46 U.S.C. § 12119 — Owners engaged primarily in leasing or financing transactions

(a) Definitions. (1) An "affiliate" of a person is another person that controls, is controlled by, or shares common control with that person, or that is named as part of the same consolidated group in an SEC or IRS filing. (2) "Cargo" does not include cargo held for non-commercial reasons mainly to dodge the requirements of (c)(3). (3) "Oil" has the meaning given in section 2101(28). (4) A "passive investment" is one where neither the investor nor its affiliate is, or can be, involved in managing, using, or operating the investment. (5) "Qualified proprietary cargo" means, in general, oil, petroleum products, petrochemicals, or liquefied natural gas that a certifying owner (or its affiliate) beneficially owns around the time it's carried in coastwise trade on that owner's vessel — including cargo carried under a fleet-sharing arrangement with matched carriage on another owner's vessel, cargo on a towing vessel paired with a non-self-propelled tank vessel functioning as one unit, and cargo on certain large self-propelled tank vessels or liquefied natural gas carriers delivered after December 31, 1999 and bought to move Alaska-sourced LNG or unrefined petroleum to the continental US. (6) A "United States affiliate" is an affiliate whose main place of business is in the US. (b) Requirements. A vessel can get a coastwise endorsement if (1) it meets the usual coastwise requirements except the normal ownership rule; (2) its owner — or, if owned through a trust, the trust's beneficiary — meets the (c) certification rules; (3) it is under a bareboat charter to someone who certifies to the Secretary they are a US citizen under section 50501 for coastwise trade purposes; and (4) that charter runs at least 3 years, or a shorter period the Secretary allows. (c) Ownership certification. (1) A person meets this subsection by sending the Secretary, every year, the certification described in (2) or (3). (2) Under the investment certification, the person certifies it is a leasing company, bank, or financial institution; owns or holds the vessel's beneficial interest purely as a passive investment; does not operate any vessel for hire and isn't affiliated with anyone who does; and is independent of any charterer or anyone else who can control or direct the vessel's movement or use. (3) Under the certain-tank-vessels certification, the person certifies that the book value of vessels it and its US affiliates own is no more than 10 percent of their total assets; no more than 10 percent of their revenue comes from owning, operating, or managing vessels; at least 70 percent of the cargo tonnage carried on their coastwise-endorsed vessels is qualified proprietary cargo; any other cargo those vessels carry is oil, petroleum products, petrochemicals, or liquefied natural gas; none of those vessels carries molten sulfur; and the person already owned a vessel documented under this section as of August 9, 2004. This certification only applies to a tank vessel of at least 6,000 gross tons, or a towing vessel paired with such a tank vessel functioning as one unit. (d) Filing of demise charter. The charter and any amendments must be filed along with the (b)(3) certification, or within 10 days of amending it, and the charter and amendments must be made public. (e) Continuation of endorsement after termination of charter. If a (b)(3) charter ends because the charterer defaulted, the Secretary may keep the coastwise endorsement going for up to 6 months, on terms the Secretary sets. (f) Deemed owned by citizens. A vessel that satisfies this section is treated as fully owned by US citizens under sections 12103 and 50501.