Annual Review & Outlook 2013: Cozen O’Connor

Marc J. FincThe maritime industry, and in particular the container segment, is subject to an array of regulatory requirements. This isn’t just the case in the U.S., but worldwide. Regulations pertain to filing requirements for concerted activity by or among vessel operators, compliance with environmental rules, sanctions applicable to trading with certain countries and/or entities, security obligations, cabotage restrictions and documentation requirements. 2013 won’t see any reduction in the nature and volume of regulation of international shipping. At best, it will remain the same. More likely, regulatory burdens will increase. 

In the U.S., a continuation of existing regulations or expansion of regulatory initiatives should be expected, given President Obama’s re-election. Consider the matter of sanctions administered by the Office of Foreign Asset Control put in place against Iran, Syria, Cuba and other countries. The president cited such sanctions as imposing significant burdens on Iran that are helping the U.S. and its allies deal with critical international security issues. The enforcement of these sanctions, which are increasingly being applied extraterritorially, will likely increase. So too will enforcement of the Foreign Corrupt Practices Act.

Similarly, environmental initiatives to address air and water pollution won’t be rolled back in 2013. More likely, we’ll see further efforts by individual states to pursue environmental policies favored by their constituents. Differing state requirements, as opposed to a uniform federal standard, present serious difficulties for the industry.

There’s no reason to expect regulatory burdens outside of the U.S. will decrease. To the contrary, security and environmental concerns are increasing and governmental actions in response should be expected. 

In sum, regulatory compliance in 2013 will likely be harder, not easier.

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