What is Piracy?BY JOHN D. KIMBALL AND DEEPA PADMANABHA

Two United States district judges in theEastern Di strict ofVir ginia handling near -ly iden tical criminalcharges against accus -ed Somali pirates havedisagreed on whatacts constitute piracy.

The cases involve separate armed attacks on United StatesNavy ships, the USS Ashland and the USS Nicholas. In bothcases, accused Somali pirates fired at the vessels, but wereunsuccessful in capturing them. Instead, the accused pirateswere captured and brought to Virginia to stand trial on numer-ous criminal charges, including piracy. In both cases, defensecounsel moved to dismiss the piracy count of the indictmentson the grounds that merely shooting at the vessels was not,in itself, an act of piracy.

In a decision issued in August 2010, Judge RaymondJackson dismissed the piracy count, holding that underUnited States law, merely shooting at a vessel is not piracy.1 Ina more recent opinion issued on October 29, 2010, however,Judge Mark Davis disagreed and denied defendants’ motionbased on his interpretation of the definition of piracy underthe law of nations.2 Judge Davis held that, as a matter of law,attacking a vessel is piracy even if the vessel and crew arenot captured.

Judge Jackson’s decision is now on appeal to the FourthCircuit and the trial of the accused pirates on other chargeshas been deferred pending the appeal. The decision byJudge Davis led to the first piracy conviction in almost 200years.3 The convicted pirates, however, no doubt will appealto the Fourth Circuit.

A Place for CustomaryInternational Law in U.S. Courts?

Judge Jackson and Judge Davis’ different rulings turn ontheir disagreement about the definition of piracy. But theirconflicting interpretations also bring up a larger questionabout the role of customary international law in U.S. courts.While both judges acknowledged the evolving nature of cus-tomary international law, they reached different conclusionsabout how this changing body of law impacts the crime ofpiracy in U.S. courts.

Judge Jackson held that the changing nature of custom-ary international law demonstrates the unsettled definitionof piracy in the international sphere. Judge Jackson focusedhis opinion on the Supreme Court’s definition of piracyunder 18 U.S.C. § 1651 as announced in the 1820Supreme Court case of United States v. Smith. According tohis interpretation of the case, the Supreme Court explicitly

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CONTENTSPAGE

What is Piracy? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Notes From The Editor: Another Year . . . . . . . . . . . . . . . . . .3

A Look Over the Horizon: Oil Spill Legislation . . . . . . . . . .3

No End to Rough Seas for Iran as Sanctions . . . . . . . . . . . .6Pressure Continues to Build

Maritime Responder Obligations and Liability . . . . . . . . . . .9

President Obama Announces a New OceanPolicy and Framework for Mapping the EEZ . . . . . . . . . . .11

© 2010, BLANK ROME LLP. Notice: The purpose of this newsletter is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized fromvarious sources, the accuracy and completeness of which cannot be assured. The Advisory should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel. Additionalinformation on Blank Rome may be found on our website www.blankrome.com.

Watergate • 600 New Hampshire Ave., NW • Washington, DC 20037 • 202.772.5800

MAINBRACEMAINBRACE www.BlankRomeMaritime.com

December 2010 No. 4

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(continued on page 2)

development, ports and harbors, recreational fishing, militaryactivities, subsistence uses, and tourism, among others. TheAdministration takes the position that existing laws permitthem to create a national system of CMSPs without specify-ing those authorities.

The geographic scope of the planning area includes theU.S. territorial sea, the 200-mile Exclusive Economic Zone,and the Continental Shelf. The planning area would extendgenerally landward to the mean high-water line, but uplandsmay also be included. In the Great Lakes, the boundarywould extend from the ordinary high-water mark andinclude the lakebed, subsoil, and water column to the limitof the U.S. and Canadian international boundary.

The nation is divided into nine regions(and corresponding states) for purposesof developing the CMSPs:

1. Alaska/Arctic Region:Alaska

2. Caribbean Region:Puerto Rico and U.S. Virgin Islands

3. Great Lakes Region:Illinois, Indiana,Michigan, Minnesota,New York, Ohio,Pennsylvania, andWisconsin

4. Gulf of Mexico Region:Alabama, Florida,Louisiana, Mississippi, andTexas

5. Mid-Atlantic Region: Delaware,Maryland, New Jersey, New York,Pennsylvania*, and Virginia

6. Northeast Region: Connecticut, Maine,Massachusetts, New Hampshire, Rhode Island, andVermont

7. Pacific Islands Region: Hawaii, Commonwealth ofthe Northern Mariana Islands, American Samoa, andGuam

8. South Atlantic Region: Florida, Georgia, NorthCarolina, and South Carolina

9. West Coast Region: California, Oregon, andWashington

* Pennsylvania is included twice because it is both acoastal and Great Lakes state.

Padmanabha@BlankRome.com

JOHN D. KIMBALLPARTNER

Kimball@BlankRome.com

The CMSPs are to be submitted to the Council forreview of their consistency with the National Ocean Policy.Following a 30-day public comment period, the Councilwould certify each plan, and Federal, State, and Tribal repre-sentatives would co-sign the plan and agree to implement it,consistent with existing laws and regulations.

The first CMSP is expected to be submitted to theCouncil for certification in two years, with all plans submittedand certified by mid-2015. An inter-agency working group iscurrently designing a National Coastal and Marine SpatialPlanning Workshop.

Conclusions and Next StepsThe success of the new Ocean Policywill depend on the success of the

coastal and marine spatial plan-ning process. This will

depend, in turn, on the will-ingness of state, local,

and tribal governmentsto participate and com-mit to a joint decision-making process forpermitting marineactivities, as well asthe resources that therespective govern-

ments can commit tothe process. The plans

are not expected to super-sede existing laws on which

governments base their deci-sions. But, if adopted and certified,

they may provide a useful, even pre-dictable, road map for future offshore develop-

ment, including, wind, renewable energy, transportation,commercial and recreational fisheries, etc.

Commercial and recreational users of the marine envi-ronment are encouraged to participate in regional advisorycommittees and attend the CMSP Workshop so that theirrespective maritime interests are not adversely affected.

Implementation of E.O. 13366 can be followed atwww.whitehouse.gov/oceans. n

DEEPA PADMANABHAASSOCIATE

New Ocean Policy (continued from page 11)

Due Process IssuesIn addition to conflicting views about the role of custom-

ary international law in defining piracy in U.S. courts, JudgeJackson and Judge Davis also reached different conclusionsabout potential due process implications. Both judgesaddressed the issue of whether a law that changes over timeis by nature unconstitutionally vague. According to JudgeJackson, if the court were to allow the definition of piracy toevolve over time, individuals “would be required to constantlyguess” what conduct constitutes piracy under § 1651. This“guessing” would not provide a potential defendant withadequate notice of whether certain conduct violates thestatute. Judge Jackson noted that this concern is heightenedunder the present circumstances, where liability under thestatute carries a mandatory life sentence.

On the other hand, Judge Davis found that the very factthat § 1651 incorporates the definition of piracy under thelaw of nations provides potential defendants with notice ofwhat conduct constitutes piracy. Individuals have fair warningthat piracy is defined by the internationally accepted normsand standards captured in UNCLOS.

All concerned await the Fourth Circuit’s ruling with greatinterest. n

1. United States v. Said, 2010 U.S. Dist. LEXIS 106050, No. 10-cr-00057(E.D.Va. Aug. 17, 2010).

2. United States v. Hasan, 2010 U.S. Dist. LEXIS 115746, No. 10-cr-0056(E.D.Va. Oct. 29, 2010). This decision has led to the first U.S. piracy trialin almost 150 years. The last piracy case tried in a U.S. court was UnitedStates v. Baker, 24 F. Cas. 962 (C.C.S.D.N.Y. 1861).

3. The last piracy conviction in a U.S. court was United States v. Smith, 18U.S. 153 (1820).

defined piracy under the law of nations as robbery or“forcible depredation” on the sea. Judge Jackson also reiter-ated the government’s failure to provide any concrete examples as to when a U.S. court has accepted a moreexpansive definition of piracy than Smith.

Judge Davis also relied on Smith, but reached a differ-ent conclusion about the definition of piracy. In contrast toJudge Jackson, Judge Davis construed the Smith case asleaving open the possibility of a more expansive definition ofpiracy. While Smith was “a classic case of piracy” involvingrobbery, Judge Davis explained there is no evidence theSmith court intended to announce an exhaustive definitionof piracy. In his view, by incorporating the definition of piracyunder the law of nations, the drafters of 18 U.S.C. § 1651contemplated an evolving definition of the crime of piracy.

Analyzing the language of § 1651, Judge Davis empha-sized that the statute explicitly incorporates the definition of“piracy as defined by the law of nations.” The “law ofnations,” or customary international law, is widely acceptedas a changing body of law determined by international con-sensus. In considering sources of customary internationallaw, Judge Davis looked to the definition of piracy set forthin the United Nations Convention on the Law of the Sea(“UNCLOS”). With 161 state signatories and internationalacceptance, Judge Davis reasoned that UNCLOS exemplifiescustomary international law. Under UNCLOS, “any illegal actof violence or detention” against another ship, committedfor private ends on the high seas, constitutes piracy.

