Government Delays Change to Ruling on Foreign-Flagged Ships

August 15, 2008

The White House Office of Management and Budget (OMB) has "returned for reconsideration" an amendment to the Passenger Vessel Services Act that would impact foreign-flagged ships sailing to U.S. ports, specifically Hawaii. The amendment was submitted by the U.S. Department of Customs and Border Protection (CBP) and supported by Norwegian Cruise Line.

You may remember that under the originally proposed amendment, foreign-flagged ships would need to spend at least 48 hours in a foreign port in order to call on U.S. ports. Because the amendment was worded in such a way that would affect Alaska and Canada and New England cruises as well as the Hawaii cruises it was aiming to protect, it was the source of much controversy -- and was later changed to apply only to U.S. ports with regular service from a major U.S.-flagged cruise ship. Only Hawaii meets this requirement, exempting other cruise regions from potential regulatory changes.

However, on August 13, the OMB chose to return the proposal to the Department of Homeland Security and CBP. According to a report by the Associated Press, the stated reason for the return was the failure to demonstrate a real need for the changes; due to this delay, the proposed amendment cannot be implemented until the start of a new presidential administration.

According to an official statement from NCL, the line "is disappointed by this additional delay in implementing regulations on this important issue, but hopes CBP will address the procedural concerns identified by OMB and will re-submit the compromise rule."

We'll keep you posted.

--by Erica Silverstein, Associate Editor