New Developments

There are three recent developments noteworthy to ship­owners, operators and other maritime industry stakeholders.

  1. On June 27, 2011, the U.S. Coast Guard and the Environmental Protection Agency ("EPA") entered into a Memo­randum of Understanding ("MOU") setting forth the terms by which the Coast Guard and EPA will cooperate in connection with compliance and enforcement of MARPOL Annex VI, as implemented in the United States through the Act to Prevent Pollution from Ships ("APPS").
  2. The One Time Permit Report required by the EPA's Vessel General Permit for Discharges Incidental to the Normal Operation of Vessels ("VGP") is due.
  3. The International Maritime Organization's Marine Environ­ment Protection Committee ("MEPC") approved the U.S. Caribbean Emission Control Area ("ECA") at its recently concluded session.

(1) U.S. Coast Guard and EPA Memorandum of Understanding


MARPOL Annex VI sets forth the regulations for the prevention of air pollution from ships. In 2008, MEPC approved amendments to Annex VI, which will reduce emissions of sulfur oxides ("SOx"), nitrogen oxides ("NOx") and particulate matter. See our previous advisory for more information: MARPOL Annex VI Proposed Amendments Move Closer to Implementation. The United States enacted amendments to APPS to implement these changes to Annex VI. Annex VI provides for the designation of ECAs where more stringent emissions standards apply than elsewhere. In 2009, the U.S. and Canada jointly proposed to establish the North American ECA. See our previous advisory for more information: United States and Canada Propose 200 Nautical Mile "Emission Control Area" under MARPOL Annex VI. IMO approved the proposal in 2010 and the North American ECA becomes enforceable in August 2012. On December 22, 2009, EPA issued final regulations implementing the amendments to Annex VI and the North American ECA. See our previous advisory for more information: EPA Finalizes Emissions Standards for Category 3 Marine Diesel Engines and Implements North American ECA. In June, the Coast Guard and EPA formally agreed to cooperate in the implementation of Annex VI and to coordinate interagency compliance enforcement efforts.


Under the MOU, the Coast Guard and EPA agreed to a number of provisions concerning compliance and enforcement actions aimed at installed marine engines, ships, and shoreside facilities that supply marine fuel and/or received ozone depleting substances ("ODS"), which are also regulated under Annex VI. The Coast Guard and EPA agreed to jointly develop protocols for ship examinations, facility inspections, and the conduct of investigations utilizing each agency's expertise.

EPA will develop protocols for installed engine inspections and review of documentation associated with fuel oil quality (Annex VI requires low sulfur fuel) and availability. The Coast Guard will then adapt the EPA protocols into its established ship and facility inspection programs. The two agencies agreed to share information about inspections, examinations and investigations and the EPA further agreed to notify the Coast Guard whenever an Engine International Air Pollution Prevention ("EIAPP") certificate is modified, revoked or otherwise becomes invalid. If either the Coast Guard or EPA determines that an Annex VI violation exists, then it will provide information to the other agency regarding the nature of the violation, the evidence supporting the findings, and the responsible parties. Moreover, the Coast Guard agreed to notify EPA of any ship detentions under Annex VI within the scope of the MOU. This includes foreign-flag ships detained by the Coast Guard under its Port State Control Program, as well as the detention of U.S.-flag vessels by other States.

The MOU spells out a number of specific provisions concerning: (1) ship and engine certification, (2) enforcement on board ships, (3) enforcement on reception facilities, and (4) enforcement of fuel oil availability and quality. EPA has the sole authority to issue, modify, or revoke EIAPP certificates for any applicable engine or part of an applicable engine of a ship. The Coast Guard has the authority to issue, modify or revoke International Air Pollution Prevention ("IAPP") certificates1 for any applicable ship and Certificates of Adequacy for any applicable facility. The APPS authorizes the Coast Guard to conduct ship inspections, examinations, investigations, and to take enforcement actions during both flag State and port State inspections. The MOU provides that the Coast Guard may request that EPA attend or assist with these inspections. Likewise, EPA may request that it be allowed to attend or assist with these inspections. Each agency will make reasonable efforts to comply with these requests. Both agencies have the authority under APPS to inspect reception facilities. The Coast Guard normally conducts these inspections and either agency may request the other to attend or assist.

