small-logo
ProfessionalsCapabilitiesInsights & NewsCareersLocations
About UsAlumniOpportunity & InclusionPro BonoCorporate Social Responsibility
Stay Connected:
facebookinstagramlinkedintwitteryoutube
  1. MaritimeFedWatch

Blog

Historic Jones Act Fine Levied

  • PDFPDF
    • Email
    • LinkedIn
    • Facebook
    • Twitter
    Share this page
  • PDFPDF
    • Email
    • LinkedIn
    • Facebook
    • Twitter
    Share this page

Blog

Historic Jones Act Fine Levied

  • PDFPDF
    • Email
    • LinkedIn
    • Facebook
    • Twitter
    Share this page

1 Min Read

Author

Charlie Papavizas

Related Locations

Washington, DC

Related Topics

Jones Act

Related Capabilities

Maritime & Admiralty

Related Regions

North America

April 5, 2017

Federal law, generally known as the Jones Act and a part of the Merchant Marine Act, 1920, restrict U.S. maritime coastwise trade to qualified U.S.-flag vessels. On April 4, 2017, the U.S. Department of Justice levied the largest known fine in the long history of the Jones Act, namely a $10 million assessment against Furie Operating Alaska LLC.

Furie had shipped the Spartan 151, a jack-up drill rig, from the U.S. Gulf of Mexico to Cook Inlet in Alaska via a foreign-flag heavy lift vessel in 2011. Specifically, the foreign vessel transported the Spartan 151 to Esquimalt, Canada and it was towed from there to Cook Inlet via U.S. coastwise qualified tugs.

Furie had anticipated the renewal of a Jones Act waiver which it had received in 2006. That renewal did not occur, and Furie was sent a Notice of Penalty in the amount of $15 million in October 2011. The various issues associated with the Notice have been before the U.S. District Court for the District of Alaska since 2012.

The Jones Act provides, among other things, that “merchandise” transported in violation of the Act “is liable to seizure by and forfeiture to the Government,” or, in the alternative, a fine may be assessed for the greater of the cost of transportation or the “value of the merchandise” unlawfully transported.

One of the issues in the Furie case was the meaning of the phrase “value of the merchandise.” The value could have been either the book value or insured value of the rig. However, CBP was persuaded to utilize the fair market value of the jack-up drill rig which was the basis for the $15 million Notice of Penalty. CBP did not accept arguments that the fine should be mitigated entirely due to procedural and other defects and ultimately the amount was compromised to $10 million.

Related Professionals

Related Professionals

Charlie Papavizas

Charlie Papavizas

This entry has been created for information and planning purposes. It is not intended to be, nor should it be substituted for, legal advice, which turns on specific facts.

Logo
facebookinstagramlinkedintwitteryoutube

Copyright © 2025. Winston & Strawn LLP

AlumniCorporate Transparency Act Task ForceDEI Compliance Task ForceEqual Rights AmendmentLaw GlossaryThe Oval UpdateWinston MinutePrivacy PolicyCookie PolicyFraud & Scam AlertsNoticesSubscribeAttorney Advertising