[Federal Register Volume 66, Number 179 (Friday, September 14, 2001)]
[Notices]
[Pages 47931-47932]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23071]


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DEPARTMENT OF TRANSPORTATION

Maritime Administration

[Docket No. MARAD-2001-10612]


Westward I, Viking, Chelsea K, Alaskan Command and Seafisher--
Applicability of Preferred Mortgage, Ownership and Control Requirements 
for Fishing Industry Vessels of 100 Feet or Greater in Registered 
Length

AGENCY: Maritime Administration, Department of Transportation.

ACTION: Invitation for public comments on two petitions requesting 
MARAD to issue determinations that the ownership and control 
requirements and the preferred mortgage requirements of the American 
Fisheries Act of 1998 and 46 CFR Part 356 are in conflict with an 
international investment agreement.

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SUMMARY: The Maritime Administration (``MARAD'') is soliciting public 
comments on a petition from the owners and mortgagees of the vessels 
Westward I (Official Number--615165), Viking (Official Number--565017), 
Chelsea K (Official Number--976753), and Alaskan Command (Official 
Number--599383) and a petition from the owners of the vessel Seafisher 
(Official Number--575587) (hereinafter the ``Vessels''). The petitions 
request that MARAD issue decisions that the American Fisheries Act of 
1998 (``AFA''), Division C, Title II, Subtitle I, Pub. L. 105-277, and 
our regulations at 46 CFR part 356 (65 FR 44860 (July 19, 2000)) are in 
conflict with the U.S.-Japan Treaty and Protocol Regarding Friendship, 
Commerce and Navigation, 206 UNTS 143, TIAS 2863, 4 UST 2063 (1953) 
(``U.S.-Japan FCN'' or ``Treaty''). The petitions are submitted 
pursuant to 46 CFR 356.53 and section 213(g) of AFA, which provide that 
the requirements of the AFA and the implementing regulations will not 
apply to the owners or mortgagees of a U.S.-flag vessel documented with 
a fishery endorsement to the extent that the provisions of the AFA 
conflict with an existing international agreement relating to foreign 
investment to which the United States is a party.
    If MARAD determines that the AFA and MARAD's implementing 
regulations conflict with the U.S.-Japan FCN, the requirements of 46 
CFR part 356 and the AFA will not apply to the extent of the 
inconsistency with respect to each specific vessel. Accordingly, 
interested parties are invited to submit their views on the petitions 
and whether there is a conflict between the U.S.-Japan FCN and the 
requirements of both the AFA and 46 CFR part 356. In addition to 
receiving the views of interested parties, MARAD will consult with 
other Departments and Agencies within the Federal Government that have 
responsibility or expertise related to the interpretation of or 
application of international investment agreements.

DATES: You should submit your comments in order to ensure that Docket 
Management receives them not later than September 24, 2001. Prior to 
the two petitions that are the subject of this notice, we published 
seven different notices relating to potential conflicts between the AFA 
and the Japan-FCN. No comments from the public were received in 
response to any of the petitions. Because we have not received any 
public comments in regard to previous notices and because the present 
petitions do not present novel issues, we are using a shortened comment 
period of ten days for this notice.

ADDRESSES: Comments should refer to the docket number that appears at 
the top of this document. Written comments may be submitted by mail to 
the Docket Clerk, U.S. DOT Dockets, Room PL-401, Department of 
Transportation, 400 7th St., SW., Washington, DC 20590-0001. You may 
also send comments electronically via the Internet at http://dms.dot.gov/submit/. All comments will become part of this docket and 
will be available for inspection and copying at the above address 
between 10 a.m. and 5 p.m., E.T., Monday through Friday, except Federal 
Holidays. An electronic version of this document and all documents 
entered into this docket may be obtained over the internet from the 
Docket Management System at http://dms.dot.gov by typing in the last 
four digits of the docket number provided at the beginning of this 
notice.

FOR FURTHER INFORMATION CONTACT: John T. Marquez, Jr. of the Office of 
Chief Counsel at (202) 366-5320. You may send mail to John T. Marquez, 
Jr., Maritime Administration, Office of Chief Counsel, Room 7228, MAR-
222, 400 Seventh St., SW., Washington, DC 20590-0001 or you may send e-
mail to [email protected].

SUPPLEMENTARY INFORMATION: The AFA was enacted in 1998 to give U.S. 
interests a priority in the harvest of U.S.-fishery resources by 
increasing the requirements for U.S. Citizen ownership, control and 
financing of U.S.-flag vessels documented with a fishery endorsement. 
MARAD was charged with promulgating implementing regulations for 
fishing industry vessels of 100 feet or greater in registered length 
while the Coast Guard retains responsibility for vessels under 100 
feet.
    Section 202 of the AFA, raises, with some exceptions, the U.S.-
Citizen ownership and control standards for U.S.-flag vessels that are 
documented with a fishery endorsement and operating in U.S.-waters. The 
ownership and control standard was increased from the controlling 
interest standard (greater than 50%) of section 2(b) of Shipping Act, 
1916 (``1916 Act''), as amended, 46 App. U.S.C. 802(b), to the standard 
contained in section 2(c) of the 1916 Act, 46 App. U.S.C. 802(c), which 
requires that 75 percent of the ownership and control in a vessel 
owning entity be vested in U.S. Citizens. In addition, section 204 of 
the AFA repeals the ownership grandfather ``savings provision'' in the 
Anti-Reflagging Act of 1987, Pub. L. 100-239, section 7(b), 101 Stat 
1778 (1988), which permits foreign control of companies owning certain 
fishing vessels.
    Section 202 of the AFA also amended 46 App. U.S.C. 31322(a) and 
established new requirements to hold a preferred mortgage on a vessel 
of 100 feet or greater in registered length that is documented with a 
fishery endorsement. However, those requirements were subsequently 
amended on July 24, 2001, by section 2202 of the Supplemental 
Appropriations Act, 2001, Public Law

