FMC Launches Investigation of the Impact of Canadian Regulations on U.S.-Flag Carriers

The Federal Maritime Commission launched an investigation today to determine if pending Canadian regulations governing ballast water management systems of ships in the U.S.-Canada Great Lakes trade have a disparate effect on U.S. flagged vessels and constitute a Foreign Shipping Practices violation under 46 U.S.C. Chapter 423.

U.S.-based companies operating ships in the U.S.-Canada Great Lakes trade maintain that Canadian regulations taking effect as to some vessels in September 2024 impose a severe burden on their operations and put American companies and vessels at a disadvantage relative to their Canadian competitors.

The Commission is authorized by Title 46, Chapter 423 of the U.S. Code to investigate whether the laws, rules, regulations, policies or practices of another nation result in conditions that adversely affect the operations of United States carriers in the United States oceanborne trade.

The Commission has determined that sufficient facts exist related to the Canadian ballast water regulations to warrant initiating a Foreign Shipping Practices investigation.  The investigation will be led by the Commission’s General Counsel, who will prepare and present a report to the Commission containing his findings and recommendations for Commission action within 120 days, unless an extension is approved.

Interested members of the public are invited to comment on the matters that have triggered this investigation.  Comments should be submitted via the Federal eRulemaking Portal by June 21, 2024.

There are significant potential consequences for Canadian-flagged vessels calling at U.S. ports if the Commission determines there has been a violation of the Foreign Shipping Practices provisions.  Options for offsetting sanctions include limiting Canadian-flagged vessels from calling at U.S. ports and assessing significant fees on Canadian-flagged vessels.

Today’s announcement continues an ongoing examination by the Commission of Canadian government policies and regulations impacting U.S. flagged Great Lakes operators.  A petition filed by the Lake Carriers’ Association (Petition P1-20), a trade association representing U.S. flagged operators in the Great Lakes, originally directed the Commission’s attention to this matter in March 2020.  Subsequently, the Commission initiated an Investigation of Regulations Affecting Shipping in Foreign Trade using its authority under 46 U.S.C. Chapter 421.