Category: Mainbrace | October 2024

Note from the Editor

William R. Bennett III, Editor

Political turmoil in the United States, war in the Middle East, and invasion and occupation in Europe. The time period: 1973–74; which confirms the aphorism that Winston Churchill repeated in a speech he gave in 1948 to the British House of Commons, that “those that fail to learn from history are doomed to repeat it.” If you were H. G. Wells’ Time Traveler and transported in time from 1974 to 2024 and began reading headlines in the newspaper you would be reasonable to conclude that not much has changed. However, if you were a shipping man in 1974 and joined the Time Traveler, you would notice massive change.

In 1974, vessels built in the United States, Great Britain, and Denmark dominated the list of new ship buildings with no mention of China. Today, vessels built in China dominate the list of new launches. And, in 1974 the largest container ship in the world was the Hamburg Express with a capacity of 2984 twenty-foot equivalent units (“TEUs”). Today, the largest container ship in the world is the MSC Irina with a capacity of 24,346 TEU–a whopping increase of 800 percent. But, the most important changes that have occurred in the maritime industry involve the rules, regulations, and norms of the international maritime shipping community focused on safety, starting with the 1974 SOLAS Convention, which specified minimum safety standards for the construction, equipment, and operation of ships.

Change for the sake of change is rarely beneficial. Thoughtful and purposeful change directed by the stakeholders in any venture typically ends with positive results. The maritime industry is a great example. The rules, regulations, conventions, and industry norms promulgated and promoted by the international shipping community–International Maritime Organization, Flag State, classification societies, owners, managers, etc.,—which primarily focus on safety of personnel, the environment, and the vessel, while also considering the commercial implications of such rules, have been extremely effective since 1974 in reducing harm to personnel, the environment, and vessels and, consequently—in my humble opinion—the maritime industry is a model for other industries to follow when change is necessary.

Hurricanes and Their Cost on the Maritime Industry

Keith B. Letourneau ●

Aside from the destruction that flows from it, how does a hurricane along the Gulf Coast affect the maritime industry that operates hundreds of terminals and moves thousands of ocean-going ships and inland tows along its waterways?

With the approach of a hurricane, the U.S. Coast Guard Captain of the Port will begin setting various port conditions advising the public and industry of the storm’s anticipated landfall. Once the port condition reaches category Zulu, no further vessel movements are permitted within the port. By that time, marine terminal operators will have shut down operations and ordered vessels to depart their berths, and ocean-going vessels will have left the port to evade or ride out the storm because such vessels are safer underway than they are moored or anchored. Inland towboats and barges will also move to alternative safe harbors via the intracoastal waterway or inland rivers if time permits. Those that remain hunker down at barge fleeting areas, where extra tiedowns are employed and tugboats often standby to provide extra power to keep the barge fleets intact. 

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Risk Management Tools for Maritime Companies

COMPLIANCE AUDIT PROGRAM

Blank Rome Maritime has developed a flexible, fixed-fee Compliance Audit Program to help maritime companies mitigate the escalating risks in the maritime regulatory environment. The program provides concrete, practical guidance tailored to your operations to strengthen your regulatory compliance systems and minimize the risk of your company becoming an enforcement statistic. To learn how the Compliance Audit Program can help your company, please view our Compliance Audit Program flyer.

MARITIME CYBERSECURITY REVIEW PROGRAM

Blank Rome provides a comprehensive solution for protecting your company’s property and reputation from the unprecedented cybersecurity challenges present in today’s global digital economy. Our multidisciplinary team of leading cybersecurity and data privacy professionals advises clients on the potential consequences of cybersecurity threats and how to implement comprehensive measures for mitigating cyber risks, prepare customized strategy and action plans, and provide ongoing support and maintenance to promote cybersecurity and cyber risk management awareness. Blank Rome’s maritime cyber risk management team has the capability to address cybersecurity issues associated with both land-based systems and systems onboard ships, including the implementation of the Guidelines on Cyber Security Onboard Ships and the IMO Guidelines on Maritime Cyber Risk Management in Safety Management Systems. To learn how Blank Rome’s Maritime Cyber Risk Management Program can help your company, please visit blankrome.com/cybersecurity.

TRADE SANCTIONS AND EXPORT COMPLIANCE REVIEW PROGRAM

Blank Rome’s Trade Sanctions and Export Compliance Review Program ensures that companies in the maritime, transportation, offshore, and commodities fields do not fall afoul of U.S. trade law requirements. U.S. requirements for trading with Iran, Cuba, Russia, Syria, and other hotspots change rapidly, and U.S. limits on banking and financial services, and restrictions on exports of U.S. goods, software, and technology, impact our shipping and energy clients daily. Our team will review and update our clients’ internal policies and procedures for complying with these rules on a fixed-fee basis. When needed, our trade team brings extensive experience in compliance audits and planning, investigations and enforcement matters, and government relations, tailored to provide practical and businesslike solutions for shipping, trading, and energy clients worldwide. To learn how the Trade Sanctions and Export Compliance Review Program can help your company, please visit blankrome.com/services/cross-border-international/international-trade or contact Matthew J. Thomas (matthew.thomas@blankrome.com, 202.772.5971).

EPA Signs Final Vessel Incidental Discharge National Standards of Performance Rule

Jeanne M. Grasso and Holli B. Packer ●

On September 20, 2024, the Environmental Protection Agency (“EPA”) signed a highly anticipated final rule establishing national standards for incidental discharges from vessels into waters of the United States, albeit nearly four years after its statutory deadline. However, existing requirements included in the 2013 Vessel General Permit (“VGP”) will remain in place until these new EPA and forthcoming U.S. Coast Guard regulations under Clean Water Act section 312(p) are final, effective, and enforceable. The U.S. Coast Guard has two years to issue its final rule implementing EPA’s standards.

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The Arctic Shipping Frontier: Regulatory and Operational Challenges to Consider

Vanessa C. DiDomenico ●

Heavy fuel oil (“HFO”), commonly known as bunker fuel or residual fuel oil, has been widely used by vessels for decades due to its low cost and ready availability. However, due to its high sulfur and heavy metal content, the International Maritime Organization (“IMO”) has steadily enacted regulations to limit the sulfur content in fuels, and the ability to burn or carry HFO in sensitive areas, such as the Arctic.

Recently, on July 1, 2024, an international ban on the use of HFO in the Arctic went into effect. This ban, implemented by resolution MEPC.329(76), was adopted on June 17, 2021, by the IMO’s Marine Environmental Protection Committee. The resolution amended Annex 1 of the International Convention for the Prevention of Pollution from Ships (“MARPOL”), adding Regulation 43A, “Special requirements for the use and carriage of oils as fuel in Arctic waters.” Regulation 43A prohibits the use and carriage for use as fuel of oils having a density at 15°C higher than 900 kg/m3 or a kinematic viscosity at 50°C higher than 180 mm2/s in Arctic waters.[1] However, there are several exemptions and waivers to the HFO ban. First, ships engaged in securing the safety of ships, or in search and rescue operations, and ships dedicated to oil spill preparedness and response are exempt. Additionally, ships that meet certain construction standards[2] for fuel oil tank protection, must comply on or after July 1, 2029. Lastly, a Party to MARPOL with a coastline bordering Arctic waters may temporarily waive the requirements for ships flying its flag while operating in waters subject to that Party’s sovereignty or jurisdiction through July 1, 2029.

With increasing geopolitical tensions affecting shipping lanes in the Middle East, the possibility exists more ships may consider using the Northern Sea Route through Arctic waters to avoid risks near areas in conflict. In fact, according to the Arctic Council Working Group on the Protection of the Arctic Marine Environment (“PAME”), “[t]he number of unique ships entering the Arctic Polar Code area from 2013 to 2023 increased by 37%, [to] around 500 ships.”[3]

The Northern Sea Route, most commonly used in September between the western part of Eurasia and the Asia-Pacific region, is shorter than the journey through the Suez Canal, or detour around Africa’s Cape of Good Hope. Yet that route presents its own regulatory and operational considerations. In particular, as discussed above, ship owners and operators must ensure their vessels meet the construction standard requirements of Regulation 43A to use HFO or use alternative fuel to remain compliant. Additionally, the sensitive Arctic environment imposes more stringent requirements in other MARPOL Annexes, such as Annex II, control of pollution by noxious liquid substances in bulk; Annex IV, sewage; and Annex V, garbage. Vessel owners and operators should also ensure compliance with the operational and structural requirements of the Polar Code when operating in this region.

Notably, due to the harsh weather conditions, and limited aid in the region, operating in the Arctic requires specific compulsory vessel documentation and certificates, training and manning, and life-saving appliances, among other prerequisites. As political forces shift maritime trading patterns, vessel owners and operators should exercise added due diligence in evaluating their vessels’ ability to meet the regulatory and operational requirements for transiting the Northern Sea Route, which, while now open, at times remains an unforgiving realm.

[1] Arctic waters are defined in MARPOL Annex 1 Regulation 46.2.

[2] MARPOL Annex I, Regulation 12A; or Polar Code Chapter 1, part II-A, Regulation 1.2.1.

[3] PAME, Arctic Shipping Update: 37% Increase in Ships in the Arctic Over 10 Years, (Jan. 31, 2024), available at: https://arctic-council.org/news/increase-in-arctic-shipping/.

U.S. Department of Commerce Proposes Expanded Export Controls Targeting Military, Intelligence, and Law Enforcement End Users in China and Elsewhere

Anthony Rapa, Alan G. Kashdan, and Brendan S. Saslow ●


Overview

On July 29, 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) issued proposed rules that would significantly expand controls under the Export Administration Regulations (“EAR”) regarding exports for certain end uses, certain end users, and U.S. person activities.

At a high level, the proposed EAR modifications would (1) add new controlled categories of “military support end users”, “intelligence end users”, and “foreign-security end users”; (2) expand the items and country destinations that would be subject to these end use and end user prohibitions; and (3) modify the Commerce Control List (“CCL”) to add certain surveillance items that can be used to violate human rights. BIS also proposes to modify and expand the controls on activities of U.S. persons in section 744.6 of the EAR to complement the changes proposed to the end-use and end-user controls.

Continue reading “U.S. Department of Commerce Proposes Expanded Export Controls Targeting Military, Intelligence, and Law Enforcement End Users in China and Elsewhere”

USCG Considers Organism Viability Testing Methods to Achieve Type Approval of Ballast Water Management Systems

Jeanne M. Grasso and Holli B. Packer  ●

On August 21, 2024, the U.S. Coast Guard (“USCG”) outlined its intent to prepare the “Viability Testing Method Consideration for Acceptance Programmatic Environmental Impact Statement (“PEIS”)” in the Federal Register (89 Fed. Reg. 67646), which will be used to evaluate, and potentially adopt, organism viability testing methods to demonstrate that ballast water discharges meet required performance standards. Comments were due on or before October 7, 2024.

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Chevron Deference Tossed Overboard—What Does It Really Mean?

Jonathan K. Waldron, Dana S. Merkel, and Holli B. Packer ●


The Supreme Court of the United States’ June 28, 2024, decision in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024), dealt a blow to the “Chevron deference.” Loper Bright eliminated the judicial mandate that courts defer to an agency’s interpretation of ambiguous language in statutes administered by that agency. Notwithstanding, Loper Bright confirmed that courts can continue to accord respect to agency interpretations of law in certain circumstances.

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When Is a Contract Maritime and Why Is That Important?

Keith B. Letourneau ●

In the Fifth Circuit, for the longest time, deciding whether a contract was maritime involved assessing a litany of factors derived from the court’s Davis & Sons v. Gulf Oil Corporation case, specifically:

  1. “What does the specific work order in effect at the time of the injury provide? 
  2. What work did the crew assigned under the work order actually do? 
  3. Was the crew assigned to work aboard a vessel in navigable waters? 
  4. To what extent did the work being done relate to the mission of that vessel? 
  5. What was the principal work of the injured worker?
  6. What work was the injured worker actually doing at the time of injury?”
Continue reading “When Is a Contract Maritime and Why Is That Important?”

News & Rankings

Blank Rome Maritime Practice Group and Co-Chair Receive Lexology’s 2024 North America Awards

Blank Rome’s Maritime practice group, as well as Thomas H. Belknap, Jr., co-chair of the Maritime practice group, were recipients of Lexology’s 2024 North America Awards. <Read More>

Blank Rome Attorneys Recognized in 2025 Best Lawyers in America®

Blank Rome was recognized in the 2025 Best Lawyers in America survey, which ranked 225 firm attorneys in the annual categories of “Lawyers of the Year,” “Ones to Watch,” and “Best Lawyers” in 50 practice groups across 13 regions. <Read More>

Blank Rome Attorneys and Practices Highly Ranked in The Legal 500 United States 2024

Blank Rome’s Maritime group and attorneys have been highly ranked and recommended in The Legal 500 United States 2024. Researchers at The Legal 500 conduct annual, in-depth market research and gather information from individual law firms as well as feedback from peers and clients to form an objective analysis and prepare comprehensive rankings and editorial of the U.S. legal market.

2024 Firm Rankings

TOP-TIER FIRM

  •  Transport: Shipping  –  Finance | Transport: Shipping  –  Litigation and Regulation

HALL OF FAME ATTORNEYS

  • Anthony Salgado (Transport: Shipping  –  Finance)
  • Jeanne Grasso (Transport: Shipping  –  Litigation and Regulation)
  • John Kimball (Transport: Shipping  –  Litigation and Regulation)

<Read More>

Chambers USA 2024 Honors Blank Rome Maritime Attorneys and Practices

Blank Rome was nationally ranked by Chambers USA 2024 in the following areas:

  •  Transportation: Shipping/Maritime: Finance
  •  Transportation: Shipping/Maritime: Litigation (New York) – Nationwide – #1 ranking
  •  Transportation: Shipping/Maritime: Litigation (outside New York) – Nationwide – #1 ranking
  •  Transportation: Shipping/Maritime: Regulatory – #1 ranking

Blank Rome Maritime attorneys Thomas H. Belknap, Michael Bell, William R. Bennett, Jeanne Grasso, John D. Kimball, Keith B. Letourneau, Richard Singleton, Anthony Salgado, Douglas Shoemaker, Matthew J. Thomas, Jonathan K. Waldron, and Lauren Wilgus were ranked as “leaders in their field.”

<Read More>

The rankings were assessed according to technical legal ability, professional conduct, client service, commercial astuteness, diligence, commitment, and other qualities most valued by clients.