(e) a foreign surety bond or guarantee of a foreign bank, if endorsed by a United States corporate surety company or a United States bank which would be responsible to the Maritime Administration.

If the foreign contractor is owned or controlled by U.S. citizens, the foreign contractor and its principal U.S. citizen owners shall agree in form satisfactory to the General Counsel, Maritime Administration, to pay an amount ranging from $25,000 to $250,000, such agreement to be secured by the written guarantee of said parties, or other form of guarantee, as may be required by the Maritime Administration.

B. The sale of U.S. privately-owned vessels of 3,000 gross tons and over to foreign buyers for scrapping abroad.

(1) Ownership. The vessel or any interest therein shall not be sold without the prior written approval of the Maritime Administration.

(2) Time within which to be scrapped. Within a period of 18 months from the date of approval of the sale, the hull of said vessel shall be completely scrapped, dismantled, dismembered, or destroyed in such manner and to such extent as to prevent the further use thereof, or any part thereof, as a ship, barge, steamship, or any other means of transportation.

(3) Distribution of scrap material. The scrap resulting from the demolition of the hull of the vessel, the engines, machinery, and major items of equipment shall not be sold to, or utilized by, any noncitizen of the United States residing in the Soviet Union, Latvia, Lithuania, Estonia, Poland, Czechoslovakia, Hungary, Rumania, Bulgaria, Albania, North Korea, the Soviet Zone of Germany, Manchuria, Communist China, the Communist-controlled area of Vietnam, or Cuba. Such scrap shall not be exported to these countries. In addition, the engines, machinery and major items of equipment shall not be exported to destinations within the United States.

(4) Default.

In the event of default under any or all of (1), (2), and (3) above, the contractor shall pay to the Maritime Administration, Department of Commerce, without prejudice to any other rights which the United States may have, as liquidated damages and not as a penalty, the sum of not less than $25,000, depending upon the size, type and condition of the vessel. This payment shall be secured by a surety company bond or other guarantee satisfactory to the Maritime Administration. "Other guarantee" may be one of those set out in section A(4) of this statement of policy.

(5) Evidence of scrapping and destination of scrap materials. There shall be filed with the Maritime Administration a certificate or other evidence satisfactory to its General Counsel, duly attested and authenticated by a United States Consul that the scrapping of the vessel (hull only) and disposal or utilization of the resultant scrap, the engines, machinery and major items of equipment have

been accomplished in the manner prescribed by this section.

C. Resident agent in the United States to accept service of process for foreign transferee.

All foreign transferees, whether corporate entities, associations, companies, partnerships, individuals, or joint ventures, which or who have been granted approval by the Maritime Administration pursuant to Sections 9 or 37 or both of the Shipping Act, 1916, as amended (46 U.S.C. 808 and 835), shall, prior to the issuance and delivery of the Transfer Order covering the ship or ships to be transferred, appoint and designate a resident agent in the United States to receive and accept service of process or other notice in any action or proceeding instituted by the United States of America relating to any claim arising out of the approved transaction. This appointment and designation of the resident agent shall not be terminated, revoked, amended or altered without the prior written consent and approval of the Maritime Administration. The resident agent designated and appointed by the foreign transferee shall be subject to approval by the Maritime Administrator. To be acceptable, the resident agent must maintain a permanent residence in the United States, shall be a banking or lending institution, or a ship operating or shipowning company incorporated under the laws of the United States, or a U.S. corporation which is satisfactory from the standpoint of known integrity and responsibility. No individual will be accepted as a resident agent.

The foreign transferee shall file with the Maritime Administration a written copy of the appointment of the resident agent, which copy shall be fully endorsed by the resident agent that it accepts the appointment, that it will act thereunder and that it will notify in writing the Maritime Administration in the event it is disqualified from so acting by reason of any legal restrictions. If a corporation is selected and approved as resident agent, service of process or notice upon any officer, agent, or employee of the corporation at its principal place of business would constitute effective service on, or notice to, the foreign transferee.

The subsequent transfer of ownership or registry of vessels which have been transferred to either foreign ownership or registry or both subject to Maritime Administration contractual control, as set forth above, will be subject to substantially the same Maritime Administration policy that governed the original transfer and sale, including such changes or modifications that have subsequently been made and continued in effect. Approval of these subsequent transfers will be subject to the same terms and conditions governing the transfer and sale of U.S. flag vessels to foreign registry or ownership or both at the time of the subsequent transfer,

The completion of all approved transactions, either by virtue of Sections 9, 37 and 41 of the Shipping Act, 1916, as amended

(46 U.S.C. 808, 835 and 839), or the Maritime Administration's contract with the foreign owner, will be authorized by notification in the form of a Transfer Order to all interested parties, upon the receipt of the executed contract, the required bond or other surety, and other supporting documents required by said contract.