Both the Coast Guard and EPA have authority and responsibility under APPS for fuel oil quality and availability and the MOU sets forth how that responsibility will be shared. The MOU provides that EPA will verify compliance with fuel oil availability and quality and maintain a register of local fuel oil suppliers, and the Coast Guard will examine bunker delivery notes during its inspections. Each agency may request to attend or assist the other and the Coast Guard will share with EPA any notifications it receives regarding the availability and quality of fuel oil.

The MOU includes specific terms regarding the handling of suspected violations. Each agency will continue to follow its own investigation and enforcement procedures. Each agency may refer a suspected violation to the other agency having the expertise to investigate in prescribed areas as detailed by the MOU.

Any referral should be promptly made within 5 days of the initial detection of a violation, or as soon as practicable thereafter. Where there are multiple suspected violations within the expertise of both agencies, then consultation between both agencies is required. The Coast Guard and EPA must mutually agree on which agency will initiate enforcement action for each suspected violation. If there is no agreement, then the agency initially detecting the violation will take the enforcement action. Each agency will notify the other of any suspected violation and the final resolution of any enforcement proceedings. The Coast Guard and EPA will make their own determination on referrals for criminal prosecution.

The MOU establishes procedures to safeguard confidential business information that may be shared by the agencies. The Coast Guard will be the point of contact for foreign governments through its Port State Control Program. The MOU does not create rights for persons that are not parties to the MOU and does not limit any statutory enforcement rights or authorities for the agencies.

At the same time the MOU was entered into, the EPA and Coast Guard issued a letter to shipowners, ship operators, shipbuilders, marine diesel engine manufacturers, marine fuel suppliers, and other interested parties spelling out the Annex VI requirements. The letter enumerates specific requirements, including: (1) engine and vessel certification; (2) global and ECA sulfur caps and tiered NOx standards; and (3) records that must be maintained onboard the vessel. Those records include EIAPP and IAPP certificates, technical files demonstrating compliance with NOx limits, record books of engine parameters and any changes/adjustments to settings, fuel supplier bunker delivery notes and retained fuel samples. Bunker delivery notes must be retained onboard for 3 years and retained fuel samples must be held for 12 months. Fuel use records, including recording the position of a vessel, are required to demonstrate compliance with the ECA provisions. Violations are subject to civil penalties up to $25,000 for each violation per day. Knowing violations may be referred for criminal prosecution. The letter also references as guidance Coast Guard Policy Letter CG-543 09-01, "Guidelines for Ensuring Compliance with Annex VI to the International Convention for the Prevention of Pollution from Ships (MARPOL) 73/78; Prevention of Air Pollution from Ships".

(2) Vessel General Permit One Time Permit Reports Due


In 2006, after years of litigation, a court ordered EPA to discontinue the exemption from the Clean Water Act's National Pollutant Discharge Elimination System ("NPDES") permitting program, which regulates the discharge of pollutants into U.S. waters, for discharges incidental to the normal operations of a vessel. On December 18, 2008, EPA issued the Vessel General Permit for Discharges Incidental to the Normal Operation of Vessels. The final VGP was reissued in a modified form on February 5, 2009. See our previous advisories on the VGP for more information: THIS IS NOT A DRILL! EPA to Implement Vessel General Permit for Discharges "Incidental to the Normal Operation of a Vessel" in a Few Days; TWIC and EPA's VGP: An Update on These Now (Hopefully) Common Acronyms; EPA's Vessel General Permit—Are You In Compliance?.

The VGP applies to discharges incidental to normal operation of all vessels, with certain exemptions. Recreational vessels are not subject to the permit and all commercial fishing vessels and non-recreational vessels less than 79 feet long are also not subject to the VGP. However, those vessels are covered by the VGP for any ballast water discharges. For all vessels greater than or equal to 300 gross tons or having the capacity to hold or discharge more than 8 cubic meters of ballast water, vessel owners/operators must submit (or must have submitted) a Notice of Intent ("NOI") to be covered by the VGP. For vessels less than or equal to 300 gross tons or vessels not having the capacity to hold or discharge more than 8 cubic meters of ballast water, owners/operators were not required to submit NOIs, but rather are automatically covered under the VGP. One of the requirements of the VGP is to submit a One Time Permit Report.

