PART 221-DOCUMENTATION, TRANSFER OR CHARTER OF VESSELS

Sec.

221.4 Approval of certain transactions covered by section 37, Shipping Act, 1916, as amended.

221.7 Approval of vessel charters to noncitizens.

221.8 Approval of vessel sale to noncitizens; transfer to foreign registry. 221.11 Citizenship declarations by vendees, mortgagees or other transferees of U.S. vessels or vessel interests. 221.13 Uniform Bareboat Charter of a Government-owned dry-cargo vessel under section 705 of the Merchant Marine Act, 1936, as amended, "Form No. 705".

221.14 Charges for processing certain applications.

221.16 Fee for processing applications to transfer vessels, subject to mortgage outstanding in favor of the United States of America.

§ 221.4 Approval of certain transactions covered by section 37, Shipping Act, 1916, as amended.

(a) The Department of Transportation, Maritime Administration, hereby grants approval under section 37 of the Shipping Act, 1916, as amended (40 Stat. 901, 46 U.S.C. 835) to the following transactions:

(1) The sale, mortgage, lease, charter, delivery, or transfer, or agreement for the sale, mortgage, lease, charter, delivery, or transfer, to any person not a citizen of the United States of a vessel having an overall length of 65

feet or less other than a vessel that is or will be engaged in the fisheries of the United States (as described in § 221.7(a)(3)), or any interest therein, owned in whole or in part by any person a citizen of the United States, or of any state, territory, district or possession thereof, and which is not documented under the laws of the United States, or the last documentation of which was not under the laws of the United States; and the transfer to or placing under foreign registry or flag of any such vessel;

(2) The making of an agreement or the effecting of an understanding whereby there is vested in or for the benefit of any person not a citizen of the United States, the controlling interest in or the majority of the voting power in a corporation which is organized under the laws of the United States or any state, territory, district or possession thereof, and which owns a vessel described in paragraph (a) of this section;

(3) The entrance into any contract, agreement or understanding to construct within the United States a vessel of any size for or to be delivered to a person not a citizen of the United States; and the transfer to or placing under foreign registry or flag of any such vessel;

(4) The departure from any port of the United States of any vessel which was constructed in whole or in part within the United States, has not been documented under the laws of the United States, and has never been cleared for any foreign port;

(b) The approvals hereby granted shall not apply if a transferee or person with a controlling interest in the transferee is a national of the USSR, Latvia, Lithuania, Estonia, Czechoslovakia, Bulgaria, Albania, North Korea, German Democratic Republic (including East Berlin), Laos, Kampuchea, Vietnam, Outer Mongolia or Cuba, unless (1) such national has been lawfully admitted into, and resides in, the United States and (2) such national does not remove the

vessel from the territorial limits of the United States. Also, the approvals shall not apply if the vessel is to be transferred to or placed under the registry or flag of any such country. This list of countries shall be subject to change periodically to conform to the laws and foreign policy of the United States.

(c) The approvals hereby granted do not supersede the requirements of: (1) The Department of State, 22 CFR Part 121 et seq. pertaining to articles enumerated in the U.S. munitions list and (2) the Bureau of International Commerce, Office of Export Control as to any navigational apparatus requiring a validated license.

[G.O. 8, 5th Rev., 37 FR 28752, Dec. 29, 1972, as amended by G.O. 58 and 59, Rev. 2 and 5, Amdts. 1 and 3, 39 FR 10572, Mar. 21, 1974; 40 FR 2435, Jan. 13, 1975; 48 FR 35881, Aug. 8, 1983]

§ 221.7 Approval of vessel charters to noncitizens.

(a) General approvals not exceeding six months. The Maritime Administration hereby approves under sections 9 and 41 of the Shipping Act, 1916, as amended (46 U.S.C. 808 and 839), charters for a period of not more than six (6) months, to a person not a citizen of the United States, relating to any vessel which is documented under the laws of the United States, the last documentation of which was under the laws of the United States, or which is owned in whole or in part by any person who is a citizen of the United States, or by a corporation organized under the laws of the United States or of any State, Territory, District or possession thereof. The respective dates for commencement and termination of a charter set forth in its provisions shall be accepted as prima facie evidence of the dates of these events. This approval does not apply to any of the following charters:

(1) Demise or bareboat charters, including subcharters, consecutive charters, renewals or extensions of such charters (other than bareboat charters or bareboat subcharters of vessels documented recreational and to be operated personally by the charterer for recreation only).