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What is Piracy? (continued from page 1)

President Obama Announces a New OceanPolicy and Framework for Mapping the EEZBY JOAN M. BONDAREFF

On July 19, 2010, PresidentObama issued an Executive Order(E.O. 13366) establishing a newOcean Policy Council and new OceanPolicy for the United States, and at thesame time, released a final reportelaborating on the Policy and creatinga comprehensive regional structureand process for Coastal and Marine

Spatial Planning. The Policy is the result of a one-year inter-agency study and public comment period. TheAdministration expects draft Coastal and Marine SpatialPlans (“CMSPs”) to be submitted in two years and becomeeffective by 2015. Stakeholders will be involved at theregional planning level.

New Ocean PolicyThe new National Ocean Policy announced by the

President includes the following statement of goals: • protect, maintain, and restore the health and biologi-

cal diversity of ocean, coastal, and Great Lakes eco-systems and resources;

• improve the resiliency of the aforementionedcommunities;

• bolster the conservation and sustainable uses of landto improve the aforementioned ecosystems;

• use the best available science to inform decisions, andenhance humanity’s capacity to respond to a changingglobal environment;

claim is committed to paper. A claimant’s lawyer had an obli-gation to make sure his allegations were well-founded tobegin with and finds himself in an embarrassing position toexplain the retraction of the claim to the court and his client.

Clearly, the maritime law has seen fit to motivate and,under certain circumstances, even to compel mariners tocome to the aid of others in distress at sea. No such obliga-tion exists if the responder would be putting his own crew,passengers, or vessel in serious danger. But, liability willensue and salvage awards could be lost or diminished if theresponder/salvor does not undertake the assistance effort ina reasonable and seaman-like manner. n

This article originally appeared in the November2010 edition of Maritime Reporter. Reprinted with per-mission from Maritime Reporter.

JOAN M. BONDAREFFOF COUNSEL

Bondareff@BlankRome.com

• support sustainable uses of the ocean, coasts, andGreat Lakes;

• respect and preserve our Nation’s maritime heritage;• respect international law, including preservation of

navigational rights and freedoms;• increase scientific understanding of the above eco -

systems;• improve our understanding of changing environmen-

tal conditions, trends, and their causes; and• foster a public understanding of the value of the

ocean, our coasts, and the Great Lakes.While balanced development is promoted, the new pol-

icy encourages all permitting decisions to be based on the“precautionary principle” (of the Rio Conference).

National Ocean CouncilAs part of the President’s announcement, he also created

a new inter-agency National Ocean Council (“Council”). TheCouncil will be co-chaired by Nancy Sutley, the Chair of theWhite House Council on Environmental Quality and John P.Holdren, the Director of the White House Office of Scienceand Technology Policy. Other members of the Councilinclude the Secretaries of Agriculture, Commerce, Defense,Energy, Health and Human Services, Homeland Security,the Interior, State, Transportation, Justice and Labor; theAdministrators of the Environmental Protection Agency, theNational Oceanic and Atmospheric Administration, and theNational Aeronautics and Space Administration; theChairman of the Joint Chiefs of Staff; the Director of theNational Science Foundation; and assorted White Houseenvironment and energy czars.

The role of the new Council is to oversee the implemen-tation of the Ocean Policy, above, through the development ofstrategic action plans; facilitation and implementation ofCMSPs, described below; and coordination of an annualbudget establishing ocean priorities for Federal agency mem-bers of the Council.

The Council has convened and sent nomination requestletters to state and tribal officials to select the 18 membersof a new Governance Coordinating Committee.

Marine Spatial Planning–Zoning in the EEZ?The guts of the final report is to create a system of

regional CMSPs, surrounding all coasts of the U.S., its territo-ries, and Great Lakes, for the purpose of permitting uses ofthose waters, and resolving conflicts among overlapping andsignificant uses of the marine environment, including aqua-culture, commerce and transportation, commercial fishing,marine sanctuaries, mining, oil and gas exploration and

(continued on page 12)

A Look Over the Horizon: Oil Spill Legislation BY DUNCAN C. SMITH AND JONATHAN K. WALDRON

Congress wasextremely busy withproposed spill legis-lation during thesummer of 2010 asa result of the Deep -water Horizon oilspill (“DHOS”) inci-dent. In this regard,

the House passed H.R. 3534, the Consolidated Land,Energy, and Aquatic Resources Act of 2009 (the “CLEARAct”). Among other things, this bill would repeal limits of lia-bility, increase the minimum level of financial responsibilityfor an offshore facility to $1.5 billion, authorize recovery fornon-pecuniary damages and human health injuries, andsubstantially revise the oil spill response planning and safe-ty regimes for vessels and facilities. It also has numerous provisions related to oil and gas activities offshore, including

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Here we are, once again, almostthrough another year. Is it just me, ordon’t they seem to pass with alarmingspeed?

Quite a lot happened this year tomake it memorable, but in the U.S.maritime world it would be difficult totop the Deepwater Horizon oil spilldisaster for newsworthiness. The litiga-

tion has only just begun and promises to stretch on in itsmany phases for years to come. And though Congress gotoff to an almost frighteningly quick start on new oil spill leg-islation, as Jonathan K. Waldron and Duncan C. Smithreport in this issue of Mainbrace (see “A Look Over theHorizon: Oil Spill Legislation” on page 3), those effortsappear to have bogged down since the elections. So, itseems safe to say that this is an issue that will occupymuch of our time and attention in 2011—and probablywell beyond. Additionally, as Jeffrey S. Moller notes in hisarticle (see “Maritime Responder Obligations and Liability”on page 9), issues of responder liability come to the fore-front in these events.

The issues surrounding the modern surge of piracy didnot get any easier this year and, as John D. Kimball andDeepa Padmanabha report (see “What is Piracy?” on page1), in late November 2010 the United States courts sawtheir first piracy conviction in almost 200 years. Sanctionsand foreign asset control also remain critical and anxiety-producing topics and, as Barbara D. Linney, Kelly Lougheryand Kevin J. Miller report (see “No End to Rough Seas forIran as Sanctions Pressure Continues to Build” on page 6),the new efforts at Iran sanctions in the United States andthe European Union are causing significant confusion andconcern in the shipping world. And meanwhile, as Joan M.Bondareff reports (see “President Obama Announces aNew Ocean Policy and Framework for Mapping the EEZ” onpage 11), the U.S. Government continues its perennialeffort to organize and manage our coastal resources.

Add to these issues the shipping market gyrations, cor-porate and national debt issues, and political instability invarious places around the world, and it is clear that wemust all stay on our toes for 2011. But if it were easy,everybody would be doing it, wouldn’t they?

Here’s to a happy, healthy, and prosperous 2011!

(continued on page 4)

reorganizing the Minerals Management Service as well as off-shore safety, environmental, and financial reform.

Although the Senate failed to pass a bill, it consolidatedproposed oil spill legislation into S. 3663, the Clean EnergyJobs and Oil Spill Accountability Plan, which was introducedby Senator Reid on July 28, 2010. However, this legislationcontained too much controversy related to unlimited liabilitylanguage, thereby causing both Senator Begich (D-Alaska)and Senator Landrieu (D-Louisiana) to introduce separatemeasures intended to hold oil companies accountable—without placing a burden on taxpayers and shutting smallercompanies out—from operating offshore. No further actionhas been taken on S. 3663 since then.

Putting aside the efforts of Congress to pass oil spill leg-islation as a result of the DHOS incident, significant oil spilllegislation was enacted as part of the Coast GuardAuthorization Act of 2010 (the “Authorization Act”) enactedin October this year. The following is a summary of the keypollution-related provisions of the House and SenateDeepwater Horizon legislation, as well as the oil spill legisla-tion enacted by Congress pursuant to the Authorization Act.

vessel, enhanced wreck removal expenses, and expensesresulting from enhanced or aggravated pollution.

As mentioned above, the Federal Water Pollution ControlAct, as amended by OPA 90, contains a specific provisionproviding immunity to oil spill clean-up contractors and otherresponders. Under the terms of that statute, it is clear thatunless a responder causes damage by virtue of its grossnegligence or willful misconduct, it should not be heldliable for penalties or pollution damages.

