Chalos & Co, P.C. to be Featured in July 2012 IBA Maritime Newsletter
The following article was prepared by George M. Chalos and will be featured in the July 2012 issue of the International Bar Association's ("IBA") Maritime & Transport Law News. The IBA was established in 1947 and is the world's leading organization of international legal practitioners, bar associations, and law societies, with a membership of more than 45,000 individual lawyers and over 200 bar associations and law societies spanning all continents. For more information about the IBA, please visit their website at www.ibanet.org
Mr. Chalos's article, entitled "Sailing the Seas of Uncertainty: The Fight for Due Process for Ship Owners and Seafarers in MARPOL Related Detentions at U.S. Ports", discusses the increasingly unreasonable demands imposed by the U.S. Coast Guard on ship owners and seafarers when foreign flagged vessels are detained in connection with an investigation into suspected violations of MARPOL 73/78, as codified in the U.S. Code as the Act for the Prevention of Pollution from Ships ("APPS").
Sailing the Seas of Uncertainty: The Fight for Due Process for
Ship Owners and Seafarers in MARPOL Related Detentions at U.S. Ports
It is well known throughout the maritime industry that the United States Coast Guard ("USCG") aggressively pursues a program of boarding and inspecting foreign flag-state vessels calling in U.S. ports for possible violations of MARPOL 73/78, as codifed in the U.S. Code as the Act for the Prevention of Pollution from Ships ("APPS"), 33 U.S.C. § 1901 et seq. (i.e. – the U.S. adaptation of MARPOL). This initiative has elicited hundreds of millions of dollars in fines from Owners and Operators who have either pled guilty or, on much rarer occasions, have been convicted after trial. When the USCG detains a foreign flagged vessel alleged to have committed a MARPOL violation, the effects of the detention on the Owner and Operator can be economically devastating, as well as personally overwhelming for the crew. The government's tactics in these types of cases annually leads to dozens, if not hundreds, of foreign seafarers being required to spend many months and even years functionally detained in the United States without due process as potential "material witnesses" to or "targets of" the investigations into alleged violations.
What many do not realize is that once an investigation is initiated, the USCG, through power purportedly conferred under 33 U.S.C. § 1908(e), asserts its broad agency discretion to demand security from the Owner and Operator to stand in the place of the vessel in order to satisfy potential criminal fines and civil penalties for alleged MARPOL violations. Pursuant to § 1908(e), the USCG may and does request the U.S. Customs & Border Protection Agency ("CBP") to withhold the vessel's customs departure clearance until the security demanded is "agreed". Absent the full acquiescence and acceptance by the Owner and Operator to the demands of the U.S. authorities for security, the subject vessel will not be permitted to depart the United States. Specifically, § 1908(e) states:
If any ship subject to the MARPOL Protocol, Annex IV to the Antarctic Protocol, or this chapter, its owner, operator, or person in charge is liable for a fine or civil penalty under this section, or if reasonable cause exists to believe that the ship, its owner, operator, or person in charge may be subject to a fine or civil penalty under this section, the Secretary of the Treasury, upon the request of the Secretary, shall refuse or revoke the clearance required by section 91 of title 46, Appendix. Clearance may be granted upon the filing of a bond or other surety satisfactory to the Secretary. (emphasis added).
What is properly encompassed by the term "surety" under the statute is unclear and a developing area of the law. Previously, the USCG had no consistent policy on what to ask for security, or the amount sought or the form. The type of surety required to obtain the return of the vessel's departure clearance was generally negotiable in scope, form and quantum. Now, however, in any circumstance where the USCG has (or plans) to initiate a criminal investigation, there is a strict, pro-forma "Agreement on Security" that must be agreed to by the Owner and Operator in order to have the vessel's departure clearance reinstated by CBP. The non-negotiable conditions contained in every proposed "Agreement on Security" presented by the USCG require significant concessions of rights and defenses available to an accused Owner and Operator and impose stringent requirements including, inter alia, that Owner and Operator:provide for the indefinite detention of foreign seafarers identified by the USCG without implication of the individuals' 'due process' rights, and while bearing all costs (including wages, lodging, transportation, medical care, and per diem) for the indefinite detention; encourage these crewmembers, including those who may be the subjects and/or targets of criminal investigation, to cooperate with the government; stipulate to the authenticity of documents and items seized from the vessel by the United States; pay to repatriate the foreign citizens once they are released from their detention; facilitate the introduction of evidence against the Owner and/or Operator at a future criminal trial, in return for releasing property that is owned by the Owner and Operator; and waive jurisdictional defenses; and, enter an appearance in any criminal or civil penalty actions brought against the Owner and/or Operator. The USCG further insists upon the inclusion of a provision that would cause the Owner and Operator to forfeit any security posted if the government unilaterally declared the Owner and Operator to be in breach of any of the terms of the "Agreement on Security." All of these terms and clauses are based upon the USCG's self-serving interpretation of the authority granted by § 1908(e).
Challenging the terms imposed by the USCG and the required concessions that Owners and Operators are being forced to make in order to obtain their vessel's departure clearance, is a developing and, as of now, is an emerging area of law. The first decision an Owner and/or Operator must take is whether to acquiesce and sign the "Agreement on Security" under duress (and seek challenge the terms at a later date); or to refuse to tamper with the rights of the crew members and seek to have the District Court review the USCG's demands on an emergency basis. In addition, although seafarers are significantly impacted by the terms and conditions forced upon Owners and Operators by the USCG's required "Agreement on Security," the government does not allow the involvement of these individuals to negotiate the length of time or the conditions under which they are required to remain in the United States during a pending investigation and/or prosecution. In most of these cases, the crewmembers are stuck in a roadside motel, in a country where they do not speak the language, and required to remain in the federal district for an indefinite and unlimited time. Worse yet, when a seafarer seeks to exercise a right to his passport and to depart the jurisdiction, not only do the government authorities vehemently oppose such a departure, but actively and regularly represent to the district courts that the crewmembers are within the jurisdiction "voluntarily," as a result of the "Agreement on Security" imposed upon the seafarer's employers.
For an Owner and Operator, dealing with an investigation by U.S. authorities into a possible MARPOL violation can be an extremely difficult ordeal riddled with many difficult questions to be answered and decisions to be taken with no clear answer readily at hand. Given the evolving nature of the case law interpreting the relevant statutes and regulations at issue, the ultimate decision in any particular case is often based upon the individual Judge's 'gut instincts.' In order to navigate through the uncharted waters of amorphous agency action, there must be a better judicial understanding of the rights and remedies available at each step in the inextricably intertwined agency investigation and criminal prosecution.
For more information on the USCG's investigation and prosecution of suspected MARPOL violations or and/or how the relevant U.S. law applies to any specific set of facts or circumstances, please feel free to contact Chalos & Co, P.C. – International Law Firm at: firstname.lastname@example.org