The US Federal Maritime Commission (FMC) has opened an investigation to examine whether foreign shipping laws and regulations, especially those related to “Flag of Convenience” practices, have produced unfavorable conditions to the foreign trade of the United States. In its formal notice announcing the investigation, the FMC stated that recent casualties, like the MV DALI bridge allision, suggest a “race to the bottom” where countries compete by lowering safety and regulatory standards to attract shipowners and increase revenue associated with registry fees. The FMC also pointed to concerns with vessels that are operating outside regular maritime frameworks to potentially engage in illegal or illicit trade. The non-adjudicatory investigation will broadly examine current conditions to provide a factual basis for the Commission’s future effort to implement a “comprehensive and enforceable approach” to regulating foreign flagging practices. Consistent with this, the Commission seeks comments on best practices for responsible vessel flagging; how unfavorable practices may endanger the reliability of international ocean shipping; and what regulatory measures the Commission might implement to address these risks. Comments on the subjects set out in the Notice may be filed in the FMC Docket on or before August 20, 2025. The full text of the notice is available here: Federal Register :: Investigation Into Flags of Convenience and Unfavorable Conditions Created by Certain Flagging Practices.
For more information on the FMC’s investigation, please contact us at: info@chaloslaw.com
