The U.S. Federal Maritime Commission, an independent agency responsible for regulating the U.S. international ocean transportation system, has launched an investigation into whether upcoming Canadian regulations on ballast water management systems in the U.S.-Canada Great Lakes trade unfairly impact U.S. flagged vessels.

The investigation will determine whether these regulations, set to take effect for some vessels in September 2024, violate Foreign Shipping Practices under the 46 U.S.C. Chapter 423.
U.S. companies operating within the Great Lakes trade have expressed concerns that the upcoming regulations impose a heavy burden on their operations and create an unfair advantage for their Canadian counterparts.

Title 46, Chapter 423 of the US Code empowers the Commission to scrutinize foreign laws and practices that may adversely affect US carriers in the ocean-borne trade.

The new Ballast Water Regulations aim to reduce aquatic invasive species and protect biodiversity in Canadian waters. The regulations transition from mid-ocean ballast water exchange to modern management systems that clean ballast water before release. Canada is working towards regulatory compatibility with the U.S., requiring U.S. vessels to follow the same rules when operating in Canada, excluding those merely passing through Canadian waters.

The Commission has found sufficient evidence related to the Canadian ballast water regulations to proceed with a Foreign Shipping Practices investigation. The investigation is to be led by the Commission’s General Counsel, who will compile a report of his findings and recommendations within the next 120 days, barring any approved extensions.

The Commission is actively seeking public comments on the investigation and has opened a submission portal for comments until June 21, 2024. If the investigation concludes that there has been a violation of the Foreign Shipping Practices provisions, sanctions may be imposed on Canadian-flagged vessels, including limitations on calling at US ports and significant fees.

This investigation is part of the Commission’s ongoing scrutiny of Canadian government policies and regulations affecting US-flagged Great Lakes operators. The Lake Carriers’ Association, a trade group representing US-flagged operators in the Great Lakes, originally brought this issue to the Commission’s attention in March 2020. As a result, the Commission began an Investigation of Regulations Affecting Shipping in Foreign Trade under its authority from 46 U.S.C. Chapter 421.

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