[[Page 47932]]

107-20. The amendments revise the requirements to hold a preferred 
mortgage on fishing industry vessels of 100 feet or greater, delay the 
effective date of 46 U.S.C. 31322(a)(4), as amended, to April 1, 2003, 
and require MARAD to suspend until April 1, 2003, any consideration of 
a lender's citizenship status in determining whether 75% of the 
interest in a vessel is owned and controlled by U.S. Citizens.
    Section 213(g) of the AFA provides that if the new ownership and 
control provisions or the mortgagee provisions are determined to be 
inconsistent with an existing international agreement relating to 
foreign investment to which the United States is a party, such 
provisions of the AFA shall not apply to the owner or mortgagee on 
October 1, 2001, with respect to the particular vessel and to the 
extent of the inconsistency. MARAD's regulations at 46 CFR 356.53 set 
forth a process wherein owners or mortgagees may petition MARAD, with 
respect to a specific vessel, for a determination that the implementing 
regulations are in conflict with an international investment agreement. 
Petitions must be noticed in the Federal Register with a request for 
comments. The Chief Counsel of MARAD, in consultation with other 
Departments and Agencies within the Federal Government that have 
responsibility or expertise related to the interpretation of or 
application of international investment agreements, will review the 
petitions and render a decision within 120 days of the receipt of a 
fully completed petition.
    Interested parties are advised that, in light of the above 
mentioned amendments to the preferred mortgage requirements for fishing 
industry vessels of 100 feet or greater, we will be required to amend 
our regulations. Furthermore, Congress has explicitly stated that MARAD 
should not consider the citizenship of the lender in determining 
whether a vessel is eligible for documentation with a fishery 
endorsement until the new requirements related to mortgagees become 
effective on April 1, 2003. Consequently, we will not issue a 
determination at this time with respect to the mortgagee issues 
addressed in the petitions. The preferred mortgages on the Vessels will 
remain valid and subject to the current requirements of 46 U.S.C. 
31322, as in effect prior to the passage of the AFA, until the new 
statutory and regulatory requirements related to preferred mortgages 
become effective on April 1, 2003.

The Petitioners

    The petitioners with respect to the vessels Westward I, Viking, 
Chelsea K, and Alaskan Command are: (1) The owners of the vessels, 
Maruha Corporation, Maruha's three wholly owned subsidiaries, Western 
Alaska Fisheries, Inc., Westward Seafoods, Inc., and Maruha Capital 
Investment, Inc., as well as Horizon Trawlers, Inc., H&G, LLC, Pyramid 
Fishing Company, Westward Limited Partnership, Viking Limited 
Partnership, Ocean Dynasty Limited Partnership, and Alaskan Command 
Company; and (2) the mortgagees with respect to the vessels, Westward 
Limited Partnership and Overseas Fishery Cooperation Foundation.
    The petitioners with respect to the Seafisher are the owners of the 
vessel, M/V Savage, Inc., Cascade Fishing, Inc., and Daito Suisan, Ltd.

Requested Action

    The owners and mortgagees of Westward I, Viking, Chelsea K, and 
Alaskan Command have requested a consolidated filing for the vessels. 
MARAD's regulations require at 46 CFR 356.53(c) that a separate 
petition be filed for each vessel for which the owner or mortgagee is 
requesting an exemption unless the Chief Counsel authorizes a 
consolidated filing. The Chief Counsel hereby authorizes the 
consolidated filing by Petitioners relating to the four vessels. The 
owners of the Seafisher have filed a separate petition.
    The Petitioners seek a determination from MARAD under section 
213(g) of the AFA and 46 CFR 356.53 that they are exempt from the 
requirements of sections 202, 203 and 204 of the AFA and 46 CFR part 
356 on the ground that the requirements of the AFA and 46 CFR part 356, 
as applied to Petitioners with respect to the Vessels, conflict with 
U.S. obligations under U.S.-Japan FCN. The Petitioners request a 
determination that the restrictions placed on foreign ownership, 
foreign financing and foreign control of U.S.-flag vessels documented 
with a fishery endorsement contained in 46 CFR part 356 and sections 
202, 203 and 204 of the AFA do not apply to Petitioners.

Petitioner's Description of the Conflict Between the FCN Treaty and 
Both 46 CFR Part 356 and the AFA

    MARAD's regulations at 46 CFR 356.53(b)(3) require Petitioners to 
submit a detailed description of how the provisions of the 
international investment agreement or treaty and the implementing 
regulations are in conflict. The entire text of the FCN Treaty is 
available on MARAD's internet site at http://www.marad.dot.gov. The 
descriptions submitted by the Petitioners of the conflict between the 
FCN Treaty and both the AFA and MARAD's implementing regulations form 
the basis on which the Petitioners' requests that the Chief Counsel 
issue rulings that 46 CFR part 356 does not apply to the Petitioners 
with respect to the Vessels. The Petitioners' descriptions of how the 
provisions of the U.S.-Japan FCN are in conflict with both the AFA and 
46 CFR part 356 may be obtained by contacting John T. Marquez, Jr. at 
the numbers and address provided above under FOR FURTHER INFORMATION or 
from the Docket Management System by following the instructions above 
under ADDRESSES.

    Dated: September 10, 2001.

    By Order of the Acting Deputy Maritime Administrator.
Joel Richard,
Secretary, Maritime Administration.
[FR Doc. 01-23071 Filed 9-13-01; 8:45 am]
BILLING CODE 4910-81-P