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US Federal Maritime Commission to Investigate ‘Flags of Convenience’ and Foreign Vessel Practices

The US Federal Maritime Commission (FMC) has initiated a non-adjudicatory investigation to examine whether foreign vessel flagging laws, regulations, or practices—including so-called “flags of convenience”—are creating unfavorable conditions for the foreign trade of the United States. This inquiry will also review competitive methods employed by owners, operators, agents, or masters of foreign-flagged vessels.

In its formal announcement, the FMC highlighted concerns stemming from recent maritime incidents, such as the MV DALI bridge allision, which suggest a “race to the bottom” where countries lower safety and regulatory standards to attract shipowners and increase registry-related revenue. Additionally, the Commission expressed worries about vessels operating outside traditional maritime frameworks, potentially facilitating illegal or illicit trade.

The investigation aims to provide a comprehensive factual basis for future FMC efforts to develop a “comprehensive and enforceable approach” to regulating foreign flagging practices. The Commission invites public comments on topics including best practices for responsible vessel flagging, the impact of unfavorable practices on the reliability of international ocean shipping, and potential regulatory measures the FMC might adopt to mitigate these risks. Comments must be submitted in the FMC docket by August 20, 2025.

Source: Federal Register :: Investigation Into Flags of Convenience and Unfavorable Conditions Created by Certain Flagging Practices

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