Article
New Leasing Accounting Rules May Impact Jones Act Vessel Financing
Article
New Leasing Accounting Rules May Impact Jones Act Vessel Financing
October/November 2016
This article originally appeared in the October/November 2016 issue of Marine Money. Reprinted with permission. Any opinions in this article are not those of Winston & Strawn or its clients; the opinions in this article are the authors’ opinions only.
Because of strict U.S. citizenship requirements, the financing of Jones Act-qualified U.S.-flag vessels has its own peculiarities, including how charters are treated. New lease accounting rules finalized in February 2016 and fully effective in 2019/2020 have the potential to alter when charters of vessels to non-citizens will be permitted. In particular, any company that has employed a long-term time charter in connection with vessel financing should carefully consider the impact of those rules.