In order that the Maritime Administration's records may be maintained on a current basis, the owner or transferee of the ship is required to notify the Maritime Administration of the date and place where the approved transaction was completed, and the name of the vessel, if changed. This information relating to the completion of the transaction and the change in name should be furnished to the Maritime Administration as soon as possible, but not later than ten days after the same las occurred.

III. VESSELS UNDER 3,000 GROSS TONS

Generally, the Maritime Administration will grant approvals required by Sections 9 or 37 or both of the Shipping Act, 1916, as amended, of vessels of under 3,000 gross tons provided the vessel is not needed for reasons of national defense and provided also that the foreign buyer and country of registry are acceptable to the Maritime Administration. Except in unusual circumstances, no conditions will be imposed.

[29 F.R. 12030, Aug. 22, 1964, as amended by Amdt. 1, 32 F.R. 4499, Mar. 24, 1967]

222.4 Notice of failure to comply herewith and that petition for relief may be filed.

222.5 Petition for relief.

AUTHORITY: The provisions of this Part 222 issued under sec. 21, 39 Stat. 736, as amended, sec. 204, 49 Stat. 1987, as amended; 46 U.S.C. 820, 1114, except as otherwise noted. § 222.1 Statements required to be filed pursuant to section 807, Merchant Marine Act, 1936.

(a) Statement of shipbuilder or ship operator. Every shipbuilder or ship operator holding or applying for a contract under the provisions of the Merchant Marine Act, 1936, as amended, and every subsidiary, affiliate, associate, or holding company of such shipbuilder or ship operator who employs or re

tains any person (as defined in paragraph (c) of this section) to present, advocate, or oppose, before Congress or any committee thereof, or before the Secretary of Commerce, the Federal Maritime Board, or the Maritime Administration, any matter within the scope of the Shipping Act, 1916, as amended, the Merchant Marine Act, 1920, as amended, the Merchant Marine Act, 1928, as amended, the Intercoastal Shipping Act, 1933, as amended, or the Merchant Marine Act, 1936, as amended, before performance by such person pursuant to such employment or retainer, shall file with the Secretary, Federal Martime Board/Maritime Administration, a statement containing the information specified in Form MA-807-1. While it is not required that Form MA807-1 be used, the statement must contain the information required by that form and the information must be arranged in the manner prescribed by that form. Copies of Form MA-807-1 may be obtained from the Secretary, Federal Maritime Board/Maritime Administration. Any changes which may occur in answer to any of the items in the statement shall be reported to the Secretary, Federal Maritime Board/Maritime Administration, within 10 days after such change.

(b) Statement of person employed or retained. Every person (as defined in paragraph (c) of this section) employed or retained by any shipbuilder or ship operator holding or applying for a contract under the provisions of the Merchant Marine Act, 1936, as amended, or employed or retained by any subsidiary, affiliate, associate, or holding company of such shipbuilder or ship operator to present, advocate, or oppose, before Congress or any committee thereof, or before the Secretary of Commerce, the Federal Maritime Board, or the Maritime Administration, any matter within the scope of the Shipping Act, 1916, as amended, the Merchant Marine Act, 1920, as amended, the Merchant Marine Act, 1928, as amended, the Intercoastal Shipping Act, 1933, as amended, or the Merchant Marine Act, 1936, as amended, shall file with the Secretary, Federal Maritime Board/Maritime Administration, within 30 days after the close of each calendar month during the period of such retainer or employment, a statement containing the information specified in Form MA-807-2. While it is not

required that Form MA-807-2 be used, the statement must contain the information required by that form and the information must be arranged in the manner prescribed by that form. Copies of Form MA-807-2 may be obtained from the Secretary, Federal Maritime Board/Maritime Administration.

(c) Definition of "person". For the purpose of this section, the term person is defined as in section 905 (b) of the Merchant Marine Act, 1936.

(d) Additional information. The Federal Maritime Board and the Maritime Administrator reserve the right to require the filing of additional information in any given case.

(Bec. 807, 49 Stat. 2014, as amended; 46 U.S. C. 1225) [22 F. R. 1087, Feb. 22, 1957]

NOTE: The reporting requirements contained in this section have been approved by the Bureau of the Budget in accordance with the Federal Reports Act of 1942.

§ 222.2

Forms of vessel utilization and performance reports prescribed.

