Action Item: A recently published guidance document issued by the National Vessel Documentation Center (“NVDC”) for the first time provides the public with the key criteria it uses in making U.S. Build and Rebuild determinations. Stakeholders should review this guidance document for application to their interests.
In October 2017, the NVDC quietly posted a policy guidance document under the determination letters section of the NVDC webpage. This “Review Criteria for Steel Weight Components WRT U.S. Build and Foreign Rebuild Determinations” (the “Review Criteria”) offers important insights into how the U.S. Coast Guard Naval Architecture Division (“NAD”) reviews various steel components with respect to the definitions of “hull” and “superstructure” under U.S. Coast Guard regulations. The Review Criteria are vital to the NVDC’s ultimate determination of whether a vessel may receive a Certificate of Documentation with a Coastwise Endorsement to operate in the coastwise trade.
NAD Reports and Determination Letters
The NVDC makes U.S. Build and Rebuild determinations following requests from interested stakeholders and issues in response to such a request what are commonly referred to as “determination letters.” Historically, the NVDC commonly issued these determination letters without seeking assistance from the NAD. However, following litigation between the NVDC and interested parties a number of years ago regarding these determinations, the NVDC started obtaining input from the NAD on naval structural and watertight integrity matters with regard to the U.S. Build and Rebuild standard to assist the NVDC in making determinations.
It is noteworthy that when the NVDC first started consulting with the NAD, the NVDC would include a copy of an NAD report with its determination letter responses. However, a few years ago the NVDC stopped providing copies of this correspondence claiming it was protected from disclosure. This was an unfortunate turn of events as the NAD report provided invaluable guidance as to how the NVDC came up with its decisions in its determination letters.
Nonetheless, some interested parties who practice in this area recently requested that the NAD release their reports under the Freedom of Information Act (“FOIA”). It now appears that the NVDC decided to publish the Review Criteria in possible reaction to those same FOIA requests. The Review Criteria sheds considerable light on how the NVDC prepares determination letters.
Conclusions and Recommendations
The posting of the Review Criteria on the NVDC website is an important step in helping stakeholders understand how the Coast Guard interprets the hull and superstructure with regard to making U.S. Build and Rebuild determinations on coastwise eligibility. This transparency should be welcomed by the maritime industry. However, industry stakeholders should be aware that the guidance document only provides a tool to assist stakeholders in understanding and complying with the complex nuances of the U.S. Build and Rebuild standards. In this regard, it would be prudent for stakeholders to obtain the advice of counsel specializing in this type of work when constructing vessels to help ensure the vessels meet U.S. Build and Rebuild coastwise trade standards.
© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reprint. Notice: The purpose of this update is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, the accuracy and completeness of which cannot be assured. This update should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.