Vessel Financing Assistance Law and Legal Definition
Vessel financing assistance refers to a guaranty provided to a federal ship. Vessel financing assistance is governed by the Merchant Marine Act, 1936. Financial assistance is provided to those federal vessels that are operating in or will be operated in the U.S. coastwise trade.
A vessel receiving finance for construction, reconstruction, or reconditioning must meet the following criteria:
1.A Vessel, must be constructed in the U.S.. Construction in the U.S. means that the vessel is assembled in a shipyard geographically located within the U.S;
2.A federal vessel must meet the applicable U.S. Coast Guard requirements;
3.An eligible export vessel must be constructed in accordance with the requirements of the International Maritime Organization and must meet the applicable:
1. Laws, rules, and regulations of its country of documentation,
2.Treaties, conventions on international agreements to which that country is a signatory, and
3.Laws of the ports it serves.
According to 46 CFR 298.14, financial assistance will be provided to the vessels or shipyard project if they are economically sound.The following are some of the factors to determine the economic soundness of a shipyard project or a vessel :
1.The market potential for the employment of the Vessel or utilization of the shipyard project of a general shipyard facility over the life of the guarantee;
2.The projected revenues and expenses associated with employment of the vessel or utilization of the shipyard project of a general shipyard facility;
3.The need for technical improvements including but not limited to increased fuel efficiency, or improved safety.
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