The naturally occurring questions are “what is negligence,what is gross negligence, and what is the difference?” Inpractice, unfortunately, the difference between plain negli-gence and gross negligence, however they may be defined,never gave a claimant’s attorney much pause. If the facts ofthe case are such that extra harm was somehow actuallycaused by the activities of the responder, the responder islikely to be sued. The responder would end up incurringattorney’s fees and its underwriters/insurers would be pres-sured for settlement based upon the risk that a judge mightconsider the responder’s conduct to have risen to a degreeof negligence sufficient to overwhelm the immunity. Suchhas occurred in the Deepwater Horizon situation where oneof BP’s primary contracted response companies found itselfsued by numerous claimants despite the immunity providedby the terms of OPA. It has taken some amount of legaleffort and expense to establish to the satisfaction ofclaimant’s counsel that there was no gross negligenceinvolved in that contractor’s operations, and some claimantshave not yet been convinced. It is in the nature of law prac-tice for there to be a good deal of inertia established once a

liabilities of responders. The ancient maritime codes providedmotivation for strangers to render assistance to vessels indanger at sea by allowing them to sue for an award of someappropriate percentage of the value of the property saved.So-called “pure” salvage requires not only that the salvageeffort be successful, but that it be undertaken on a strictlyvoluntary basis. The law is clear, however, that the moral orlegal obligation to render assistance to persons in peril at seadoes not make a salvor’s efforts non-voluntary. In otherwords, those who act under compulsion of the federalstatutes are deemed to be volunteers in regards to salvageunless there is some other particular legal or contractualduty that pre-existed, such as the duty of a master to takecare of his own crewmen or passengers or the duty of a tow-ing contractor to safeguard a vessel being towed. A salvagecontract, such as the famous Lloyd’s Open Form, obviouslydoes not nullify the right to collect a salvage award, butmerely supplants the voluntary element with an agreementbetween the parties. Once again, however, a salvor has anobligation to render assistance in a reasonable seaman-likemanner or risk liability for harm caused by his efforts.

Salvage decisions have taken into account any damagecaused by the salvor’s efforts in determining the nature orthe extent of an award. An admiralty court has broad discre-tion within certain recognized parameters to determine thesize of an award and to therefore either diminish or do awayentirely with the right to an award depending upon theextent of harm caused by the salvor and the degree of hisnegligence. The types of damages that could be awardedagainst a negligent salvor would include excess harm to the

THOMAS H. BELKNAP, JR.PARTNER

TBelknap@BlankRome.com

DUNCAN C. SMITHPARTNER

Smith-D@BlankRome.com

Tom Belknap TBelknap@BlankRome.com

Jeanne Grasso Grasso@BlankRome.com

Jeremy Harwood JHarwood@BlankRome.com

John Kimball JKimball@BlankRome.com

Greg Linsin Linsin@BlankRome.com

Peter Mills PMills@BlankRome.com

Jeff Moller Moller@BlankRome.com

Richard Singleton RSingleton@BlankRome.com

Duncan Smith Smith-D@BlankRome.com

Jon Waldron Waldron@BlankRome.com

Alan Weigel AWeigel@BlankRome.com

Washington, DC +1.202.772.5800

New York +1.212.885.5000

Philadelphia +1.215.569.5500

Asia +852.3528.8300

In the event of an incident, please contact any member of our team:

JONATHAN K. WALDRONPARTNER

Waldron@BlankRome.com

Notes From The Editor: Another YearBY THOMAS H. BELKNAP, JR.

Maritime Responder (continued from page 9)

Maritime Responder Obligations andLiability

BY JEFFREY S. MOLLER

During the U.S. Maritime Law Asso -ciation’s Houston-based meeting inOctober 2010, an important item dis-cussed was the liability and/or immu-nity of oil spill response contractors.One driver for the discussion was thefact that several such contractors havefound themselves targets for claims

brought by individuals, businesses, and municipalities affectedby the Deepwater Horizon spill. That question is governedquite directly by the terms of the Federal Water PollutionControl Act, as amended by the Oil Pollution Act of 1990.But there are other federal statutes and general maritimelaw decisions that bear upon the issues of theduty to respond to maritime casualties and thepotential liability exposure for such responders.

Mariners have long understood that a moral,if not legal, obligation is upon them to renderassistance to persons in peril at sea. The generalrubric is that the master or person in charge of avessel is obliged to assist others in danger unlessrendering such assistance would place his ownvessel, crew, or passengers in serious danger. Thisnotion was ultimately placed into positive federallaw by Congress, and is now found at 46 U.S.C.§2304(a). The statute sets up a criminal penaltyof $1,000 or imprisonment for as long as twoyears for its violation. The duty does not extend tosaving property, but to saving “any individualfound at sea in danger of being lost.” A compan-ion statute pertains to the obligation of master or individualin charge of a vessel that has been involved in a marinecasualty. 46 U.S.C. §2303. Again, the obligation is phrased interms of rendering assistance to “each individual” affectedby the marine casualty. A criminal penalty of similar sizeapplies and the vessel is potentially liable in rem to the U.S.Government for the fine. Interestingly, Section 2304 con-tains an exception for vessels of war or vessels owned by theU.S. Government dedicated to public service. Therefore, U.S.Naval or Coast Guard vessels are obliged to render assis-tance to individuals only when the U.S. vessel has beeninvolved in a marine casualty that put the individuals at risk.(Other general maritime law rules and statutes apply to theCoast Guard’s obligation to undertake search and rescue mis-sions, of course, there being a well- recognized rule known asthe “discretionary function” doctrine.)

Key House Provisions in the CLEAR Act (H. 3534)Section 220: Manning and Buy and Build American

Requirements: would apply U.S. immigration laws offshore,which would have the practical effect of requiring foreignworkers to obtain a capped number of H2-B visas to workoffshore.

Section 702: Repeal of and Adjustments to Limitationon Liability: would apply retroactively to the DHOS and requiresagency review every three years.

Section 703: Evidence of Financial Responsibility: wouldincrease the required demonstrations of financial responsibilityfor offshore facilities unless the President determines thatlower amounts may be required. Also requires review and revi-sion upward every three years.

Section 704: Damages to Human Health: would add“damages to human health” as compensable under OPA 90.

Section 708: OPA 90 Amendments and Clarifications:would add “costs of federal enforcement activities” to thedefinition of removal costs under OPA 90.

Section 709: Americanization of Offshore Operations inthe Exclusive Economic Zone: would require that all vesselsinvolved in offshore-related activities be U.S.-flagged (and thus

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U.S.-crewed) and 75% U.S.-owned effective after July 1,2011. Apparently applies to alternative energy projects, ligh-tering operations, and freight carriage within the EEZ.

Section 714: Repeal of Response Plan Waiver: wouldrepeal the current waiver authority to operate without anapproved oil spill response plan.

Section 717: Evaluation and Approval of ResponsePlans; Maximum Penalties: would require public notice andcomment on response plans and increases the civil penaltiesavailable for oil spills, including retroactively for the DHOS.

Section 719: Implementation of Oil Spill Preventionand Response Authorities: would require agencies to developand maintain the internal operational capability to respond,and the Coast Guard to have sufficient personnel andresources to act as a first responder.

Section 724: Clarification of Memorandums of Under -standing: would require federal agencies to clarify the rolesand jurisdictional responsibilities relating to the prevention ofoil discharges.

Section 725: Build America Requirement for OffshoreFacilities: would require any offshore facility (including aMobile Offshore Drilling Unit) to be built in the United Stateswith a waiver for facilities: (1) under contract on the date ofenactment, (2) non-availability, or (3) an emergency.

The law mandates that those who render assistancemust exercise reasonable care and acceptable seamanshipin doing so, or else suffer liability for the aggravation orexcess harm that they cause to the individuals or property.One of the two federal statutes cited above contains a specific “Good Samaritan” provision, which provides thatthose who render assistance shall not be found liable for thedamage caused by their efforts unless they have failed toexercise reasonable care. The immunity provided by such alaw is illusory, in my estimation, because the general mar-itime law would never impose liability upon any personunless they either breached some contractual obligation orwere determined to have been negligent.

The so-called “discretionary function” doctrine applicableto government activities alluded to above contains a similarcorollary rule. In other words, if the government decides inthe exercise of its discretion to take on a function such as

rendering assistance to individuals or property, that agencyis obliged to exercise good seamanship and act as would areasonably prudent person under similar circumstances.Numerous reported cases exist in which the Coast Guard hasbeen sued for negligently causing personal injury or propertydamage during the course of their rescue operations.

There are some cases that have determined that ratherthan a “reasonable seaman” or simple negligence standard,maritime law requires proof of gross negligence or willfulmisconduct in order to render a responder liable for conse-quent harm. But the language of 46 U.S.C. §2303(c) wouldseem to have contradicted that—at least, within its jurisdic-tional sphere of influence.

Some readers may recognize an interplay between thelaw of salvage and the rules regarding the obligations and

JEFFREY S. MOLLERPARTNER

Moller@BlankRome.com

Aerial view of the Deepwater Horizon spill

Oil Spill Legislation (continued from page 3)

(continued on page 10)

Section 731: Extension of Liability to Persons HavingOwnership Interests in Responsible Parties: would extendthe definition of a Responsible Party under OPA 90 toany person having more than a 25% ownership interest ina vessel or facility retroactive to January 1, 2010.

