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April 2, 2009

OMSA wins Jones Act victory

OMSA, the Offshore Marine Service Association, has managed to counter what could have been a substantial threat to the Jones Act.

An oil major had managed to obtain a Jones Act interpretation letter from Customs and Border Protection (CBP) that said said that transportation of subsea Christmas trees from a port to an offshore wellhead was not covered by the Jones Act. The rationale was that, because the boat may be used to run ROVs and do sensitive testing as a part of the installation, the Christmas tree was somehow part of the operation of the vessel, as if it were no different from ships rigging, anchors and other equipment used on the vessel.

OMSA's leadership immediately recognized that this ruling represented an effort to undercut the use of U.S. Flag vessels in the offshore energy sector and posed an enormous threat to the Jones Act. After all, if the operations of the vessel in running ROVs or performing underwater functions became the test of the Jones Act, foreign vessels could conceivably be able to transport any cargo to subsea construction, repair or even removal projects.

Clearly that is not what Congress intended under the Jones Act. OMSA wrote CBP pointing this out and the agency responded within two day, agreeing with OMSA, and rescinding the letter


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