The Maritime Administration has reaffirmed its opinion that a deal allowing Switzerland-based Viking Line to sail U.S. waters is a bona-fide time charter.
Viking expects to start Mississippi River cruises in June on the 450'x75', 386-passenger Viking Mississippi being built by Edison Chouest Offshore (ECO). River 1 LLC, a Chouest affiliate, would time charter “a cruise vessel that it would construct, own and operate, to Viking USA, a non-citizen,” for an initial term of eight years with options extending to 30 years total, according to documents on Marad’s site.
U.S.-flag operators questioned Marad’s initial opinion that the deal was a time charter and not a bareboat charter and said it was not open about its deliberations. Their interests must be considered before the agency “acts to change the standards and processes it has historically applied in ‘time charter’ determinations,” operators told Marad. “Here, the economic consequences are substantial, since approval of the charter means entry into the Jones Act coastwise passenger market by a large foreign cruise line.”
In its final action published earlier this month, Marad rejected their objections, saying it gave adequate rationale for its earlier opinion. “Marad applies well-known, black letter maritime law to distinguish between bareboat and time charters, which we provided in the detailed summary,” the agency said.
The Coast Guard has said it saw no problem documenting the vessel with a coastwise endorsement.
Among the findings Marad said support a time charter designation: Chouest will provide and pay the crew; the master — employed by Chouest’s vessel manager — will “command the vessel’s operation” and have “authority over Viking’s hospitality contractor staff with respect to operation of the vessel;” and Chouest will pay the vessel’s operating expenses.
Vessels can be time chartered to non-citizens, but U.S. citizens must have operational control. “The time charterer obtains the right to designate the ports of call and the cargo carried,” Marad said.
“We are disappointed in Marad’s final action,” said American Queen Voyages COO Shawn Bierdz. “It is clear that U.S. maritime stakeholders should be evaluating options to ensure that transparency — as mandated by Congress — and a clear regulatory framework are at the forefront of Marad’s review process.”
Both American Queen and American Cruise Lines, which declined to comment, sail the Mississippi.
Neither Viking nor Chouest responded to a request for comment on Marad’s final action.
Chouest earlier said "it is a long-standing supporter of the Jones Act, having employed hundreds of vessels in domestic trade over several decades," and time chartered them to numerous clients. The river cruise project “is in compliance with all applicable laws, rules, and regulations."
Viking has said previously its vessels’ ownership, crewing and charter arrangements would be “in full compliance with maritime laws."