US Maritime bill targets terrorist states targets terrorist states
The United States wields a new tool in its effort to combat Iran: the Coast Guard bill.And though the legislation still sits on the president’s desk, it may already have affected world trade, Politico reports.
A tiny provision in the Coast Guard authorization bill would ensure that organizations that inspect ships for the United States don’t also do so for terrorist-backed countries. Intended to pressure Iran, these few lines underscore the more complex issues of ship security, the Coast Guard’s responsibilities and the somewhat shadowy world of third-party agencies known as classification societies.
These organizations evaluate vessels and approve their safety plans, a requirement under international maritime treaties. Their certifications serve as the green light into major ports and are necessary for conducting international trade.
“It made no sense that we do business with companies that turn around and do business with Iran,” Rep. Mike McCaul (R-Texas), the incoming House Homeland Security Committee chairman who pushed the legislation, told POLITICO. “It’s kind of part and parcel of the sanctions we were trying to do.”
The China Classification Society last month confirmed it had stopped interacting with Iran’s vessels, making it the last of the world’s 13 leading societies to do so.
McCaul considered it a direct result of the impending legislation, which he, Senate Homeland Security and Government Affairs Committee Chairman Joe Lieberman (I-Conn.) and Sen. Susan Collins (R-Maine) introduced last year as the Ethical Shipping Inspections Act.
An Iranian official recently expressed concern about the decrease in classification societies willing to do business with his country’s vessels.
“During the past months due to direct and indirect measures taken by some governments, unfair and undue restrictions have been imposed against Iran’s commercial shipping industry,” Ali Akbar Marzban, Iran’s deputy permanent representative to the International Maritime Organization, told the agency, according to a Reuters report.
Marzban singled out the U.S. for pressuring other countries into action and said the move undermines maritime safety and international cooperation.
Countries, especially ones without the resources to undergo their own inspections, contract with these private or quasi-governmental agencies. The U.S. has just one, Houston-based American Bureau of Shipping, which lobbied for the legislation.
In the U.S., the Coast Guard relies on classification societies to approve ships’ technical and safety plans. But right now, a classification society could act as the organization that evaluates a U.S.-flag ship and an Iranian one. The amendment allows the U.S. to revoke an organization’s delegation for buddying with the enemy.
“Not only does this dual, conflicting role fly in the face of the intent of international sanctions, it also undermines America’s ability to stop the very actions our sanctions against Iran are designed to address,” Lieberman and Collins wrote in an op-ed last year. “The loophole allowing vessels controlled by sanctioned countries to do business as usual needs to be closed.”
The provision benefits the American classification society, which already had to follow U.S. rules regarding Iran. Six foreign-based organizations can also inspect vessels on the Coast Guard’s behalf.
“Essentially, this put the same restrictions on foreign-class societies as it did on ABS,” said Duncan Smith, a maritime lawyer with Blank Rome. Smith also noted the commercial side of the scenario: who gets to profit.
“Ships have this annoying ability to move around, and so wherever ships are you may need a class society,” he said. “A lot of the more prominent and competent have come into the U.S. and have offices here and have formed subsidiaries here, and ABS has gone overseas and established offices to perform functions there.”
Jean Gould, ABS’s vice president for external affairs, said the organization alerted lawmakers about the situation because it was unfair. “ABS believes that classification societies that serve as agents of the United States Coast Guard in the review and inspection of US-flagged vessels should comply with United States sanctions levied against Iran,” Gould wrote in an email.
Rep. Rick Larsen (D-Wash.), ranking member on the House Coast Guard and Maritime Transportation Subcommittee, put it simply: “If you work for Iran, you can’t work for us.”
He told POLITICO the provision is a “net plus for the bill” and “another tool in the State Department’s tool box.”
The Coast Guard said it could not comment on pending legislation.
Foreign vessel safety concerns span years. The issue even burst open a normally closed-door conference on the 2005 Coast Guard authorization bill. The House-passed version would have mandated that the Coast Guard approve safety plans for every foreign ship entering American ports. But such a change would have involved more money and employees, which the Bush administration opposed.
Former Rep. Jim Oberstar (D-Minn.), then the ranking member on the House Transportation Committee, suggested instead asking the Coast Guard to certify classification societies.
But the Coast Guard disliked that proposal even more, and the law stayed the same.