The US Federal Maritime Commission (FMC) has launched a nonadjudicatory investigation into flagging practices.
The purpose is to assess whether the flagging laws, regulations, or practices of certain foreign governments are creating “unfavourable conditions” for the US international maritime trade.
The investigation begins with a 90-day public comment period, ending on 20 August 2025, during which the Commission seeks input from stakeholders across the maritime industry. This includes shipowners, shippers, labour groups, international organisations, and foreign governments.
The FMC is specifically interested in cases where foreign flagging practices may impact the efficiency and reliability of the ocean supply chain or contribute to substandard shipping operations.
The Commission also welcomes suggestions on how reputable registries might reduce compliance burdens and costs without weakening safety or labour standards.
READ: FMC highlights Panama Canal’s importance to US economy
Maritime expert Lars Jensen commented: “The purpose is to see whether flagging laws, or the way they are administered by foreign governments, are creating unfavourable conditions for foreign trade in the US.”
Jensen noted that flag state regimes vary widely between countries and affect not only competition but also “work conditions for seafarers, safety, environmental risks etc.”
He added: “Adding to this is the care, or lack thereof, different flag states place upon enforcing the rules which open opportunities for operating sub-standard vessels, evading taxes (sorry, it is called optimising taxes) as well as abandoning seafarers without pay and evading responsibility when something goes wrong.”
READ: Trump appoints new FMC Chairman
In a notable reference, the FMC’s investigation calls out Malta as an example of a flag of convenience. However, Jensen highlighted a possible inconsistency: “On the Paris MoU’s flag performance list […] the US is ranked lower than Malta. Both are on the white list (not the grey or black).”
Jensen stressed that launching a fact-finding investigation is not controversial in itself, but pointed out a gap in the FMC’s briefing: “What is not mentioned in the 12-page brief is what action, if any, should be taken when (not if) it uncovers unfavourable conditions for the US. That will of course be a political consideration which we will have to await.”
He cautioned that any policy response should be developed in consultation with industry to avoid impractical outcomes, referencing previous issues with trade policy: “It would be beneficial that […] the administration would involve people from the industry in order to avoid unworkable propositions such as the first iteration of USTR301.”
In early February, the FMC gave final approval for the Premier Alliance Agreement to take effect. The agreement allows Hyundai Merchant Marine (HMM), Ocean Network Express (ONE), and Yang Ming to share vessels under a joint service agreement on routes between the United States, Asia, the Middle East, and Europe.