VGP One Time Permit Reports Due

The One Time Permit Report required by the VGP is due between June 19, 2011 and December 19, 2011. Section 4.4.4 of the VGP requires vessel owners/operators to submit a one-time report between 30 months and 36 months after obtaining coverage under the permit. These reports are due from any owner/operator covered by the permit, i.e., whether they submitted an NOI or whether automatically covered by the VGP. EPA wants to collect the information contained in the one-time reports to assist it in developing the next version of the VGP. The current VGP expires at midnight December 19, 2013.

The one-time report must be submitted by the party with operational control over vessel activities or that has "day-to-day operational control over those activities that are necessary to ensure compliance with the permit or to direct workers to carry out activities required to comply with the permit." The template for the report is found in Part 13 of the VGP, Appendix H, and also on EPA's web site. See: The report includes owner/operator and vessel identification sections, a certification section and six yes/no questions. The questions are as follows:

  1. have all monitoring conditions and visual inspection requirements been completed;
  2. have any corrective actions been necessary;
  3. have any modifications or the installation of new equipment been made for the purpose of meeting any VGP requirement;
  4. have any standard operating procedures been modified for the purpose of meeting any VGP condition or limitation;
  5. has all environmental training required under the permit been conducted; and
  6. have there been undue delays in operations of the vessel directly related to complying with the requirements of the VGP?

EPA is developing an electronic system for submittal of the VGP One Time Permit Report and is strongly recommending that vessel owners/operators submit reports electronically rather than on paper. However, technical problems have delayed the release of the electronic report system and it is unavailable as of the publishing of this advisory.

(3) MEPC 62 Approves U.S. Caribbean Emission Control Area


MARPOL Annex VI includes a provision for the establishment of ECAs where the adoption of special mandatory measures is required to reduce NOx, SOx and particulate emissions from ships. Establishment of ECAs can aid States in meeting health based air quality standards in coastal areas. As discussed above, IMO approved in 2010 a North American ECA, which becomes enforceable in August 2012. The North American ECA covers U.S. Atlantic and Pacific coastal areas, as well the area around the Hawaiian Islands. Subsequent to proposing the North American ECA, the U.S. proposed a U.S. Caribbean ECA.

MEPC Approval of U.S. Caribbean ECA

In June 2010, the United States submitted a "Proposal to Designate an Emission Control Area for the Commonwealth of Puerto Rico and the United States Virgin Islands for Nitrogen Oxides, Sulphur Oxides and Particulate Matter" to MEPC for consideration at its 61st session beginning September 27, 2010. As noted in the proposal, the islands' economies are very dependent on marine transportation and ship emissions are significant contributors to the Territories' emission inventories.

The U.S. Caribbean ECA includes waters adjacent to coasts of the Commonwealth of Puerto Rico and the U.S. Virgin Islands, up to approximately 50 nautical miles from the territorial sea baselines of the islands. The ECA is bounded such that it does not extend into marine areas subject to the sovereignty, sovereign rights, or jurisdiction of any State other than the United States.

MEPC 61 approved the proposal last year. The proposal was formally adopted as an amendment to Annex VI during the MPEC 62nd session in London held July 11-15, 2011. The amendment designating the U.S. Caribbean ECA is expected to enter into force on January 1, 2013 and will become enforceable in January 2014.


Shipowners/operators, shipbuilders, marine diesel engine manufacturers, marine fuel suppliers, and other maritime industry stakeholders should review the Coast Guard and EPA MOU and pertinent regulations and guidance to assure compliance with Annex VI and APPS. Owners/operators of vessels covered by the EPA VGP should prepare their One Time Permit Reports once EPA's electronic form is functional or otherwise submit a paper report with delivery confirmation. In any event, owners/operators must submit the report no later than December 19, 2011. Shipping industry stakeholders should also continue monitor the entry into force and effectiveness of the U.S. Caribbean ECA and take measures to comply with the more stringent NOx limits and fuel oil sulfur limits that will apply in 2014.