(2) Charters for the carriage of cargoes of any kind to or from the USSR (except as provided in paragraph (e) of this section), Lativia, Lithuania, Estonia, Czechoslovakia, Bulgaria, Albania, North Korea, German Democratic Republic (including East Berlin), Laos, Kampuchea, Vietnam, Outer Mongolia or Cuba. This list of countries shall be subject to change periodically to conform to the laws and foreign policy of the United States.

(3) Charters for operation in the fisheries of the United States, which shall mean every fishery (fishing for one or more stocks of fish) in the internal or territorial waters of the United States (all States and all territories, districts and possessions, or a Commonwealth in political union with the United States), in the fishery conservation zone of the United States (up to the 200 mile limit), and on the high seas beyond the fishery conservation zone.

(b) Not later than twenty (20) days after the beginning of a charter period, the vessel owner or owner's representative shall file with the Maritime Administration a copy of any charter which is approved under paragraph (a) of this section (except a bareboat charter or bareboat subcharter of a vessel documented recreational to be operated personally by the charterer for recreation only). The Maritime Administration may grant a request for an extension of time to file such charter or other agreement. The vessel owner or bareboat charterer (or a representative) who charters a documented recreational vessel to a person not a citizen of the United States, which vessel is to be used personally by the charterer or subcharterer for recreation only, shall retain a copy of such charter for a period of one (1) year after the expiration date, and shall make it available for inspection upon request by the Maritime Administration or its designee.

(c) Charters requiring prior approval. When any charter of a vessel to a non-citizen provides that its duration shall or may be for a period in excess of six (6) months, the Maritime Administration shall consider the charter period to include any extension period, irrespective of the inclusion of a provi

sion in the agreement that either makes any charter period extension beyond six (6) months subject to the approval of the maritime Administration or permits the substitution of another vessel other than a vessel of United States registry. The vessel owner or owner's representative shall submit the charter agreement to the Maritime Administration for approval prior to the commencement date of the first six (6) month period.

(d) Charter renewals. The Maritime Administration shall construe any new charter of a vessel to a person not a citizen of the United States, executed within thirty (30) days after the date of any charter approved under this section, with the same non-citizen charterer, to be a renewal or extension of the original charter. The agency shall require submission of the new charter for prior approval before it can become effective if the cumulative period of time of the two charters exceeds six (6) months. This requirement shall apply notwithstanding a provision in the new charter permitting the substitution of another vessel other than a vessel of U.S. registry.

(e) Charters for trade with USSR. The Maritime Administration hereby approves under sections 9 and 41 of the Shipping Act, 1916, as amended (46 U.S.C. 808 and 839), charters to non-citizens of bulk cargo vessels engaged in carrying bulk raw and processed agricultural commodities from the United States to ports in the USSR, or to other permissible ports of discharge, pursuant to Part 294 of this chapter, that are operating under long-term operating-differential subsidy agreements (ODSA), subject to the requirements of Part 252 of this chapter. Approval granted under this paragraph shall extend to all charters subject to such ODSA, without requirement of filing an application and paying the application fee provided for in § 221.14 of this part.

[48 FR 35881, Aug. 8, 1983, as amended at 51 FR 9209, Mar. 18, 1986]

§ 221.8 Approval of vessel sale to noncitizens; transfer to foreign registry. (a) The Maritime Administration hereby approves under sections 9 and 41 of the Shipping Act, 1916, as

amended (46 U.S.C. 808, 839), the sale to a noncitizen, and/or the transfer to foreign registry or flag, of a vessel of under 200 gross tons that is owned by a United States citizen and is either documented or was last documented under United States laws. Pursuant to 46 U.S.C. 883, 12106, the sale to a noncitizen and/or the transfer to foreign flag or registry of a vessel terminates the right of such vessel to engage thereafter in the coastwise trade.

(b) The approvals granted in paragraph (a) of this section shall not apply if the vessel's purchaser, or a person (including a corporation or other entity) with a controlling interest in the vessel's purchaser, is a national of Iran, Libya the Union of Soviet Socialist Republics, Latvia, Lithuania, Estonia, Czechoslovakia, Bulgaria, Albania, North Korea, German Democratic Republic (including East Berlin), Laos, Kampuchea, Vietnam, Outer Mongolia, or Cuba, unless such national has been lawfully admitted into, and resides in the United States; and such national does not remove the vessel from the territorial limits of the United States. Also, the approvals shall not apply if the vessel is to be transferred to or placed under the flag of any such country. This list of countries shall be subject to change periodically to conform to the laws and foreign policy of the United States.

[51 FR 9210, Mar. 18, 1986]

§ 221.11 Citizenship declarations by vendees, mortgagees or other transferees of U.S. vessels or vessel interests.

