Coast Guard:

Anti-Reflagging Act Has Mixed Impact on U.S. Fishing and Ship Rebuilding

RCED-91-27: Published: Oct 25, 1990. Publicly Released: Nov 26, 1990.

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Pursuant to a congressional request, GAO evaluated provisions of the Commercial Fishing Industry Vessel Anti-Reflagging Act, focusing on the: (1) act's impact on the groundfish industry; and (2) Coast Guard's procedures for enforcing certain act prohibitions.

GAO found that: (1) the act's American control provisions had little impact on ensuring increased American control of the U.S. fishing industry, resulting primarily from the Coast Guard's interpretation of the act's grandfather clauses exempting vessels that were previously licensed and operating in U.S. coastal waters before the act's enactment; (2) the Coast Guard believed that the grandfather exemptions remained with the vessels even if they were subsequently sold to foreign-owned companies, giving foreign-owned companies continued access to U.S. fisheries; (3) the act's prohibitions against foreign rebuilding of vessels used in U.S. fisheries were likely to have a significant impact, since the grandfather exemptions that allowed foreign rebuilding were tied to specific deadlines, all of which have passed; and (4) vessels rebuilt in a foreign country had to be delivered to the owners before July 28, 1990 to be eligible for U.S. fishery privileges, but after that deadline, owners who desired to rebuild their vessels and who wished to participate in U.S. fisheries would likely rebuild in U.S. shipyards.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: A court ruled that the Coast Guard's interpretation was incorrect and ordered it to require industry to comply with the act's American control provisions. The Coast Guard appealed the decision and, in November 1992, its appeal was upheld. Further court action or legislation is unlikely.

    Matter: The Anti-Reflagging Act's American control provisions have had little impact on ensuring that U.S. fishery operations are controlled by U.S. citizens. This is a result of the Coast Guard's interpretation allowing the grandfather exemption to remain with a vessel even if the vessel is subsequently sold to a foreign-owned company. Consequently, should Congress desire another result, it may wish to consider changes to the existing legislation.


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