46 U.S.C. § 56102 — Additional controls during war or national emergency

submitted 20 years ago by Pub. L. 109-304 to r/title-46-SHIPPING · 790 words · no verdicts yet

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During a war or a declared national emergency, this law adds extra rules limiting the sale, transfer, or foreign registration of U.S. vessels, shipbuilding facilities, and related interests, without the Secretary of Transportation's approval. It also sets criminal penalties and forfeiture for violations, and rules for approving trustees who hold mortgage-related instruments.

(a) In General. During a war, or a national emergency declared by the President, a person may not — without the Secretary of Transportation's approval — do any of these things: (1) place under foreign registry a vessel owned in whole or part by a U.S. citizen or U.S.-incorporated company; (2) sell, mortgage, lease, charter, deliver, or otherwise transfer, or agree to transfer, to a non-citizen: (A) such a vessel or an interest in it; (B) a U.S.-documented vessel or an interest in it; or (C) a shipbuilding or ship-repair facility or an interest in it; (3) issue, assign, or transfer to a non-citizen a debt instrument secured by a mortgage on a vessel, an assignment of an owner's interest in a vessel under construction, or a mortgage on a shipbuilding facility, unless the trustee holding it is approved under subsection (b); (4) agree to build a vessel in the United States for, or to deliver to, a non-citizen, without clearly stating that construction won't start until the war or emergency ends; (5) agree to give a non-citizen a controlling interest in a U.S. corporation that owns a vessel or a shipbuilding facility; or (6) cause a vessel built partly or wholly in the U.S., and never cleared for a foreign port, to leave a U.S. port before it is U.S.-documented. (b) Trustees. (1) The Secretary must approve a trustee under subsection (a)(3) only if it is a bank or trust company that is a U.S. or state-incorporated corporation, legally allowed to act as a corporate trustee, a U.S. citizen, supervised by federal or state authorities, and has at least $3,000,000 in combined capital and surplus. (2) If a trustee stops meeting these conditions, the Secretary must withdraw approval, after which the usual transfer restrictions apply again. (3) Even an approved trustee cannot operate the mortgaged vessel without the Secretary's separate approval while subsection (a) is in effect. (c) Status of Prohibited Transaction. Any transaction that violates this section is legally void. (d) Recovery of Consideration. (1) Someone who paid money in a deal that violated this section can get that money back, once the vessel, facility, stock, or other security involved is either returned to its rightful owner or forfeited to the government. (2) This right to get money back does not apply if the person receiving the payment reasonably believed the payer was a U.S. citizen. (e) Penalties. (1) Criminal penalty: violating, attempting, or conspiring to violate this section can bring a fine, up to 5 years in prison, or both. (2) Forfeiture: the government can permanently take (A) any vessel, shipbuilding facility, or interest in one that was sold, mortgaged, transferred, or documented in violation of this section; (B) any stock or securities sold or transferred in violation; and (C) any vessel that departed in violation of subsection (a)(6).

the actual law source: uscode.house.gov ↗public domain

(a)In General.—

During war, or a national emergency declared by Presidential proclamation, a person may not, without the approval of the Secretary of Transportation—

(1)

place under foreign registry a vessel owned in whole or in part by a citizen of the United States or a corporation incorporated under the laws of the United States or of a State;

(2)

sell, mortgage, lease, charter, deliver, or in any other manner transfer, or agree to sell, mortgage, lease, charter, deliver, or in any other manner transfer, to a person not a citizen of the United States—

(A)

a vessel owned as described in paragraph (1), or an interest therein;

(B)

a vessel documented under the laws of the United States, or an interest therein; or

(C)

a facility for building or repairing vessels, or an interest therein;

(3)

issue, assign, or transfer to a person not a citizen of the United States an instrument of indebtedness secured by a mortgage of a vessel to a trustee, by an assignment of an owner’s interest in a vessel under construction to a trustee, or by a mortgage of a facility for building or repairing vessels to a trustee, unless the trustee or a substitute trustee is approved by the Secretary under subsection (b);

(4)

enter into an agreement or understanding to construct a vessel in the United States for, or to be delivered to, a person not a citizen of the United States without expressly stipulating that construction will not begin until after the war or national emergency has ended;

(5)

enter into an agreement or understanding whereby there is vested in, or for the benefit of, a person not a citizen of the United States the controlling interest in a corporation that is incorporated under the laws of the United States or a State and that owns a vessel or facility for building or repairing vessels; or

(6)

cause or procure a vessel, constructed in whole or in part in the United States and never cleared for a foreign port, to depart from a port of the United States before it has been documented under the laws of the United States.

(b)Trustees.—

(1)Approval.—

The Secretary shall approve a trustee or substitute trustee under subsection (a)(3) if and only if the trustee is a bank or trust company that—

(A)

is organized as a corporation, and is doing business, under the laws of the United States or a State;

(B)

is authorized under those laws to exercise corporate trust powers;

(C)

is a citizen of the United States;

(D)

is subject to supervision or examination by Federal or State authority; and

(E)

has a combined capital and surplus (as set forth in its most recent published report of condition) of at least $3,000,000.

(2)Disapproval.—

If a trustee or substitute trustee ceases to meet the conditions in paragraph (1), the Secretary shall disapprove the trustee or substitute trustee. After the disapproval, the restrictions on transfer or assignment without the Secretary’s approval in subsection (a)(3) apply.

(3)Operation of vessel.—

During a period when subsection (a) applies, a trustee referred to in subsection (a)(3), even though approved as a trustee by the Secretary, may not operate the vessel under the mortgage or assignment without the Secretary’s approval.

(c)Status of Prohibited Transaction.—

A transaction in violation of this section is void.

(d)Recovery of Consideration.—

(1)In general.—

A person that deposited or paid consideration in connection with a transaction prohibited by this section may recover the consideration after tender of the vessel, facility, stock, or other security, or interest therein, to the person entitled to it, or the forfeiture thereof to the United States Government.

(2)Exception.—

Paragraph (1) does not apply if the person in whose interest the consideration was deposited, or to whom it was paid, entered into the transaction in the belief that the person depositing or paying the consideration was a citizen of the United States.

(e)Penalties.—

(1)Criminal penalty.—

A person that violates, or attempts or conspires to violate, this section shall be fined under title 18, imprisoned for not more than 5 years, or both.

(2)Forfeiture.—

The following shall be forfeited to the Government:

(A)

A vessel, a facility for building or repairing vessels, or an interest in a vessel or such a facility, that is sold, mortgaged, leased, chartered, delivered, transferred, or documented, or agreed to be sold, mortgaged, leased, chartered, delivered, transferred, or documented, in violation of this section.

(B)

Stock and other securities sold or transferred, or agreed to be sold or transferred, in violation of this section.

(C)

A vessel departing in violation of subsection (a)(6).

Source credit: (Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1652.)

history & why it existsrecord from the source credit

2006Enacted · Pub. L. 109-304 · 120 Stat. 1652

A history note hasn’t been published yet. The record shows enactment by Pub. L. 109-304 on 2006-10-06.

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