Whenever any bill of sale, mortgage, hypothecation, or conveyance of any vessel, part thereof; or interest therein, is presented to any Officer in Charge of Marine Inspection, U.S. Coast Guard, to be recorded, the vendee, mortgagee, or transferee shall file therewith, as provided by section 40 of the Shipping Act, 1916 (46 U.S.C. 838), the following declaration.

22, 1922, naturalized, or as otherwise authorized by law.

B. Corporation. A corporation is a citizen if (a) it is incorporated under the laws of the United States or of a state, territory, district or possession thereof; (b) its president or other chief executive officer and its chairman of the board are United States citizens; (c) no more of its directors than a minority of the number necessary to constitute a quorum are non-citizens; and (d) the controlling interest in the corporation is owned by United States citizens or, if the vessel is documented for coastwise trade, at least 75 percent of the interest in the corporation is owned and controlled by U.S. citi

zens.

NOTE: (1) The controlling interest in a corporation is owned and controlled by United States citizens only if (i) title to at least a majority of the stock is vested in United States citizens free of any trust or fiduciary obligation in favor of any person who is not a United States citizen; (ii) at least the majority of the voting power is vested in United States citizens; (iii) there is no contract or understanding through which it is arranged that the majority of the voting power of said corporation may be exercised, directly or indirectly, on behalf of a person who is not a citizen of the United States;and (iv) there are no other means whatsoever by which control of the corporation is conferred upon or permitted to be exercised by any person who is not a United States citi

zen.

(2) Seventy-five percent of the interest in a corporation is owned and controlled by United States citizens only if (i) the title to at least 75 percent of the stock of said Corporation is vested in citizens of the United States free from any trust or fiduciary obligation in favor of any person not a citizen of the United States; (ii) that such proportion of the voting power of said Corporation is vested in citizens of the United States; (iii) that through no contract or understanding is it so arranged that more than 25 percent of the voting power of said Corporation may be exercised, directly or indirectly, in behalf of any person who is not a citizen of the United States; and (iv) that by no means whatsoever, is any interest in said Corporation in excess of 25 percent conferred upon or permitted to be exercised by any person who is not a citizen of the United States.

C. Partnership/Joint Venture. A partnership or a joint venture is a citizen of the United States if requisite ownership and control is vested in United States citizens pursuant to 46 U.S.C. 802.

D. Association. An association is a citizen if the requisite ownership is vested in United States citizens pursuant to 46 U.S.C. 802.

E. Mutual Savings Bank/Insurance Company. A mutual savings bank or mutual insurance company is one which has no directors, the duties of the directors being exercised by the trustees, and which is not authorized to issue stock. Such an entity is a citizen if (a) its president or other chief executive officer and the chairman of its board of trustees are United States citizens; (b) no more of the trustees than a minority of the number necessary to constitute a quorum [are non-citizens; (c) at least the majority of the voting power and control in the entity is vested in the board of trustees free from any trust or fiduciary obligation in favor of any person who is not a United States citizen; and (d) there are no other means whatsoever by which control of the corporation is conferred upon or permitted to be exercised by any person who is not a United States citizen.

F. Trustee-Mortgagee. A trustee-mortgagee is a citizen if it is approved under the provisions of 46 U.S.C. 808 and 835.

G. If you check "Other" please submit full details of the legal arrangement or character with supporting documents attached. Direct contact with the Maritime Administration at an early date is recommended.

NOTE: Questions concerning the construction and interpretation of the above criteria should be directed to the Maritime Administration.

[47 FR 38131, Aug. 30, 1982, as amended at 48 FR 27044, June 13, 1983]

Disputes.

Vessel(s) Layup.

(Secs. 9, 37, 40, 41 and 43, Shipping Act, 1916, as amended (46 U.S.C. 808, 835, 838, 839 and 941a); Pub .L. 97-31 (August 6, 1981); 49 CFR 1.66 (46 FR 47458, Sept. 28, 1981))

§ 221.13 Uniform Bareboat Charter of a Government-owned dry-cargo vessel under section 705 of the Merchant Marine Act, 1936, as amended, "Form No. 705."

(a) On July 16, 1956, the United States Department of Commerce, through the Maritime Administration, approved and authorized publication of a standard form of bareboat charter

for use in the chartering, under section 705 of the Merchant Marine Act, 1936, as amended, of Governmentowned dry-cargo vessels, which are subject to Title VII of said act. The chartering of such vessels is subject to competitive bidding procedures as prescribed under section 706 of said act.

(b) Except as otherwise authorized, the form of such charter shall be substantially as follows: