Recent developments concerning U.S. port fees targeting vessels constructed in the People’s Republic of China, the U.S. Trade Representative (USTR) and U.S. Customs and Border Protection (CBP) have confirmed that the entity identified as the “vessel operator” on CBP Form 1300 will be held liable for payment of these fees. In most cases, this operator will be the party named on the vessel’s Certificate of Financial Responsibility (COFR).  Otherwise, the identity of the operator can be proven by providing “verifiable” charter or lease arrangements.  If such agreements will be relied upon in identifying the operator in lieu of the COFR, it may be advisable to notify the parties to such agreements that such documents could be presented to governmental authorities for identification purposes.

CBP’s reliance on the COFR and Form 1300 as indicators of operational responsibility necessitates careful scrutiny of group structures, pooled ownership arrangements, and fleetwide operational frameworks to prevent inadvertent exposure. This clarification has given rise to renewed concerns regarding the risk borne by registered owners who remain COFR-named despite chartering out the vessel, bareboat charterers lacking upstream or downstream indemnities, and time charterers where operational control is not aligned with the COFR holder.

Uncertainties are particularly likely where fleets are operated across multiple special purpose vehicles or bareboat structures, where the COFR-named party does not reflect the commercial operator or party earning hire, or where ownership and management structures obscure actual control. Members are strongly advised to assess whether their current fleet structuring accurately reflects the party exercising operational and legal control, whether inconsistencies in COFR or Form 1300 documentation may trigger unintended liability, and whether their existing arrangements could expose affiliated entities to regulatory or reputational risk under the USTR regime.

Can the COFR Operator Be Changed?

Technically, the COFR holder may be changed by submitting a revised application to the U.S. Coast Guard’s National Pollution Funds Centre (NPFC). However, the COFR framework is designed primarily to assign financial liability and regulatory responsibility for pollution incidents, rather than to accommodate the operational realities of dynamic commercial fixture arrangements. Any change in the COFR holder requires supporting documentation evidencing operational control, such as a bareboat charter, and the issuance of updated or substitute guarantees from an approved financial guarantor, typically SIGCo or WQIS. Importantly, the processing time for such changes may not align with the commercial realities of short-term voyages or urgent port calls.

In practice, Members are advised not to rely on COFR reassignment as a tool for managing liability under the USTR fee regime. Instead, emphasis should be placed on ensuring that charterparty terms are properly aligned and that operational control is clearly documented and communicated.

Bespoke Charterparty Clauses

Parties may seek to rely on the general wording in their NYPE form charters, where provisions concerning “port charges” or “usual expenses” incurred during entry into or departure from ports are commonly allocated to the charterer. However, there is inherent ambiguity as to whether these recently introduced U.S. fees qualify as “port charges” and even greater uncertainty as to whether they could reasonably be characterised as “usual expenses”.

Accordingly, in the absence of a bespoke clause clearly identifying which party is responsible for these fees, disputes are likely to arise over the interpretation of standard form provisions and any relevant rider clauses.

INTERTANKO Model Clauses – U.S. Chinese Nexus Fees

To mitigate this uncertainty and provide clear contractual certainty, INTERTANKO has issued the following recommended clauses for incorporation into charterparties:

U.S. Chinese Nexus Fees Clause – Time Charter (Including Period Charter)

“The Charterers shall be responsible for and shall indemnify, defend and hold harmless the Owners against all fees, charges, penalties, or duties imposed or levied by the United States or any of its agencies, arising out of or in connection with the vessel having been constructed in the People’s Republic of China, including but not limited to any port entry fees imposed pursuant to Section 301 of the Trade Act of 1974 or related measures.”

U.S. Chinese Nexus Fees Clause – Voyage Charter / Time Charter Trips

“Any port fees, levies, tariffs, or similar charges imposed by U.S. authorities by reason of the vessel’s place of build being the People’s Republic of China shall be for Charterers’ account. Owners shall provide any relevant documentation regarding the vessel’s place of build upon request. Charterers shall indemnify and hold Owners harmless for any such charges, including any delay, penalty, or cost incurred as a result of such classification.”

In view of this, owners and charterers should immediately review COFR listings to determine who CBP will treat as the “operator” for enforcement purposes. Charterparty documentation must be carefully aligned with the actual operational arrangements, particularly where vessels are engaged in U.S. trades. Charterparties, whether time or voyage, should be amended to incorporate provisions allocating responsibility for Chinese build-related U.S. port fees. Further, Members are urged to avoid structural ambiguity or layered ownership that could expose them to inadvertent liability under CBP’s current enforcement methodology.

Exemptions

At present, the Service Fees do not apply to vessels entering the continental United States from a foreign port or point located fewer than 2,000 nautical miles away. This exemption is understood to be primarily aimed at preserving existing U.S.-Canada shipping arrangements.

However, it appears unlikely that the use of nearby non-U.S. ports, such as Vancouver, Halifax, Bermuda, or Ensenada, as tactical bunkering or cargo staging points will suffice to qualify a subsequent U.S. port call as exempt. Where the overall voyage exceeds 2,000 nautical miles from the original foreign port of departure, the fee is expected to apply.

The regulatory intent of the USTR action is to favour U.S.-operated ships of Chinese build in circumstances where U.S.-built tonnage is unavailable, particularly in short-sea and Caribbean trades. If the exemption is perceived to be undermined by routing practices designed to circumvent the fee, further clarification may follow, and ultimately the matter may fall to federal agency review or judicial interpretation by the U.S. courts.

The SHIPS for America Act

The broader legislative context for these developments lies in the SHIPS for America Act, a bill aimed at supporting the health of U.S. port infrastructure, shipbuilding capacity, and maritime security. Introduced alongside tariff enforcement measures, the Act reflects a deliberate policy shift toward protectionist industrial strategy.

Although not yet fully enacted, the bill signals an intention to strengthen domestic shipbuilding, to discourage reliance on Chinese-built vessels for U.S. trade, and to formally embed national security considerations into the structure of maritime trade policy. While the Act does not itself impose fees, it provides the underlying rationale for the USTR’s actions and foreshadows the likelihood of further regulatory layering.

Potential future measures include flag- or build-based prioritisation in port access or federal contracts, increased disclosure requirements regarding vessel sourcing, and even the denial of terminal or pilotage access to Chinese-built vessels in sensitive geographic regions. Members whose fleets include Chinese-built tonnage operating in U.S.-facing pools, alliances, or commercial arrangements should assess their long-term regulatory exposure, even where existing fixtures remain viable in the near term.

The Swedish Club continues to monitor regulatory developments closely, including the potential expansion of U.S. port fee enforcement, the progress of the SHIPS for America Act, and emerging trends in charterparty disputes arising from this regime. Members are strongly encouraged to share experiences of enforcement, operational impact, or legal uncertainty so that further guidance can be refined and shared.

Lucie Ryan, Senior Claims Executive – P&I and FD&D, Team Greece lucie.ryan@swedishclub.com