DHS Extends Jones Act Waiver Again And Adds Substantial Procedural Requirements

Highlights

• The U.S. Department of Homeland Security (DHS) extended the Jones Act waiver first announced in March 2026, allowing certain qualifying goods to move between two U.S. ports on vessels that do not qualify as U.S. vessels under the Merchant Marine Act of 1920.
• The waiver now runs for an additional 90-day period, from August 17, 2026, through November 15, 2026. Covered products must be loaded onboard before 11:59 p.m. ET on November 15, 2026, to qualify.
• The list of potentially covered products has been significantly reduced – from more than 600 Harmonized Tariff Schedule (HTS) codes in April 2026 to 237 HTS codes in August 2026 – removing coal products, numerous chemical compounds and other commodities while retaining petroleum products, liquid natural gas, liquefied petroleum gas, fertilizers and related energy commodities.
• A new pre-voyage authorization process now requires trade community members to submit a "Vessel Availability Request" to the U.S. Department of War (DOW), U.S. Maritime Administration (MARAD) and U.S. Customs and Border Protection before initiating any voyage on a foreign-flag vessel. MARAD will conduct a market survey, and DOW will determine whether the waiver applies to the proposed voyage. Post-voyage reporting requirements remain in effect.

U.S. Customs and Border Protection (CBP) on August 13, 2026, issued Cargo Systems Messaging Service No. 69519766, announcing that the U.S. Department of Homeland Security (DHS) has approved a second extension of the Jones Act waiver originally issued to the U.S. Department of War (DOW) on March 17, 2026. The waiver will be extended for an additional 90-day period commencing on August 17, 2026, at 12 a.m. ET. Importantly, this guidance also introduces substantial new procedural requirements for parties seeking to utilize the waiver. The Jones Act waiver was originally issued on March 17, 2026, by DHS at the request of DOW, pursuant to the national defense waiver authority in 46 U.S.C. § 501(a).

Key Developments

Extended Waiver Period

The Jones Act waiver has been extended for an additional 90-day period. The new waiver period begins on August 17, 2026, at 12 a.m. ET. To be compliant with the extended waiver, CBP has determined that any covered product must be loaded onboard the relevant vessel before the deadline expires at 11:59 p.m. ET on November 15, 2026. For background on the first extension and its documentation requirements, see Holland & Knight's previous alert, "CBP Extends Jones Act Waiver Period, Adds New Documentation Item."

Updated List of Potentially Covered Products

CBP has provided an updated list of potentially covered products as of August 17, 2026, that is significantly narrower than the list published on April 24, 2026 – the number of covered Harmonized Tariff Schedule (HTS) codes has been reduced from more than 600 to 237, representing a reduction of roughly two-thirds of the previously covered products. The removed commodities include coal and coal products, phenols, creosote oils, pitch, carbon black, various halogenated hydrocarbons, cyclic hydrocarbons (such as benzene, toluene, xylene and styrene), methanol, lubricating preparations, greases, solvents, hydraulic fluids, ammonia in aqueous solution, potassium hydroxide and numerous other organic chemical compounds. The current list focuses primarily on petroleum products (crude oil, gasoline, diesel, motor fuel blend stock, naphtha, jet fuel, fuel oils, lubricating oils); liquefied natural gas (LNG); liquefied petroleum gases (LPG) such as propane, butane, ethylene and propylene; natural gas; fertilizers such as urea, ammonium sulfate, ammonium nitrate, phosphates and potassium compounds; soybean oils; ethyl alcohol, including for fuel use; sulfur; phosphorus; nitrogen; anhydrous ammonia; and biodiesel.

Substantial Changes to the Waiver Request Process

Notably, this guidance introduces substantial changes to the waiver request process. Under the new extension, prior to initiating a voyage, any member of the trade community who considers conducting transportation on a foreign-flag vessel between two U.S. ports must now send a written request with the subject line "VESSEL AVAILABILITY REQUEST" to the DOW, MARAD and, for situational awareness only, CBP.

The vessel availability request must include the following information:

• name (including IMO Number) and flag of the vessel
• name of the owner and operator of the vessel (and country)
• name of the carrier
• dates of the voyage
• any relevant ports of call and applicable dates, including place of lading, port of lading, date of lading, place of unlading, port of unlading and date of unlading
• description of the cargo carried, including commodity and relevant HTS code and hazmat code, if applicable, and quantity of the units to be shipped per shipment
• frequency of the shipment
• explanation as to why the voyage is in the interest of national defense
• any other information the Maritime Administrator determines necessary, including but not limited to special shipping or stowage requirements, date of the charterparty, lay days in the charterparty and load date in the charterparty

MARAD Market Survey Process

Upon receipt of a vessel availability request, MARAD will conduct a coastwise-qualified vessel market survey to determine the availability of coastwise-qualified vessels to conduct the proposed transportation. Unless otherwise specified by MARAD, coastwise-qualified vessels must respond to MARAD's market survey within 24 hours advising of their availability to pick up any cargo covered by the waiver within the timeframe specified by MARAD.

MARAD will then provide the results of the survey to DOW, who will determine whether the waiver applies to the inpidual proposed voyage and inform the requesting trade community member, MARAD and CBP whether a foreign-flagged vessel is authorized to conduct the transportation or whether a coastwise-qualified vessel is available and will conduct the transportation. The trade community member who initiated the request will then contact the appropriate carrier(s) to arrange transportation.

CBP Reporting Requirements for Authorized Foreign-Flag Vessels

Carriers operating foreign-flagged vessels that are authorized to transport merchandise coastwise utilizing the waiver must notify CBP via email with the following information:

• vessel name (including IMO Number and flag)
• commodity and relevant HTS code
• carrier
• ports and dates of departure and arrival, including CBP port code
• PDF copy of CBP Form 1302

Post-Voyage Reporting Requirements

In accordance with 46 U.S.C. § 501(c), no later than 10 days after the date of conclusion of the voyage of a foreign-flagged vessel operated under this waiver, the owner or operator of the vessel and the inpidual requesting such waiver (if not the owner or operator of the vessel) must submit a report via email to the Maritime Administrator, including:

• name and flag of the vessel
• name of the owner and operator of the vessel
• dates of the voyage
• any relevant ports of call
• description of the cargo carried
• explanation as to why the waiver was in the interest of national defense
• any other information the Maritime Administrator determines necessary

One of the most notable aspects of the updated waiver process is the requirement that requestors provide an explanation as to why the voyage is in the interest of national defense – both at the pre-voyage request stage and in the post-voyage report to MARAD. This requirement stems from the statutory foundation of Jones Act waivers under 46 U.S.C. § 501, which authorizes the Secretary of War to waive the Jones Act's coastwise trade restrictions when doing so is "necessary in the interest of national defense."

The National Defense Explanation Requirement

The inclusion of this requirement at both stages of the process signals that the government is closely scrutinizing whether inpidual voyages genuinely serve national defense purposes rather than treating the waiver as a blanket authorization for any covered commodity. Trade community members should be prepared to articulate a clear and specific justification linking their proposed transportation to national defense interests. Generic or boilerplate explanations may not suffice, particularly given DOW's role in determining whether the waiver applies to each inpidual proposed voyage.

For the pre-voyage vessel availability request, the explanation should address how the specific cargo and voyage support national defense objectives. For the post-voyage report required under 46 U.S.C. § 501(c), the explanation must confirm that the completed voyage was, in fact, in the interest of national defense. Companies should maintain contemporaneous documentation supporting these explanations and ensure consistency between pre-voyage justifications and post-voyage reports.

Related Tax Implications

Foreign vessels generally may not engage in U.S. interstate commerce, so U.S. federal income tax issues typically do not arise. However, foreign vessels engaged in U.S. foreign commerce may be subject to a gross tax on international income, which is subject to applicable exclusions and treaty exemptions.

However, in light of the extended waiver, the IRS has issued guidance clarifying that income earned by foreign corporations from the operation of vessels transporting cargo between U.S. ports under the Jones Act waiver is not derived from the "international operation of ships" and therefore is not eligible for the gross income exclusion under Internal Revenue Code Section 883 or treaty benefits related to the operation of ships in international traffic. Foreign corporations operating under the waiver must report such income on Form 1120-F (U.S. Income Tax Return of a Foreign Corporation) and should not complete Schedule S (Exclusion of Income from the International Operation of Ships or Aircraft Under Section 883), nor claim treaty benefits related to international shipping on Form 8833.

Takeaways

The new procedural requirements represent a significant shift in how the waiver operates. Unlike the earlier waiver periods, trade community members must now proactively request authorization before initiating a voyage and await a determination from DOW following MARAD's market survey. This process – designed to ensure that coastwise-qualified U.S.-flag vessels are given priority – could add lead time to voyage planning and requires careful coordination among shippers, vessel operators and government agencies. The new restrictions and added procedural requirements included in the new extension likely result from pressure from Jones Act proponents in the U.S. Congress and active Jones Act industrial community and trade associations.

Post-voyage reporting requirements remain in effect: Within 10 days of voyage conclusion, the vessel owner/operator and waiver requestor must submit a detailed report to MARAD, including vessel information, voyage dates, cargo description and an explanation of the national defense interest.

Companies engaged in the transportation of covered products should review the updated list of potentially covered products and HTS codes, ensure compliance with the new vessel availability request process, build in additional lead time for the MARAD market survey and DOW determination, and maintain robust documentation for pre-voyage and post-voyage reporting requirements.