2024-20615. Extension of Time for Decision in Investigation Into Conditions Affecting United States Carriers in Connection With Canadian Ballast Water Regulation in the United States/Canada Great Lakes Trade

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Federal Maritime Commission

1. [Docket No. FMC-2024-0008]

AGENCY:

Federal Maritime Commission.

ACTION:

Notice of extension of time and request for comments.

SUMMARY:

The Federal Maritime Commission (Commission) has extended by 90 days the time for decision in its investigation into conditions created by the Government of Canada (Canada) in connection with regulation of ballast water management systems that may adversely affect the operation of United States carriers in the United States/Canada Great Lakes trade.

DATES:

Submit comments on or before October 15, 2024.

ADDRESSES:

You may submit comments, identified by Docket No. FMC-2024-0008, by the following method:

Federal eRulemaking Portal: Your comments must be written and in English. You may submit your comments electronically through the Federal eRulemaking Portal at www.regulations.gov. To submit comments on that site, search for Docket No. FMC-2024-0008 and follow the instructions provided.

FOR FURTHER INFORMATION CONTACT:

For questions regarding submitting comments or the treatment of any confidential information, contact David Eng, Secretary; Phone: [phone]; Email: [e-mail].

SUPPLEMENTARY INFORMATION:

I. Introduction

On May 22, 2024, the Federal Maritime Commission (Commission) initiated an investigation, pursuant to 46 U.S.C. 42302, of whether conditions created by the Government of Canada (Canada) in connection with regulation of ballast water management systems adversely affect the operation of United States carriers in the United States/Canada Great Lakes trade, in particular the carriers operating vessels that may become subject to regulation in September 2024, within the meaning of 46 U.S. Code, chapter 423 (Foreign Shipping Practices) (46 U.S.C. 42301-307). Having determined that the investigation would be enhanced by gathering and reviewing additional information, the Commission now extends by 90 days, from September 19, 2024, to December 18, 2024, the time for decision under 46 U.S.C. 42302(c).

II. Summary of Status of Investigation

On May 22, 2024, the Commission on its own motion initiated a Chapter 423 investigation into Canadian ballast water management regulation in the Great Lakes. See Investigation into Conditions Affecting United States Carriers in Connection with Canadian Ballast Water Regulation in the United States/Canada Great Lakes Trade, FMC-2024-0008, 89 FR 44979 (May 22, 2024) (May 2024 Notice of Investigation). In 2020, the Commission had opened an investigation under 46 U.S. Code, chapter 421 following a petition by the Lake Carriers Association (LCA). See FMC Docket No. 20-10. The petition alleged that Canadian regulation set to take effect in September 2024 would create conditions unfavorable to shipping by requiring U.S. vessels to install new ballast water management systems. Meanwhile, it became apparent that the U.S. Environmental Protection Agency (EPA), in its rulemaking to implement the Vessel Incidental Discharge Act (VIDA), is likely to issue rules that are less restrictive than those of Canada. May 2024 Notice of Investigation, 89 FR 44979. In a February 2024 letter, the LCA had noted that only a small group of U.S. Lakers built after 2008 (five vessels) would be affected by the Canadian regulation in 2024, with about 50 older Lakers not subject to it until 2030. Id. The Commission's Notice of Investigation was issued on May 22, 2024 which, under the 120-day time limit set by 46 U.S.C. 42302(c), means the current deadline to complete the investigation is September 19, 2024. ( print page 74274)

After the May 2024 Notice of Investigation, the investigation proceeded, and the FMC received 14 comments in June 2024. The Canadian government and those representing the interests of Canadian carriers, as well as those representing environmental interests, opposed the potential imposition of sanctions. On the other hand, those representing the interests of U.S. carriers and workers were supportive of such measures. At the same time Transport Canada, the responsible Canadian agency, established a procedure for seeking exemptions that became available to affected U.S. carriers in late July 2024, although the Commission understands that a comparable process had been available to Canadian carriers much earlier. See Procedure to request an exemption to install Ballast Water Management Systems under Ballast Water Regulations for foreign-flagged vessels in Canadian waters, Transport Canada (July 25, 2024) (Exemption Procedure), available at https://tc.canada.ca/​en/​marine-transportation/​marine-safety-management-system-tp-13585-e-tier-ii-procedures/​tier-ii-procedure-request-exemption-install-ballast-water-management-systems-under-ballast-water-regulations-foreign-flagged-vessels-canadian-waters. The Commission also understands that the relevant Canadian rule is due to take effect as to U.S. carriers shortly, specifically on September 8, 2024.

In light of the above, the Commission now extends the time for decision in its Chapter 423 investigation by 90 days, from the current deadline of September 19, 2024, to December 18, 2024, and it establishes a new comment period to gather more information on the apparent disparity between the exemption processes available to U.S. and Canadian carriers, including the difference in when the exemption procedures became available. In particular, the Commission seeks to gather and review more information about whether the exemption processes may have themselves led to adverse conditions in violation of 46 U.S.C. 42302(a), including information about developments occurring after the end of the initial comment period in June 2024. That will help the Commission continue to investigate whether the laws, rules, policies, or practices of Canada result in conditions that “adversely affect the operations of United States carriers in United States oceanborne trade” and that “do not exist for foreign carriers of [Canada] in the United States under the laws of the United States.” 46 U.S.C. 42302(a).

If the agency concludes that the standard of section 42302(a) is met, it is authorized to take certain actions to encourage remediation of those conditions. See May 2024 Notice of Investigation, 89 FR 44979-80. Specifically, the Commission may take actions “against any foreign carrier that is a contributing cause, or whose government is a contributing cause, to those conditions.” 46 U.S.C. 42304(a). Potential actions include imposing limits and/or fees on Canadian-flagged vessels that visit U.S. ports and requesting that the U.S. Department of Homeland Security and the U.S. Coast Guard refuse clearance and deny entry of such vessels into the U.S., or detain such vessels. See46 U.S.C. 42304, 42305. Any such fees could be substantial, as they are authorized by law at a level up to $2,559,636 per voyage. See46 CFR 506.4. Before any action is taken under 46 U.S.C. 42304 or 42305, the relevant determination is submitted for Presidential review, within 10 days of receipt, under 46 U.S.C. 42306.

III. New Request for Comments

As explained above, the Commission determined that the above situation meets the threshold requirements for consideration under the relevant statutory and regulatory authority, and in May 2024, it initiated a Chapter 423 investigation into whether the situation has created conditions that adversely affect the operations of United States carriers. See46 U.S.C. 42302; 46 CFR 555.3, 555.5, 555.6.

The Commission now finds that it would enhance its investigation to ask interested persons to submit written comments containing arguments, experiences, and/or data relevant to the options that have been available for carriers to seek an exemption from the Canadian ballast water management regulations going into effect in September 2024. In particular, the Commission seeks information about the extent to which such processes have differed based on whether the carrier is a U.S. carrier or a Canadian carrier, including but not limited to when the exemption processes became available for affected carriers in those categories; information that was unavailable when the last comment period closed in June 2024; and information about when specific carriers were granted or denied exemptions from the requirements at issue, as well as the basis for such decisions.

The Commission's jurisdiction under 46 U.S.C. 42302 is broad, and the agency welcomes comments not only from the Government of Canada, but also from container shipping interests, bulk cargo interests, vessel owners, individuals and groups with relevant information on commercial and environmental considerations, and anyone else with relevant information or perspectives on this matter.

As the Commission proceeds with this investigation, it may determine to request additional comment or gather information through other means as authorized under 46 U.S.C. 42303 and 46 CFR 555.5, 555.6.

By the Commission.

David Eng,

Secretary.