Key Senate Provisions in the Clean Energy Jobs andOil Spill Accountability Act (S. 3663)

Section 102: Removal of Limits of Liability for OffshoreFacilities: would eliminate the current $75 million cap on theliability limitation on liability for damages.

Section 104: Oil and Hazardous Substance ResponsePlanning: would specify additional requirements for oil spillresponse plans (i.e., response to a loss of well control methods and equipment technologically feasible, and priorassessment of potential impacts to ecologically-sensitiveareas). Publishes the response plan in the Federal Registerand provides a 30-day comment period.

Section 502: Repeal of Limitation of Shipowners’Liability Act of 1851: would mandate that the Owner of avessel could no longer limit liability for all claims for personalinjury or death.

Section 503: Assessment of Punitive Damages inMaritime Law: would overrule Exxon Shipping Co. v. Baker(i.e., a 1-to-1 test) and allows for unlimited punitive dam-ages to be awarded by a court.

Section 504: Amendments to the Death on the HighSeas Act: would amend the Death on the High Seas Act toenhance remedies for wrongful death.

Section 624: Oil Spill Evaluation Technology: wouldrequire programs and processes for the formal submission,evaluation, and validation of oil spill containment andremoval methods and technologies.

Section 625: Coast Guard Inspections: would mandateimprovements in the frequency and comprehensiveness ofCoast Guard safety inspections and structured verification forall U.S. and foreign-flag tank vessels.

Section 626: Certificate of Inspection Requirements:would require a certificate of inspection in accordance withthe highest relevant classification, certification, rating, andinspection standards.

Section 630: Vessel Liability: would increase the limitsof liabilities for all tank vessels.

Key Oil Spill Provisions Contained in the CoastGuard Authorization Act of 2010

Although Deepwater Horizon-related spill legislationwas not enacted before Congress recessed prior to theNovember elections, significant oil spill provisions were

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(continued on page 6)

included in Coast Guard Authorization Act that was signedinto law by the President on October 15, 2010. The key oilspill-related measures are listed below.

Section 701: Rulemakings: requires the Coast Guard toprovide a report to Congress within 90 days on the status ofall Coast Guard rulemakings required or being developed. Inaddition, requires the Secretary to issue a notice of proposedrulemaking regarding inspection requirements for towing ves-sels within 90 days of enactment of the Authorization Act.

Section 702: Oil Transfers from Vessels: requires theCoast Guard to promulgate regulations to reduce the risks ofoil spills involving the transfer of oil from or to a tank vessel.

Section 703: Improvements to Reduce Human Errorand Near Miss Incidents: requires the Coast Guard to reportto Congress on human errors that could cause oils spills,including the most frequent types of near-miss oil spill inci-dents involving vessels address errors and knowledge gaps.

Section 704: Olympic Coast National Marine Sanctuary:requires the Coast Guard to revise this area to be avoidedoff the coast of the State of Washington for certain restric-tions to apply to specified vessels.

Section 705: Prevention of Small Oil Spills: authorizes a$10 million oil spill prevention and education program to beestablished by the Under Secretary of Commerce for Oceansand Atmosphere in consultation with the Coast Guard.

Section 706: Improved Coordination with Tribal Govern -ments: requires the Coast Guard to complete the develop-ment of a tribal consultation policy that recognizes and protects tribal treaty rights and trust assets.

Section 707: Report on Availability of Technology toDetect the Loss of Oil: requires the Coast Guard to submit areport to Congress on the availability, feasibility, and poten-tial cost of technology to detect the loss of oil carried ascargo or as fuel on vessels greater than 400 gross tons.

Section 708: Use of Oil Spill Liability Trust Fund: providesno more than $15 million each fiscal year for expensesincurred by, and activities relates to, response and damageassessment capabilities of the National Oceanic andAtmospheric Administration.

Section 709: International Efforts on Enforcement:requires the Coast Guard, in consultation with other agen-cies, to pursue stronger enforcement of agreements relatedto oil discharges.

Section 710: Higher Volume Port Area RegulatoryDefinition Change: requires the Coast Guard to modify thedefinition of “higher volume port area” by replacing “PortAngeles, WA” with “Cape Flattery, WA.”

designated as off-limits during the pendency of the transaction.As for Iran, despite its denials there is mounting

evidence that the sanctions are having an impact. The U.S.Department of State recently announced that it has receivedcommitments from four international energy firms to termi-nate their investments and avoid any new activity in Iran’senergy sector (see “Safe Harbor”), and the shrinking insur-ance market has spawned the first general license underOFAC’s proliferation sanctions program, authorizing trans -actions related to the arrest, detention, and judicial sale ofIRISL vessels seized for violation of the governing loanagreements due to IRISL’s failure to provide the requisiteinsurance for the vessels. Even more telling, early Decemberfound Iran, the U.S., and other world leaders in Geneva fortwo days of talks on Iran’s nuclear program (the first in morethan a year), which concluded with plans to meet again inlate January 2011.

On the Horizon While U.S. diplomats left Geneva with the hope that the

talks marked the beginning of “a serious process” to resolveinternational concerns regarding Iran’s nuclear ambitions, theU.S. Congress kept up the pressure, marking the eve of thetalks by introduction in the Senate5 of legislation that would,among other things, expand sanctions under the ISA to punish U.S. parent companies for activities of their foreignsubsidiaries, deny entry into the United States for principalofficers of companies that do business with Iran, and requirestepped up efforts by OFAC to designate front companies forthe Iran Revolutionary Guards Corps as SDNs. n

*Please contact Barbara D. Linney directly for furtherinquiries related to this article and/or subject matter.

1. The ISA originally was enacted in 1996 as the Iran-Libya Sanctions Act.

2. The term “refined petroleum products” is defined to mean “diesel,gasoline, jet fuel (including naphtha-type and kerosene-type jet fuel),and aviation gasoline.”

3. See Press Release issued by the Council of the European Union on July26, 2010. It is speculated that the broad E.U. approach to implementa-tion of the U.N. Resolution was intended to pave the way for waiver ofsanctions under the ISA against persons from E.U. Member States onthe ground that the Member States are co-operating in multilateralefforts to prevent Iran from acquiring nuclear and advanced conventionalweapons.

4. The E.U. sanctions therefore contain broader restrictions than thosecontained in the previously existing U.K. Treasury restrictions in force asof October 12, 2009, which had directed “all persons operating in thefinancial sector” (defined to include credit and financial institutions andcertain types of insurance companies and intermediaries) to refrainfrom entering into or continuing to participate in any transaction or busi-ness relationship with IRISL or any of its branches. On July 27, 2010,the U.K. Treasury acted to implement the U.N. Resolution and thebroader E.U. sanctions.

5. Similar legislation is pending in the House of Representatives.

(see “Impact of the Sanctions”), several companies report-edly have availed themselves of this safe harbor.

European Union Following the U.S. lead, the European Union also imple-

mented sanctions in excess of those required by the U.N.Resolution. In addition to implementing the sanctions requiredby the U.N. Resolution, the E.U. sanctions consist of “a com-prehensive and robust package of measures in the areas oftrade, financial services, energy, transport . . . [and] addition-al designations for visa ban and asset freeze.3 One suchmeasure prohibits “the provision of insurance and re-insur-ance to the Government of Iran, or to entities incorporatedin Iran or subject to Iran’s jurisdiction, or to any individuals orentities acting on their behalf or at their direction, or to enti-ties owned or controlled by them.”4 Another measurerequires written notification to the applicable Member Statefor any funds transfer to or from Iran in excess of 10 000euro and prior authorization of the Member State for fundstransfers to or from Iran in excess of 40 000 euro. In addi-tion, and significantly, the sanctions added IRISL, many of itsaffiliates, and several Iranian banks to the list of entities sub-jected to freezing of assets in the E.U.

Thus, the effect of E.U. sanctions has been to restrictIran’s and IRISL’s access to European financial and insurancemarkets, which had previously compensated for Iran’s exclu-sion from the U.S. markets.

Impact of the SanctionsAll indications are that the mounting tide of sanctions is

taking its toll both on Iran (its intended target) and the inter-national shipping community. Blocked funds, rejected U.S.dollar transactions, contractual conundrums, and uncertaintyhave made navigating an already complex regulatory environ-ment even more difficult. It goes without saying that thosewho wish to continue pursuing lawful business opportunitieswith Iran or Iranian entities must establish comprehensivecompliance programs that ensure an up-to-the minuteunderstanding of the various applicable regimes. However,even the grandest compliance program provides cold com-fort for those caught mid-transaction by new SDN and otherblocked party designations with immediate effect. In today’senvironment, a workable compliance program must focusnot only on the current state of applicable laws and regula-tions, but equally on the risk of regulatory changes. As apractical matter, this means that parties to shipping transac-tions in particular must conduct due diligence to determinewhether they are dealing with persons who are at risk of being

No End to Rough Seas for Iran as SanctionsPressure Continues to BuildBY BARBARA D. LINNEY,* KELLY LOUGHERY, AND KEVIN J. MILLER

During the past six months, U.S. efforts to build globalsupport for sanctions against Iran have resulted in a majorsea change for the international shipping community andother industries doing business with Iran, and the wave ofsanctions activity continues to build despite indications thatthe cumulative effect of the new embargoes has begun toachieve the desired impact.

In June, U.S.-led diplomatic pressure resulted in theadoption of enhanced U.N. sanctions, while longstandingU.S. congressional initiatives culminated in amendments tothe Iran Sanctions Act (“ISA”).1 Implementation of the U.N.sanctions was accompanied in many jurisdictions, includingthe European Union, by adoption of far-reaching sanctionsthat exceeded the measures mandated by the United Nations.Stateside, a steady stream of new restrictions has resultedfrom both implementation of the amended ISA and addi-tional measures under ongoing embargoes administered bythe Office of Foreign Assets Control (“OFAC”). The velocityand extent of changes to the regulatory seascape have beenenormous, and bills recently introduced in the U.S. Congresssignal the possibility of further developments on the horizon.

This article provides a broad overview of the recent U.N.,U.S., and E.U. sanctions, with particular emphasis on thetypes of activities prohibited by each regime. However, inview of the diversity and complexity of the various sanctionsprograms, any transaction involving Iran should be analyzedcarefully in light of the applicable facts and circumstances,and with particular consideration of the often conflictingdomestic, regional, and international laws that may apply.

U.N. Sanctions U.N. Security Council Resolution 1929 (2010) (the

“U.N. Resolution”), passed June 9, 2010, obliges U.N.Member States to abide by and impose specified sanctions.

The U.N. Resolution specifically targets Iran’s nuclearprogram and generally requires Member States to prohibit

activities that may contribute to Iran’s proliferation or develop-ment of nuclear weapons capabilities. Of particular interest tothe maritime industry are: (i) prohibitions against use ofMember State flag vessels to carry certain nuclear materialsand technology, and certain arms and related materiel, toand from Iran; (ii) the requirement that Member Statesinspect vessels suspected of carrying banned conventionalarms or sensitive nuclear or missile items, and seize and dis-pose of any such items; (iii) prohibitions against provision ofbunkering and other services to Iranian-owned or contractedvessels suspected of carrying prohibited cargo; (iv) therequirement that Member States freeze the assets of variousindividuals and entities determined to have assisted in evad-ing or violating previous U.N. sanctions, including Irano HindShipping Company, IRISL Benelux NV, and South ShippingLine Iran (SSL) (all entities deemed to be owned, controlledby, or acting on behalf of the Islamic Republic of IranShipping Lines (“IRISL”)); and prohibitions against provisionof financial services, including insurance or re-insurance, ifthere are reasonable grounds to believe that such servicescould contribute to Iran’s proliferation activities.

Each Member State bears responsibility for implement-ing the U.N. Resolution within its jurisdiction through its owndomestic laws. As a result, the practical ramifications of theU.N. Resolution vary from Member State to Member Statedepending upon the manner in which the particular MemberState implements and enforces the required sanctions.

U.S. SanctionsThe anchor of the U.S. Iranian sanctions program is the

long-standing OFAC-administered embargo against U.S. tradewith Iran, bolstered in recent years by a non-proliferation sanc-tions program, which, together with the Iranian TransactionsRegulations, has been utilized by OFAC as a platform fortightening restrictions on Iran. Charting a course for thegroundswell of recent developments, the past two yearshave seen elimination of the ability of U.S. banks to engagein so-called “U-turn” transactions benefiting Iran, as well asdesignation of IRISL and a host of its affiliates and vessels as“Specially Designated Nationals” (or “SDNs”) with whomU.S. persons may not deal. These measures resulted in asubstantial reduction of IRISL’s access to U.S. dollars andopportunities to carry U.S.-bound cargo.

However, the OFAC sanctions did not reach beyond theactivities of U.S. persons. This void, together with the historiclack of enforcement of the ISA, had long been a source ofU.S. congressional concern, and years of attempts to fill thegap with legislation finally came to fruition on July 1, 2010when President Obama signed the Comprehensive Iran

Section 711: Tug Escorts for Laden Oil Tankers: encour-ages the Coast Guard, in consultation with the Secretary ofState, to enter into negotiations with the Government ofCanada to update the agreement between the United Statesand Canada for the management of maritime traffic in PugetSound, the Strait of Georgia, Haro Strait, Rosario Strait, andthe Strait of de Fuca.

Section 712: Extension of Financial Responsibility:extends financial responsibility to any tank vessel over 100gross tons.

Section 713: Liability for Use of Single-Hull Vessels:broadens the term “Responsible Party” to include oil cargoowners being transported in a tank vessel with a single hullafter December 31, 2010.

Legislative Forecast Following the November elections, Congress is now in

session to complete the lame-duck session, which may lastuntil the week before Christmas. Oil spill legislation does notappear to be high on the agenda. The larger looming issuesthat Congress must deal with, such as taxes and agencyfunding, will likely monopolize the remaining time that thisCongress has to act.

While the House must wait and watch the Senate havingpassed an oil spill bill earlier, the Senate seems to be hungup on a broad-based oil spill bill that will address many energyrelated issues, including climate change. Post-election, it appearsthat Senate Democrats and Republicans are too far apart tobe able to come to any resolution of key issues quickly.Therefore, it appears likely that Congress will run out of timeto produce a bill and that an attempt to pass private reliefbills for the individuals killed on the rig is probably all theymay be able to accomplish with respect to DHOS-relatedlegislation.

Reflecting on the Exxon Valdez spill in 1989, it tookCongress approximately 18 months to enact legislation following that incident. Hopefully, in our view, it will takeCongress at least that long to implement legislation after theDeepwater Horizon incident to give it time to reflect on theactions taken by the industry and the Administration toimplement changes to the existing pollution and responseregimes based on lessons learned to prevent enacting legislation that overreacts to this incident. However, the situation in a lame-duck session can change quickly and dra-matically. Therefore, it remains prudent to monitor Congress’sconsideration of oil spill legislation until it adjourns for theyear. n

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(continued on page 8)

Sanctions, Accountability and Divestment Act 2010 (“CISADA”)into law. Among other things, CISADA amended the ISA toexpand the list of sanctionable activities as well as the menu ofpossible sanctions for individuals and entities doing sanctionedbusiness with Iran. CISADA’s provisions and the extra-territorialnature of their application have significant ramifications not onlyfor the global energy sector, but also for the plethora of indus-tries which service, supply and profit from this sector, with thenotable inclusion of the shipping industry.

As amended by CISADA, the ISA principally targets anypersons determined to have “invested” (as broadly defined)in Iran’s ability to develop its domestic petroleum resourcesor obtain such resources abroad. CISADA fixed the invest-ment threshold for sanctionable investments in the develop-ment of Iran’s petroleum resources at $20 million andexpanded the definition of petroleum resources to includepetroleum, refined petroleum products, oil or liquefied nat-ural gas, natural gas resources, oil or liquefied natural gastankers, and products used to construct or maintainpipelines used to transport oil or liquefied natural gas. Alsotargeted are persons contributing to Iran’s conventional andnuclear weapons proliferation activities and persons supply-ing refined petroleum products2 to Iran, as well as those whosupply goods, services, and technology that could facilitateor contribute to Iran’s ability to produce or import refinedpetroleum products (subject to certain materiality and valuethresholds). Provision of ships or shipping services to deliverrefined petroleum products to Iran is specifically identified asa sanctionable service if the applicable thresholds are met.

Significantly, the CISADA amendments provided a mech -an ism for relief from sanctions for persons from countriesfound to be co-operating with multilateral efforts to preventIran from acquiring nuclear and advanced chemical weapons(see E.U. Sanctions discussion below) and persons who agreeto cease their sanctionable activities (see “Safe Harbor”).

In addition to amending the ISA, CISADA imposed orrequired adoption of various other measures designed totighten the blockade of Iran, including increased penalties forviolations of U.N. Security Council resolutions to a maximumof $1 million in fines and up to 20 years imprisonment.

Safe HarborCISADA provided a safe harbor by way of a “special

rule” that allows persons engaged in sanctionable activitiesin Iran to avoid sanctions by providing reliable assurancesthat they are no longer engaging in the activity or have takensignificant verifiable steps toward stopping the activity, aswell as further assurances that they will not knowinglyengage in such activities in the future. As noted below

BARBARA D. LINNEYPARTNER

Linney@BlankRome.com

Oil Spill Legislation (continued from page 5)

KELLY LOUGHERYASSOCIATE

Loughery@BlankRome.com

KEVIN J. MILLERTRADE SPECIALIST

Miller-K@BlankRome.com

No End to Rough Seas for Iran as SanctionsPressure Continues to BuildBY BARBARA D. LINNEY,* KELLY LOUGHERY, AND KEVIN J. MILLER

During the past six months, U.S. efforts to build globalsupport for sanctions against Iran have resulted in a majorsea change for the international shipping community andother industries doing business with Iran, and the wave ofsanctions activity continues to build despite indications thatthe cumulative effect of the new embargoes has begun toachieve the desired impact.

In June, U.S.-led diplomatic pressure resulted in theadoption of enhanced U.N. sanctions, while longstandingU.S. congressional initiatives culminated in amendments tothe Iran Sanctions Act (“ISA”).1 Implementation of the U.N.sanctions was accompanied in many jurisdictions, includingthe European Union, by adoption of far-reaching sanctionsthat exceeded the measures mandated by the United Nations.Stateside, a steady stream of new restrictions has resultedfrom both implementation of the amended ISA and addi-tional measures under ongoing embargoes administered bythe Office of Foreign Assets Control (“OFAC”). The velocityand extent of changes to the regulatory seascape have beenenormous, and bills recently introduced in the U.S. Congresssignal the possibility of further developments on the horizon.

This article provides a broad overview of the recent U.N.,U.S., and E.U. sanctions, with particular emphasis on thetypes of activities prohibited by each regime. However, inview of the diversity and complexity of the various sanctionsprograms, any transaction involving Iran should be analyzedcarefully in light of the applicable facts and circumstances,and with particular consideration of the often conflictingdomestic, regional, and international laws that may apply.

U.N. Sanctions U.N. Security Council Resolution 1929 (2010) (the

“U.N. Resolution”), passed June 9, 2010, obliges U.N.Member States to abide by and impose specified sanctions.

The U.N. Resolution specifically targets Iran’s nuclearprogram and generally requires Member States to prohibit

activities that may contribute to Iran’s proliferation or develop-ment of nuclear weapons capabilities. Of particular interest tothe maritime industry are: (i) prohibitions against use ofMember State flag vessels to carry certain nuclear materialsand technology, and certain arms and related materiel, toand from Iran; (ii) the requirement that Member Statesinspect vessels suspected of carrying banned conventionalarms or sensitive nuclear or missile items, and seize and dis-pose of any such items; (iii) prohibitions against provision ofbunkering and other services to Iranian-owned or contractedvessels suspected of carrying prohibited cargo; (iv) therequirement that Member States freeze the assets of variousindividuals and entities determined to have assisted in evad-ing or violating previous U.N. sanctions, including Irano HindShipping Company, IRISL Benelux NV, and South ShippingLine Iran (SSL) (all entities deemed to be owned, controlledby, or acting on behalf of the Islamic Republic of IranShipping Lines (“IRISL”)); and prohibitions against provisionof financial services, including insurance or re-insurance, ifthere are reasonable grounds to believe that such servicescould contribute to Iran’s proliferation activities.

Each Member State bears responsibility for implement-ing the U.N. Resolution within its jurisdiction through its owndomestic laws. As a result, the practical ramifications of theU.N. Resolution vary from Member State to Member Statedepending upon the manner in which the particular MemberState implements and enforces the required sanctions.

U.S. SanctionsThe anchor of the U.S. Iranian sanctions program is the

long-standing OFAC-administered embargo against U.S. tradewith Iran, bolstered in recent years by a non-proliferation sanc-tions program, which, together with the Iranian TransactionsRegulations, has been utilized by OFAC as a platform fortightening restrictions on Iran. Charting a course for thegroundswell of recent developments, the past two yearshave seen elimination of the ability of U.S. banks to engagein so-called “U-turn” transactions benefiting Iran, as well asdesignation of IRISL and a host of its affiliates and vessels as“Specially Designated Nationals” (or “SDNs”) with whomU.S. persons may not deal. These measures resulted in asubstantial reduction of IRISL’s access to U.S. dollars andopportunities to carry U.S.-bound cargo.

However, the OFAC sanctions did not reach beyond theactivities of U.S. persons. This void, together with the historiclack of enforcement of the ISA, had long been a source ofU.S. congressional concern, and years of attempts to fill thegap with legislation finally came to fruition on July 1, 2010when President Obama signed the Comprehensive Iran

Section 711: Tug Escorts for Laden Oil Tankers: encour-ages the Coast Guard, in consultation with the Secretary ofState, to enter into negotiations with the Government ofCanada to update the agreement between the United Statesand Canada for the management of maritime traffic in PugetSound, the Strait of Georgia, Haro Strait, Rosario Strait, andthe Strait of de Fuca.

Section 712: Extension of Financial Responsibility:extends financial responsibility to any tank vessel over 100gross tons.

Section 713: Liability for Use of Single-Hull Vessels:broadens the term “Responsible Party” to include oil cargoowners being transported in a tank vessel with a single hullafter December 31, 2010.

Legislative Forecast Following the November elections, Congress is now in

session to complete the lame-duck session, which may lastuntil the week before Christmas. Oil spill legislation does notappear to be high on the agenda. The larger looming issuesthat Congress must deal with, such as taxes and agencyfunding, will likely monopolize the remaining time that thisCongress has to act.

While the House must wait and watch the Senate havingpassed an oil spill bill earlier, the Senate seems to be hungup on a broad-based oil spill bill that will address many energyrelated issues, including climate change. Post-election, it appearsthat Senate Democrats and Republicans are too far apart tobe able to come to any resolution of key issues quickly.Therefore, it appears likely that Congress will run out of timeto produce a bill and that an attempt to pass private reliefbills for the individuals killed on the rig is probably all theymay be able to accomplish with respect to DHOS-relatedlegislation.

Reflecting on the Exxon Valdez spill in 1989, it tookCongress approximately 18 months to enact legislation following that incident. Hopefully, in our view, it will takeCongress at least that long to implement legislation after theDeepwater Horizon incident to give it time to reflect on theactions taken by the industry and the Administration toimplement changes to the existing pollution and responseregimes based on lessons learned to prevent enacting legislation that overreacts to this incident. However, the situation in a lame-duck session can change quickly and dra-matically. Therefore, it remains prudent to monitor Congress’sconsideration of oil spill legislation until it adjourns for theyear. n

MAI N B R ACE

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MAI N B R ACE

(continued on page 8)

Sanctions, Accountability and Divestment Act 2010 (“CISADA”)into law. Among other things, CISADA amended the ISA toexpand the list of sanctionable activities as well as the menu ofpossible sanctions for individuals and entities doing sanctionedbusiness with Iran. CISADA’s provisions and the extra-territorialnature of their application have significant ramifications not onlyfor the global energy sector, but also for the plethora of indus-tries which service, supply and profit from this sector, with thenotable inclusion of the shipping industry.

As amended by CISADA, the ISA principally targets anypersons determined to have “invested” (as broadly defined)in Iran’s ability to develop its domestic petroleum resourcesor obtain such resources abroad. CISADA fixed the invest-ment threshold for sanctionable investments in the develop-ment of Iran’s petroleum resources at $20 million andexpanded the definition of petroleum resources to includepetroleum, refined petroleum products, oil or liquefied nat-ural gas, natural gas resources, oil or liquefied natural gastankers, and products used to construct or maintainpipelines used to transport oil or liquefied natural gas. Alsotargeted are persons contributing to Iran’s conventional andnuclear weapons proliferation activities and persons supply-ing refined petroleum products2 to Iran, as well as those whosupply goods, services, and technology that could facilitateor contribute to Iran’s ability to produce or import refinedpetroleum products (subject to certain materiality and valuethresholds). Provision of ships or shipping services to deliverrefined petroleum products to Iran is specifically identified asa sanctionable service if the applicable thresholds are met.

Significantly, the CISADA amendments provided a mech -an ism for relief from sanctions for persons from countriesfound to be co-operating with multilateral efforts to preventIran from acquiring nuclear and advanced chemical weapons(see E.U. Sanctions discussion below) and persons who agreeto cease their sanctionable activities (see “Safe Harbor”).

In addition to amending the ISA, CISADA imposed orrequired adoption of various other measures designed totighten the blockade of Iran, including increased penalties forviolations of U.N. Security Council resolutions to a maximumof $1 million in fines and up to 20 years imprisonment.

Safe HarborCISADA provided a safe harbor by way of a “special

rule” that allows persons engaged in sanctionable activitiesin Iran to avoid sanctions by providing reliable assurancesthat they are no longer engaging in the activity or have takensignificant verifiable steps toward stopping the activity, aswell as further assurances that they will not knowinglyengage in such activities in the future. As noted below

BARBARA D. LINNEYPARTNER

Linney@BlankRome.com

Oil Spill Legislation (continued from page 5)

KELLY LOUGHERYASSOCIATE

Loughery@BlankRome.com

KEVIN J. MILLERTRADE SPECIALIST

Miller-K@BlankRome.com

Section 731: Extension of Liability to Persons HavingOwnership Interests in Responsible Parties: would extendthe definition of a Responsible Party under OPA 90 toany person having more than a 25% ownership interest ina vessel or facility retroactive to January 1, 2010.

Key Senate Provisions in the Clean Energy Jobs andOil Spill Accountability Act (S. 3663)

Section 102: Removal of Limits of Liability for OffshoreFacilities: would eliminate the current $75 million cap on theliability limitation on liability for damages.

Section 104: Oil and Hazardous Substance ResponsePlanning: would specify additional requirements for oil spillresponse plans (i.e., response to a loss of well control methods and equipment technologically feasible, and priorassessment of potential impacts to ecologically-sensitiveareas). Publishes the response plan in the Federal Registerand provides a 30-day comment period.

Section 502: Repeal of Limitation of Shipowners’Liability Act of 1851: would mandate that the Owner of avessel could no longer limit liability for all claims for personalinjury or death.

Section 503: Assessment of Punitive Damages inMaritime Law: would overrule Exxon Shipping Co. v. Baker(i.e., a 1-to-1 test) and allows for unlimited punitive dam-ages to be awarded by a court.

Section 504: Amendments to the Death on the HighSeas Act: would amend the Death on the High Seas Act toenhance remedies for wrongful death.

Section 624: Oil Spill Evaluation Technology: wouldrequire programs and processes for the formal submission,evaluation, and validation of oil spill containment andremoval methods and technologies.

Section 625: Coast Guard Inspections: would mandateimprovements in the frequency and comprehensiveness ofCoast Guard safety inspections and structured verification forall U.S. and foreign-flag tank vessels.

Section 626: Certificate of Inspection Requirements:would require a certificate of inspection in accordance withthe highest relevant classification, certification, rating, andinspection standards.

Section 630: Vessel Liability: would increase the limitsof liabilities for all tank vessels.

Key Oil Spill Provisions Contained in the CoastGuard Authorization Act of 2010

Although Deepwater Horizon-related spill legislationwas not enacted before Congress recessed prior to theNovember elections, significant oil spill provisions were

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included in Coast Guard Authorization Act that was signedinto law by the President on October 15, 2010. The key oilspill-related measures are listed below.

Section 701: Rulemakings: requires the Coast Guard toprovide a report to Congress within 90 days on the status ofall Coast Guard rulemakings required or being developed. Inaddition, requires the Secretary to issue a notice of proposedrulemaking regarding inspection requirements for towing ves-sels within 90 days of enactment of the Authorization Act.

Section 702: Oil Transfers from Vessels: requires theCoast Guard to promulgate regulations to reduce the risks ofoil spills involving the transfer of oil from or to a tank vessel.

Section 703: Improvements to Reduce Human Errorand Near Miss Incidents: requires the Coast Guard to reportto Congress on human errors that could cause oils spills,including the most frequent types of near-miss oil spill inci-dents involving vessels address errors and knowledge gaps.

Section 704: Olympic Coast National Marine Sanctuary:requires the Coast Guard to revise this area to be avoidedoff the coast of the State of Washington for certain restric-tions to apply to specified vessels.

Section 705: Prevention of Small Oil Spills: authorizes a$10 million oil spill prevention and education program to beestablished by the Under Secretary of Commerce for Oceansand Atmosphere in consultation with the Coast Guard.

Section 706: Improved Coordination with Tribal Govern -ments: requires the Coast Guard to complete the develop-ment of a tribal consultation policy that recognizes and protects tribal treaty rights and trust assets.

Section 707: Report on Availability of Technology toDetect the Loss of Oil: requires the Coast Guard to submit areport to Congress on the availability, feasibility, and poten-tial cost of technology to detect the loss of oil carried ascargo or as fuel on vessels greater than 400 gross tons.

Section 708: Use of Oil Spill Liability Trust Fund: providesno more than $15 million each fiscal year for expensesincurred by, and activities relates to, response and damageassessment capabilities of the National Oceanic andAtmospheric Administration.

Section 709: International Efforts on Enforcement:requires the Coast Guard, in consultation with other agen-cies, to pursue stronger enforcement of agreements relatedto oil discharges.

Section 710: Higher Volume Port Area RegulatoryDefinition Change: requires the Coast Guard to modify thedefinition of “higher volume port area” by replacing “PortAngeles, WA” with “Cape Flattery, WA.”

designated as off-limits during the pendency of the transaction.As for Iran, despite its denials there is mounting

evidence that the sanctions are having an impact. The U.S.Department of State recently announced that it has receivedcommitments from four international energy firms to termi-nate their investments and avoid any new activity in Iran’senergy sector (see “Safe Harbor”), and the shrinking insur-ance market has spawned the first general license underOFAC’s proliferation sanctions program, authorizing trans -actions related to the arrest, detention, and judicial sale ofIRISL vessels seized for violation of the governing loanagreements due to IRISL’s failure to provide the requisiteinsurance for the vessels. Even more telling, early Decemberfound Iran, the U.S., and other world leaders in Geneva fortwo days of talks on Iran’s nuclear program (the first in morethan a year), which concluded with plans to meet again inlate January 2011.

On the Horizon While U.S. diplomats left Geneva with the hope that the

talks marked the beginning of “a serious process” to resolveinternational concerns regarding Iran’s nuclear ambitions, theU.S. Congress kept up the pressure, marking the eve of thetalks by introduction in the Senate5 of legislation that would,among other things, expand sanctions under the ISA to punish U.S. parent companies for activities of their foreignsubsidiaries, deny entry into the United States for principalofficers of companies that do business with Iran, and requirestepped up efforts by OFAC to designate front companies forthe Iran Revolutionary Guards Corps as SDNs. n

*Please contact Barbara D. Linney directly for furtherinquiries related to this article and/or subject matter.

1. The ISA originally was enacted in 1996 as the Iran-Libya Sanctions Act.

2. The term “refined petroleum products” is defined to mean “diesel,gasoline, jet fuel (including naphtha-type and kerosene-type jet fuel),and aviation gasoline.”

3. See Press Release issued by the Council of the European Union on July26, 2010. It is speculated that the broad E.U. approach to implementa-tion of the U.N. Resolution was intended to pave the way for waiver ofsanctions under the ISA against persons from E.U. Member States onthe ground that the Member States are co-operating in multilateralefforts to prevent Iran from acquiring nuclear and advanced conventionalweapons.

4. The E.U. sanctions therefore contain broader restrictions than thosecontained in the previously existing U.K. Treasury restrictions in force asof October 12, 2009, which had directed “all persons operating in thefinancial sector” (defined to include credit and financial institutions andcertain types of insurance companies and intermediaries) to refrainfrom entering into or continuing to participate in any transaction or busi-ness relationship with IRISL or any of its branches. On July 27, 2010,the U.K. Treasury acted to implement the U.N. Resolution and thebroader E.U. sanctions.

5. Similar legislation is pending in the House of Representatives.

(see “Impact of the Sanctions”), several companies report-edly have availed themselves of this safe harbor.

European Union Following the U.S. lead, the European Union also imple-

mented sanctions in excess of those required by the U.N.Resolution. In addition to implementing the sanctions requiredby the U.N. Resolution, the E.U. sanctions consist of “a com-prehensive and robust package of measures in the areas oftrade, financial services, energy, transport . . . [and] addition-al designations for visa ban and asset freeze.3 One suchmeasure prohibits “the provision of insurance and re-insur-ance to the Government of Iran, or to entities incorporatedin Iran or subject to Iran’s jurisdiction, or to any individuals orentities acting on their behalf or at their direction, or to enti-ties owned or controlled by them.”4 Another measurerequires written notification to the applicable Member Statefor any funds transfer to or from Iran in excess of 10 000euro and prior authorization of the Member State for fundstransfers to or from Iran in excess of 40 000 euro. In addi-tion, and significantly, the sanctions added IRISL, many of itsaffiliates, and several Iranian banks to the list of entities sub-jected to freezing of assets in the E.U.

Thus, the effect of E.U. sanctions has been to restrictIran’s and IRISL’s access to European financial and insurancemarkets, which had previously compensated for Iran’s exclu-sion from the U.S. markets.

Impact of the SanctionsAll indications are that the mounting tide of sanctions is

taking its toll both on Iran (its intended target) and the inter-national shipping community. Blocked funds, rejected U.S.dollar transactions, contractual conundrums, and uncertaintyhave made navigating an already complex regulatory environ-ment even more difficult. It goes without saying that thosewho wish to continue pursuing lawful business opportunitieswith Iran or Iranian entities must establish comprehensivecompliance programs that ensure an up-to-the minuteunderstanding of the various applicable regimes. However,even the grandest compliance program provides cold com-fort for those caught mid-transaction by new SDN and otherblocked party designations with immediate effect. In today’senvironment, a workable compliance program must focusnot only on the current state of applicable laws and regula-tions, but equally on the risk of regulatory changes. As apractical matter, this means that parties to shipping transac-tions in particular must conduct due diligence to determinewhether they are dealing with persons who are at risk of being

Maritime Responder Obligations andLiability

BY JEFFREY S. MOLLER

During the U.S. Maritime Law Asso -ciation’s Houston-based meeting inOctober 2010, an important item dis-cussed was the liability and/or immu-nity of oil spill response contractors.One driver for the discussion was thefact that several such contractors havefound themselves targets for claims

brought by individuals, businesses, and municipalities affectedby the Deepwater Horizon spill. That question is governedquite directly by the terms of the Federal Water PollutionControl Act, as amended by the Oil Pollution Act of 1990.But there are other federal statutes and general maritimelaw decisions that bear upon the issues of theduty to respond to maritime casualties and thepotential liability exposure for such responders.

