it is organized under the laws of the United States or of a State, Territory, District, or possession thereof; (2) its president or other chief executive officer, and the chairman of its board of directors are citizens of the United States, and no more of its directors than a minority of the number necessary to constitute a quorum are noncitizens (except that in the case of corporations under title VI, Merchant Marine Act, 1936, as amended, all directors must be citizens of the United States) and (3) the controlling interest therein is owned by citizens of the United States or, in the case of a corporation operating any vessel in the coastwise trade, on the Great Lakes, or inland lakes of the United States, 75 per centum of the interest in such corporation is owned by citizens of the United States.

(b) As used in this regulation, the term “primary corporation" includes, but not exclusively, an applicant, for, or one already receiving, benefits under the Merchant Marine Act, 1936, as amended, as well as participants in certain transactions, such as banking institutions designated as lenders, mortgagees, and trustees pursuant to Pub. L. 89-346 (73 Stat. 597).

(c) To satisfy the statutory requirements, an Affidavit of U.S. Citizenship of a primary corporation by one of its officers duly authorized to execute such Affidavit, should be submitted. This affidavit should contain facts from which the corporation's citizenship can be determined.

§ 355.2 Requirements regarding evidence of U.S. citizenship; affidavit guide. (a) In order to establish that a corporation is a citizen of the United States within the meaning of section 2, Shipping Act, 1916, as amended, the form of affidavit to be used as a guide is hereby prescribed for execution in behalf of the primary corporation and filing with an application or, if required, subsequent filing within 30 days after the annual meeting of the stockholders (if the primary corporation is a wholly owned subsidiary and contrary to the bylaw provision does not hold the annual meeting of stockholders, the subsequent filing should be annually and related to the date of

ration"),

with

at

offices ——, (Business address) in evidence of which incorporation a certified copy of the Articles or Certificate of Incorporation (or Association) is filed herewith (or has been filed) together with a certified copy of the corporate Bylaws. [Evidence of continuing U.S. citizenship status, including amendments to said Articles or Certificate and Bylaws, should be filed within 30 days after the annual meeting of the stockholders or annually, within 30 days after the original affidavit if there has been no meeting of the stockholders prior to that time.];

2. That I am authorized by and in behalf of the Corporation to execute and deliver this Affidavit of U.S. Citizenship;

3. That the names of the President or other Chief Executive Officer, Vice Presidents or other individuals who are authorized to act in the absence or disability of the President or other Chief Executive Officer, the Chairman of the Board of Directors, and the Directors of the Corporation are as follows:

22, 1922, or as otherwise authorized by law, except (give name and nationality of alien directors, if any); however, the Bylaws of the Corporation provide that (Number) of the directors are necessary to constitute a quorum; therefore, the alien directors named represent no more than a minority of the number necessary to constitute a quorum. [In the case of corporations under title VI, Merchant Marine Act, 1936, as amended, all directors must be citizens of the United States. Further, obtaining evidence necessary to support this Affidavit of U.S. Citizenship is the responsibility of the affiant.];

4. Information as to stock, where Corporation has 30 or more stockholders: 1

That I have access to the stock books and records of the Corporation; that said stock books and records have been examined and disclose (a) that, as of (Date) the Corporation had issued and outstanding (Number)

shares of (Class or series) the only class or series of stock of the Corporation issued and outstanding [if such is the case], owned of record by

(Number) stockholders, said number of stockholders representing the ownership of the entire issued and outstanding stock of the Corporation, and (b) that no stockholder owned of record as of said date five per centum (5%) or more of the issued and outstanding stock of the Corporation of any class or series. [If different classes or series of stock exist, give the same data for each class or series issued and outstanding, showing the monetary value and voting rights per share in each class or series. If there is an exception to the statement in clause (b), the name, address, and citizenship of the stockholder and the amount and class or series of stock owned should be stated.] That the registered addresses of owners of record of

issued and outstanding

shares of the

centum (%) of the total number of shares of said stock (each class or series). [The exact figure as disclosed by the stock books of the corporation must be given and the per centum figure must not be less than 65 per centum, except that for a corporation operating a vessel in the coastwise trade, the per centum figure must be not less than 95 per centum. These per centum figures apply to corporate stockholders as well as to the primary corporation.]

(The same statement should be made with reference to each class or series of stock, if there is more than one class or series.)

'Strike inapplicable paragraph 4.

and that each of said individual stockholders is a citizen of the United States by virtue of birth in the United States, birth abroad of U.S. citizen parents, by naturalization during minority through the naturalization of a parent, by marriage (if a woman) to a U.S. citizen prior to September 22, 1922, or as otherwise authorized by law.

NOTE: If a corporate stockholder, give information with respect to State of incorporation, the names of the officers, directors, and stockholders in the appropriate percentage of shares held, with statement that they are all U.S. citizens. Nominee holders of record of 5 percent or more of any class or series of stock and the beneficial owners thereof should be named and their U.S. citizenship affirmed.

5. That the controlling interest (or 75% of the interest) 3 in (each) said Corporation, as established by the data hereinbefore set forth, is owned by citizens of the United States; that the title to a majority (or 75%)3 of the stock of (each) 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; that such proportion of the voting power of (each) said Corporation is vested in citizens of the United States; that through no contract or understanding is it so arranged that the majority (or more than 25%) of the voting power of (each) said Corporation may be exercised, directly or indirectly, in behalf of any person who is not a citizen of the United States; and that by no means whatsoever, is control of (each) said Corporation (or any interest in said

275% if Corporation is operating in the coastwise trade, on the Great Lakes, or on bays, sounds, rivers, harbors, or inland lakes of the United States; and controlling interest if Corporation is operating solely in the foreign trade, both terms as defined in section 2, Shipping Act, 1916, as amended. 'Strike inappropriate language.