(a) Pursuant to authority of section 212(A) of the Merchant Marine Act, 1936, as amended by Public Law 612, 84th Congress; 70 Stat. 332; 46 U.S.C. 1122a, the Secretary of Commerce has determined that it is necessary and desirable in order to carry out the purposes and provisions of the Merchant Marine Act, 1936, as amended (49 Stat. 1985, et seq.; 46 U.S.C. 1101, et seq.) to require an operator of a vessel in waterborne foreign commerce of the United States to file accurate reports on Form MA-578 with respect to passenger and dry cargo vessels, on Form MA-578A with respect to vessels carrying certain containerized cargo and on Forms MA-7803 and MA7804 with respect to tankers; such forms and instructions for the preparation thereof are hereby prescribed and approved.1 An accurate report on Form MA-578, vessel Utilization and Performance Report, shall be filed in duplicate with the appropriate District Director of Customs for transmittal to the Maritime Administration by the operator of every self-propelled dry cargo and passenger vessel of 1,000 or more gross registered

1 Copy each of the Forms MA-578 (1-67), MA-578A (3-21-67), MA-7803, and MA-7804, together with instructions for their use, respectively, are on file in the Office of the Federal Register. These forms and instructions may be obtained from the Marine Section, District Director of Customs at U.S. ports.

tons before midnight of the 15th day after entry into the first U.S. port and before midnight within 15 working days (Saturdays, Sundays, and Holidays excluded) after clearing the last U.S. port. Operators desiring to submit combination reports for dry cargo and passenger vessels (inbound and outbound portions) after clearing the final U.S. port may do so upon obtaining written permission from the Maritime Administration, Washington, D.C. 20235. In addition, and subject to the same qualifying and filing requirements set forth above, an accurate report on Form MA-578A, Supplemental Unitized Cargo Container Report, shall be filed by such operator when, on any one voyage, a vessel carries 10 or more (1) 8 x 8 x 10 feet or larger containers, or (2) half-height containers 8 feet in width and 10 or more feet in length, or (3) flatbeds 8 feet in width and 20 or more feet in length. Separate reports on Forms MA-7803 and MA-7804 for tankers shall be filed within 15 working days after entering or clearing. Forms MA-578, MA-578A, MA-7803, and MA7804 are required to be filed in duplicate for all voyages of merchant vessels operated by or for the account of the Department of Defense except vessels of the Military Sea Transportation Service (MSTS) nucleus fleet.

(b) By agreement with the Bureau of Customs, District Directors of Customs will be responsible for policing receipt of dry cargo and passenger vessel inbound, outbound, and combination inbound/ outbound reports on Form MA-578 and Form MA-578A as well as tanker inbound and outbound reports on Forms MA-7803 and MA-7804.

NOTE: The reporting requirements contained in this section have been approved by the Bureau of the Budget in accordance with the Federal Reports Act of 1942.

[G.O. 39; 3d Rev., Amdt. 3, 32 F.R. 7525, May 23, 1967]

§ 222.3 Penalty.

Section 212(A) of the Merchant Marine Act, 1936, as amended (Public Law 612, 84th Congress; 70 Stat. 332; 46 U.S.C. 1122a), provides:

SEC. 212(A). The operator of a vessel in waterborne foreign commerce of the United States shall file at such time and in such manner as the Secretary of Commerce may prescribe by regulations, such report, account, record, or memorandum relating to the utilization and performance of such vessel in commerce of the United States, as the Secretary may determine to be necessary or

desirable in order to carry out the purposes and provisions of this Act, as amended. Such report, account, record or memorandum shall be signed and verified in accordance with regulations prescribed by the Secretary. An operator who does not file the report, account, record, or memorandum as required by this section and the regulations issued hereunder, shall be liable to the United States in a penalty of $50 for each day of such violation. The amount of any penalty imposed for any violation of this section upon the operator of any vessel shall constitute a lien upon the vessel involved in the violation, and such vessel may be libeled therefor in the district court of the United States for the district in which it may be found. The Secretary of Commerce may, in his discretion, remit or mitigate any penalty imposed under this section on such terms as he may deem proper.

(Sec. 212(A), 70 Stat. 332; 46 U.S.C. 1122a) [G.O. 39, 3d Rev., 27 F.R. 4883, May 24, 1962]

§ 222.4 Notice of failure to comply herewith and that petition for relief may be filed.

(a) Every offender under the regulations in this part shall be advised by the collector of customs of any penalty incurred by him and of his right to apply for relief under § 222.5. If the offender fails to petition for relief or pay the penalty within 60 days from the date of mailing of the notice of violation as provided for herein, the case shall be referred immediately to the United States attorney for appropriate action, unless it appears that the person liable for the penalty is absent from the United States or during the said period was absent for more than 30 days, in which event the collector may withhold such action for a further reasonable time, or unless other action is expressly authorized by the Maritime Administrator. When a penalty is mitigated, and the mitigated penalty is not paid nor a supplemental petition filed within 60 days from the date a notice of the settlement is mailed to the petitioner, the matter shall be referred immediately to the United States attorney for appropriate attention, unless other action has been directed by the Maritime Administrator.

