Tag: Federal Maritime Commission

FMC Announces Investigation Into Flags of Convenience and Unfavorable Conditions Created by Flagging Practices

Matthew J. Thomas, Jeanne M. Grasso, Kierstan L. Carlson, and Natalie M. Radabaugh ●

The U.S. Federal Maritime Commission (“FMC”) announced on May 21, 2025 that it is initiating a non-adjudicatory investigation into whether the: 1) vessel flagging laws, regulations, and/or practices of certain foreign governments, including the so-called flags of convenience (“FOC” or “open registries”), or 2) competitive methods employed by owners, operators, agents, or masters of foreign-flag vessels, are creating unfavorable shipping conditions in the foreign trade of the United States (the “Notice”).

The investigation includes a 90-day public comment period, which ends on August 20, 2025. 

FMC’s “Section 19” Trade Authority

Section 19 of the Merchant Marine Act of 1920, 46 U.S.C. § 42101 et seq., authorizes the FMC to evaluate conditions that affect U.S. shipping in foreign trade and to issue regulations or take action to address such conditions. Potential remedies include port fees up to one million U.S. dollars, limits on voyages to and from U.S. ports or the amount or type of cargo carried, and other trade restrictions.

The FMC exercised this authority frequently in the 1980s and 90s (before the sell-off of the major U.S. liner operators to foreign buyers) to force market-opening concessions and eliminate discriminatory fees and trade barriers that impeded U.S. shipping companies’ competitiveness in overseas. However, these powers have been left nearly dormant for the past two decades.

Continue reading “FMC Announces Investigation Into Flags of Convenience and Unfavorable Conditions Created by Flagging Practices”

The FMC Announces Investigation into Flags of Convenience and Unfavorable Conditions Created by Flagging Practices

Matthew J. Thomas, Jeanne M. Grasso, Kierstan L. Carlson, Natalie M. Radabaugh ●

The U.S. Federal Maritime Commission (“FMC”) announced on May 21, 2025 that it is initiating a non-adjudicatory investigation into whether the: 1) vessel flagging laws, regulations, and/or practices of certain foreign governments, including the so-called flags of convenience, or 2) competitive methods employed by owners, operators, agents, or masters of foreign-flag vessels, are creating unfavorable shipping conditions in the foreign trade of the United States.

The investigation includes a 90-day public comment period, which ends on August 20, 2025. 

FMC’s “Section 19” Trade Authority

Section 19 of the Merchant Marine Act of 1920, 46 U.S.C. § 42101 et seq., authorizes the FMC to evaluate conditions that affect shipping in the U.S. foreign trade and to issue regulations or take action to address such conditions. Potential remedies include port fees up to one million dollars, limits on voyages to and from U.S. ports or the amount or type of cargo carried, and other trade restrictions.

The FMC exercised this authority frequently in the 1980s and 90s (before the sell-off of the major U.S. liner operators to foreign buyers) to force market-opening concessions and eliminate discriminatory fees and trade barriers that impeded U.S. shipping companies’ competitiveness overseas. However, these powers have been left nearly dormant for the past two decades.

The current investigation does not target particular flag States or propose any remedial measures; rather, it is a non-adjudicatory investigation pursuant to 46 C.F.R. Part 502, Subpart R, which allows the FMC to request information, conduct hearings, issue subpoenas, conduct depositions, and issue reports, at its discretion.

To read or download the full client alert, please visit our website.

All Aboard! Major Shipping Lines Secure Antitrust Immunity for TradeLens Blockchain Agreement

Jeremy A. Herschaft and Matthew J. Thomas

February 6, 2020, marked an important milestone for the implementation of blockchain technology in the container shipping sector, as the Federal Maritime Commission (“FMC”) completed its review of an agreement among five major carriers to collaborate on a new blockchain platform called “TradeLens,” which aims to modernize the international logistics arena. Blockchain itself has already received considerable attention in other commercial areas (particularly digital currencies), and we have previously penned various articles on the basic structure of the technology, including Heads or Tails? Making Sense of Crypto-Tokens Issued by Emerging Blockchain Companies (Mainbrace, April 2019). The purpose of this article will specifically focus on the TradeLens concept, which leverages the shipping industry’s unique antitrust exemption to create standardized blockchain tools for a number of major carriers.

The TradeLens Concept

TradeLens was launched on August 9, 2018, through a joint collaboration between Maersk GTD and IBM. The TradeLens model seeks to apply distributed ledger technology to the global logistics industry and is described as an effort to “reduce the cost of global shipping, improve visibility across supply chains and eliminate inefficiencies stemming from paper-based processes. In short, to bring global supply chains into a more connected and digitized state—for everyone.”1 Shippers, freight forwarders, ports, terminals, ocean carriers, intermodal operators, government authorities, and customs brokers are the intended users of the electronic platform. Continue reading “All Aboard! Major Shipping Lines Secure Antitrust Immunity for TradeLens Blockchain Agreement”