§ 355.3 Criteria to be applied in support of stock data in affidavit.

(a) The same criteria should be observed in obtaining information to be furnished for stockholders named (direct ownership of required percentage of shares of stock of each class or series) in the Affidavit as those observed for the primary corporation. If, on the other hand, the "fair inference rule" is applied with respect to stock ownership (see Collier Advertising Service, Inc. v. Hudson River Day Line, 14 Fed. Supp. 335), the extent of U.S. citizen ownership of stock should be ascertained in the requisite percentage (65 percent for foreign operation and 95 percent for coastwise operation) in order that the veracity of the statutory statements made in the Affidavit (paragraph 5) may be relied upon by the Maritime Administration.

or

(b) When applying the fair inference rule (where there are more than 30 stockholders, except where one more of such number actually owns the controlling or 75 percent interest) in order to prove U.S. citizen ownership in the required percentages (1)

for foreign operation, 65 percent of the shares of stock of each class or series must be shown to be held by persons with registered addresses within the United States to prove that 51 percent or controlling interest is vested in citizens of the United States and (2) for coastwise operation, 95 percent of the shares of stock of each class or series must be shown to be held by persons having registered addresses within the United States to prove that 75 percent of the interest in the corporation is vested in citizens of the United States.

(c) If the primary corporation is consecutively owned by several "parent" corporations (holders of 100 percent of the stock of each or all classes or series of stock issued and outstanding), the facts should be given in proper sequence either by chart or in narrative form, revealing the facts of stock ownership. The information with respect to the ultimate parent should include data relative to the basis upon which controlling or 75 percent (depending upon whether the primary corporation operates in the domestic or foreign commerce) is established, together with the names of the owners of record or beneficial owners of 5 percent or more of each class or series of stock, if more than one class or series, and statement that such owners are citizens of the United States. In any case where different classes or series of stock exist, each class or series shall be treated depending upon whether "closely held" or "publicly held," individually in applying the fair inference rule, if applicable, or giving the relevant information with respect to United States citizens owning of

record 51 percent or 75 percent of the interest.

§ 355.4 Changes in citizenship data.

It shall be incumbent upon the parties filing affidavits under this part to apprise the Maritime Administration promptly in writing relative to changes in data last furnished with respect to officers, directors, and stockholders holding 5 percent or more of the issued and outstanding stock of each class or series, together with

73-166 0-86--18

time by a manufacturer or other

source;

(2) The transferee shall agree to stand all costs incurred in connection with the transfer;

(3) The transferee shall agree to take possession and custody of the equipment at a time and place designated by the Maritime Administration, and there shall be no liability on the part of the Maritime Administration for any failure of the equipment thereafter; and

(4) The equipment transferred shall be replaced by the transferee, at his expense, at the earliest practicable date and at a point designated by the Maritime Administration, with new equipment of the same type and design or with equipment determined by the Maritime Administration to be suitable for the same use as the equipment transferred, in a condition satisfactory to the Maritime Administration and in compliance with American Bureau of Shipping and U.S. Coast Guard standards.

(b) Transfers which meet the above requirements may be made (1) to operators of U.S.-flag merchant ships and shipyards for the construction or repair of U.S.-flag merchant ships, and (2) to foreign-flag merchant ships and U.S. shipyards for the construction or repair of foreign-flag merchant ships, when it is determined by the Maritime Administration, in consultation with other Government agencies, as appropriate, that the transfer would be beneficial to the American merchant marine, the defense effort, or otherwise in the national interest.

(c) The transferee shall furnish a deposit to the Maritime Administration in the amount of the current acquisition value (new) of the equipment, as determined by the Maritime Administration, plus 10 percent of such amount to cover expenses which may be incurred by the Maritime Administration in connection with the transaction, including possible damages to Maritime Administration properties, and, where applicable, an additional amount equal to the estimated cost of closing any openings or reassembling any machinery made necessary by the transfer. This deposit, less the amount of any expenses or damages incurred

(a) Requests for the transfer of marine equipment shall be submitted, in writing, to the Chief, Division of Reserve Fleet, Maritime Administration, Washington, DC 20590, or to the appropriate Region Director in the field, and shall include the following information:

(1) Name and address of organization requesting the transfer;

(2) Description of the equipment required;

(3) Time and method of replacement of equipment;

(4) Name, type, and flag of ship involved, port at which installation is to be made, and trade route and type of trade in which ship is engaged; and

(5) A detailed explanation of the need, establishing that an emergency exists and that the equipment cannot be obtained elsewhere in time for the ship to sail on schedule or to continue a voyage.

(b) Upon determination by the Maritime Administration that the justification for the transfer meets the policy requirements of § 360.3 and that the equipment is available for transfer, the authorized transfer official shall obtain from the applicant, in writing, an agreement to the conditions of the transfer, including the conditions set forth in § 360.3 and such other conditions as may be appropriate, including the foregoing definition of the term "transfer."

(c) The transferee shall transmit to the Maritime Administration, Washington, D.C., or the appropriate Region Director a certified or cashier's check payable to "Maritime Adm.Transportation" in the amount of the required deposit and the service

charge, as determined under § 360.3 (c) and (d).

(d) Upon approval of the transfer, the Chief, Division of Supply Management or appropriate Region Director shall authorize the issuance of appropriate shipping and other necessary instructions for the transfer of the equipment to the ship operator or shipyard.

(e) Upon determination that the equipment transferred has been satisfactorily replaced and all conditions of the transfer have been complied with, the Maritime Administration will refund to the transferee the amount of his deposit less such deductions as are determined by the Maritime Administration to be appropriate.