquely positioned to be an international open registry port.
A ship registry refers to the flag a ship flies while out on the high seas, and an open ship registry would allow foreign vessels to register under the U.S. Virgin Islands flag.
In general, open registry countries do not require ship owners to have any national, social or economic connection to the country they register ships in, meaning the ship may never call on the country, may not have any crew from the country or even be owned by a company doing any significant business in the country.
In response to the announcement, International Organization of Masters, Mates and Pilots Communications Director Lisa Rosenthal issued a statement in opposition of the plan.
“On behalf of the licensed and unlicensed American merchant mariners who have proudly and without fail served our country since its founding, we oppose in the strongest possible terms the creation of an open registry in the Virgin Islands, a territory of the United States,” the release stated.
“Open registries exist so that shipowners can increase their profits by avoiding the same rules, regulations, tax obligations and manning requirements that attach to a national flag fleet. This latest effort is nothing more than an exercise in labor arbitrage designed to generate registry fees and to enrich foreign shipowners at the expense of American workers and America’s national interest.”
According to the International Transport Workers’ Federation, an open registry can allow a vessel without a “genuine link” to the country to register under the flag, which is known as a flag of convenience.
“We call upon the Department of Defense, the Maritime Administration, the Biden Administration and the Congress to reject any suggestion that United States Virgin Islands-flag vessels be treated as if they are U.S. flag and U.S. crewed vessels for any purpose or for any program,” the release said.
Eight union and maritime officials signed in support of the release including:
• David Connolly, Sailors Union of the Pacific president
• Paul Doell, American Maritime Officers president
• Daniel Duncan, Maritime Trades Department secretary-treasurer
• Don Marcus, International Organization of Masters, Mates and Pilots president
• Anthony Poplawski, Marine Fireman’s Union president
• Greg Regan, Transportation Trades Department president
• Michael Sacco, Seafarers International Union president
• Adam Vokac, Marine Engineers’ Beneficial Association president
“We have no comment at this time as this initiative is still early in its development,” Government House Communications Director Richard Motta said when asked for comment on the International Organization of Masters, Mates and Pilots release.
Meanwhile, James Levantino, writing in JD Supra, said Bryan’s plans for an open ship registry would likely be fought in the courts as well.
“As a general rule, the coastwise laws apply to the United States, including the island territories. An exception to this general rule is that the coastwise laws do not apply to the U.S. Virgin Islands, due to a provision included in the Merchant Marine Act of 1920 in consideration of the territory purchased from Denmark three years prior in 1917,” Levantino wrote. “The Merchant Marine Act of 1920, commonly referred to as the “Jones Act,” prohibits the transportation of merchandise between coastwise points in the United States on any vessel that is not owned by U.S. citizens; built in the U.S.; documented under the laws of the U.S.; and crewed by U.S. licensed mariners.”
To accommodate the fledgling island and its inhabitants, Congress sought to make the USVI an exception to the rule to permit cargo commonly transported about the Caribbean to be unladen in the Virgin Islands, Levantino wrote.
“Congress did not, however, provide an exception to the U.S. Constitution or the vessel documentation laws that are applicable to all U.S. states, territories, islands, and vessels,” he said.
The U.S. Virgin Islands launch of an open international ship registry is one of six proposed actions outlined in “A Revitalization Plan for U.S. Maritime Trade, Commerce, and Strategic Competition,” a report published by The Northeast Maritime Institute in December.
Founded in 1981, the private school offers an associate’s degree in nautical science.
According to the Massachusetts-based college, the report was designed to provide economic stability and environmental protection. It also was designed to revitalize the U.S. position as a major competitor in international maritime trade and commerce while enhancing national security, both domestically and internationally.
In addition to creating an international open registry in the USVI, the Revitalization Plan includes:
• Developing a short sea transshipment hub in the Caribbean to alleviate supply chain congestion by moving a portion of east coast distribution from land to sea and increasing the number of ports importing goods from overseas.
• Building public/private/international partnerships to address strategic maritime issues, increase transparency and enforce legal and ethical standards.
• Establishing and implementing a green shipping strategy, including decarbonization of the U.S.-flagged fleet.
• Establishing a Maritime Venture Capital Fund to finance commercially advanced technologies that solve maritime and ocean industry problems with a focus on environmental vulnerabilities.
• Modernizing the maritime workforce by deploying state of the art education and training tools in the US and abroad.