(b) No action looking to the remission or mitigation of a penalty shall be taken

(a) Any petition for relief from a penalty incurred under these regulations shall be addressed to the Maritime Administrator, signed by the petitioner, and filled with the collector of customs of the district in which the penalty was imposed. It shall set forth the facts relied upon the petitioner to justify his request for relief.

(b) Upon receipt of a petition, the collector shall cause such investigation to be made as the facts in the case may warrant. In forwarding the petition to the Maritime Administrator, he shall forward with it a copy of the report of the investigation, if any, a statement of all other facts which may have come to his knowledge, and his recommendation as to the final action to be taken. If the petition involves a matter which has been referred to the Department of Justice for the institution of court proceedings, the collector shall transmit the petition immediately upon receipt to the appropriate United States attorney and notify the petitioner of such action.

(c) The decision of the Maritime Administrator will be forwarded to the collector for delivery to the petitioner. (Sec. 212(A), 70 Stat. 332; 46 U.S.C. 1122a) [G.O. 39, 3d Rev., 27 F.R. 4883, May 24, 1962]

NOTE: The reporting requirements under this General Order have been approved by the Bureau of the Budget in accordance with the Federal Reports Act of 1942.

PART 237-REPAIRS TO VESSELS UNDER BAREBOAT CHARTER

Sec.

237.1 Detailed repair specifications; payment and audit.

237.2 Repairs outside United States prohibited; exceptions. 237.3 Consumption entries.

AUTHORITY: The provisions of this Part 237 issued under sec. 204, 49 Stat. 1987, as amended; 46 U.S.C. 1114.

SOURCE: The provisions of this Part 237 contained in General Order 51, 7 F.R. 910, Feb. 10, 1942, unless otherwise noted. § 237.1 Detailed repair specifications; payment and audit.

All required repairs and betterments (alterations and/or improvements) authorized for the owner's accounts shall be covered by specifications prepared by the charterer in sufficient detail to describe fully all items of work to be performed and shall be paid for by the

charterer and allowed for reimbursement to the charterer by the owner at rates not exceeding those which would have been paid had such work been accomplished under an existing master contract between the owner and the repair company, or in the absence of such a master contract at rates not in excess of those then being currently paid by the owner to the repair company or to other repair companies in the vicinity, and the charterer in ordering any such work otherwise than upon a basis of proper competitive bids shall cause full right of audit to be reserved to the owner.

§ 237.2 Repairs outside United States prohibited; exceptions.

No repairs, except as hereinafter provided, shall be performed outside of the Continental limits of the United States without specific authorization in each instance of a representative of the Maritime Administration: Provided, however, That such specific authorization shall not be required in the case of repairs of an emergency nature required for the safety of a vessel for its return to the United States or such work as is required for convoy operating purposes.

(a) The basis for calculation shall be the data relating to the vessel as certified in the register of the appropriate Classification Society. The American Bureau of Shipping record shall be used except for vessels not having this classification.

(b) The charts and methods outlined in "Speed and Power of Ships" by D. W. Taylor, shall be the bases for determining effective horsepower required, except that of the four methods given therein for wetted surface determination, the one based on Froude's formula shall be used. Calculations for effective horsepower required shall be made at speedlength ratio of 0.60 and corrected to actual speed-length ratio by the cube rule.

(c) The maximum total continuous horsepower available for propulsion (IHP, SHP, BHP) as determined from the register of the appropriate Classification Society, shall be used as a basis for determining the shaft horsepower available except that for all machinery of a steam reciprocating type, 0.90 mechanical efficiency shall be used with the IHP. The effective horsepower available to be used in conjunction with the speed calculations for single screw vessels shall be determined by multiplying the shaft horsepower available by an appropriate factor based on vessels of 450' length. For all vessels constructed subsequent to January 1, 1925 this factor shall be 0.50. For all vessels constructed prior to January 1, 1925 this factor shall be 0.50 for vessels having 6,000 SHP or more, 0.47 for vessels having power less than 6,000 SHP but more than 3,000 SHP, and 0.44 for vessels having 3,000 SHP or less. The above factors are to be corrected for length with an increase or decrease of 0.1 per 150' of length that the vessel is greater or less than 450'. (For new vessels 0.4 at 300 feet and 0.6 at 600 feet, etc.)

(d) For twin screw vessels the foregoing factors for single screw vessels shall be reduced by 10 percent.

§ 246.2 Other provisions.

(a) At any time the Maritime Administrator has the privilege to request a trial in deep water, either on a standard deep water measured mile or other course approved by the Maritime Administration. On this trial, the operator shall