Mariners have long understood that a moral,if not legal, obligation is upon them to renderassistance to persons in peril at sea. The generalrubric is that the master or person in charge of avessel is obliged to assist others in danger unlessrendering such assistance would place his ownvessel, crew, or passengers in serious danger. Thisnotion was ultimately placed into positive federallaw by Congress, and is now found at 46 U.S.C.§2304(a). The statute sets up a criminal penaltyof $1,000 or imprisonment for as long as twoyears for its violation. The duty does not extend tosaving property, but to saving “any individualfound at sea in danger of being lost.” A compan-ion statute pertains to the obligation of master or individualin charge of a vessel that has been involved in a marinecasualty. 46 U.S.C. §2303. Again, the obligation is phrased interms of rendering assistance to “each individual” affectedby the marine casualty. A criminal penalty of similar sizeapplies and the vessel is potentially liable in rem to the U.S.Government for the fine. Interestingly, Section 2304 con-tains an exception for vessels of war or vessels owned by theU.S. Government dedicated to public service. Therefore, U.S.Naval or Coast Guard vessels are obliged to render assis-tance to individuals only when the U.S. vessel has beeninvolved in a marine casualty that put the individuals at risk.(Other general maritime law rules and statutes apply to theCoast Guard’s obligation to undertake search and rescue mis-sions, of course, there being a well- recognized rule known asthe “discretionary function” doctrine.)

Key House Provisions in the CLEAR Act (H. 3534)Section 220: Manning and Buy and Build American

Requirements: would apply U.S. immigration laws offshore,which would have the practical effect of requiring foreignworkers to obtain a capped number of H2-B visas to workoffshore.

Section 702: Repeal of and Adjustments to Limitationon Liability: would apply retroactively to the DHOS and requiresagency review every three years.

Section 703: Evidence of Financial Responsibility: wouldincrease the required demonstrations of financial responsibilityfor offshore facilities unless the President determines thatlower amounts may be required. Also requires review and revi-sion upward every three years.

Section 704: Damages to Human Health: would add“damages to human health” as compensable under OPA 90.

Section 708: OPA 90 Amendments and Clarifications:would add “costs of federal enforcement activities” to thedefinition of removal costs under OPA 90.

Section 709: Americanization of Offshore Operations inthe Exclusive Economic Zone: would require that all vesselsinvolved in offshore-related activities be U.S.-flagged (and thus

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U.S.-crewed) and 75% U.S.-owned effective after July 1,2011. Apparently applies to alternative energy projects, ligh-tering operations, and freight carriage within the EEZ.

Section 714: Repeal of Response Plan Waiver: wouldrepeal the current waiver authority to operate without anapproved oil spill response plan.

Section 717: Evaluation and Approval of ResponsePlans; Maximum Penalties: would require public notice andcomment on response plans and increases the civil penaltiesavailable for oil spills, including retroactively for the DHOS.

Section 719: Implementation of Oil Spill Preventionand Response Authorities: would require agencies to developand maintain the internal operational capability to respond,and the Coast Guard to have sufficient personnel andresources to act as a first responder.

Section 724: Clarification of Memorandums of Under -standing: would require federal agencies to clarify the rolesand jurisdictional responsibilities relating to the prevention ofoil discharges.

Section 725: Build America Requirement for OffshoreFacilities: would require any offshore facility (including aMobile Offshore Drilling Unit) to be built in the United Stateswith a waiver for facilities: (1) under contract on the date ofenactment, (2) non-availability, or (3) an emergency.

The law mandates that those who render assistancemust exercise reasonable care and acceptable seamanshipin doing so, or else suffer liability for the aggravation orexcess harm that they cause to the individuals or property.One of the two federal statutes cited above contains a specific “Good Samaritan” provision, which provides thatthose who render assistance shall not be found liable for thedamage caused by their efforts unless they have failed toexercise reasonable care. The immunity provided by such alaw is illusory, in my estimation, because the general mar-itime law would never impose liability upon any personunless they either breached some contractual obligation orwere determined to have been negligent.

The so-called “discretionary function” doctrine applicableto government activities alluded to above contains a similarcorollary rule. In other words, if the government decides inthe exercise of its discretion to take on a function such as

rendering assistance to individuals or property, that agencyis obliged to exercise good seamanship and act as would areasonably prudent person under similar circumstances.Numerous reported cases exist in which the Coast Guard hasbeen sued for negligently causing personal injury or propertydamage during the course of their rescue operations.

There are some cases that have determined that ratherthan a “reasonable seaman” or simple negligence standard,maritime law requires proof of gross negligence or willfulmisconduct in order to render a responder liable for conse-quent harm. But the language of 46 U.S.C. §2303(c) wouldseem to have contradicted that—at least, within its jurisdic-tional sphere of influence.

Some readers may recognize an interplay between thelaw of salvage and the rules regarding the obligations and

JEFFREY S. MOLLERPARTNER

Moller@BlankRome.com

Aerial view of the Deepwater Horizon spill

Oil Spill Legislation (continued from page 3)

(continued on page 10)

A Look Over the Horizon: Oil Spill Legislation BY DUNCAN C. SMITH AND JONATHAN K. WALDRON

Congress wasextremely busy withproposed spill legis-lation during thesummer of 2010 asa result of the Deep -water Horizon oilspill (“DHOS”) inci-dent. In this regard,

the House passed H.R. 3534, the Consolidated Land,Energy, and Aquatic Resources Act of 2009 (the “CLEARAct”). Among other things, this bill would repeal limits of lia-bility, increase the minimum level of financial responsibilityfor an offshore facility to $1.5 billion, authorize recovery fornon-pecuniary damages and human health injuries, andsubstantially revise the oil spill response planning and safe-ty regimes for vessels and facilities. It also has numerous provisions related to oil and gas activities offshore, including

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Here we are, once again, almostthrough another year. Is it just me, ordon’t they seem to pass with alarmingspeed?

Quite a lot happened this year tomake it memorable, but in the U.S.maritime world it would be difficult totop the Deepwater Horizon oil spilldisaster for newsworthiness. The litiga-

tion has only just begun and promises to stretch on in itsmany phases for years to come. And though Congress gotoff to an almost frighteningly quick start on new oil spill leg-islation, as Jonathan K. Waldron and Duncan C. Smithreport in this issue of Mainbrace (see “A Look Over theHorizon: Oil Spill Legislation” on page 3), those effortsappear to have bogged down since the elections. So, itseems safe to say that this is an issue that will occupymuch of our time and attention in 2011—and probablywell beyond. Additionally, as Jeffrey S. Moller notes in hisarticle (see “Maritime Responder Obligations and Liability”on page 9), issues of responder liability come to the fore-front in these events.

The issues surrounding the modern surge of piracy didnot get any easier this year and, as John D. Kimball andDeepa Padmanabha report (see “What is Piracy?” on page1), in late November 2010 the United States courts sawtheir first piracy conviction in almost 200 years. Sanctionsand foreign asset control also remain critical and anxiety-producing topics and, as Barbara D. Linney, Kelly Lougheryand Kevin J. Miller report (see “No End to Rough Seas forIran as Sanctions Pressure Continues to Build” on page 6),the new efforts at Iran sanctions in the United States andthe European Union are causing significant confusion andconcern in the shipping world. And meanwhile, as Joan M.Bondareff reports (see “President Obama Announces aNew Ocean Policy and Framework for Mapping the EEZ” onpage 11), the U.S. Government continues its perennialeffort to organize and manage our coastal resources.

Add to these issues the shipping market gyrations, cor-porate and national debt issues, and political instability invarious places around the world, and it is clear that wemust all stay on our toes for 2011. But if it were easy,everybody would be doing it, wouldn’t they?

Here’s to a happy, healthy, and prosperous 2011!

(continued on page 4)

reorganizing the Minerals Management Service as well as off-shore safety, environmental, and financial reform.

Although the Senate failed to pass a bill, it consolidatedproposed oil spill legislation into S. 3663, the Clean EnergyJobs and Oil Spill Accountability Plan, which was introducedby Senator Reid on July 28, 2010. However, this legislationcontained too much controversy related to unlimited liabilitylanguage, thereby causing both Senator Begich (D-Alaska)and Senator Landrieu (D-Louisiana) to introduce separatemeasures intended to hold oil companies accountable—without placing a burden on taxpayers and shutting smallercompanies out—from operating offshore. No further actionhas been taken on S. 3663 since then.

Putting aside the efforts of Congress to pass oil spill leg-islation as a result of the DHOS incident, significant oil spilllegislation was enacted as part of the Coast GuardAuthorization Act of 2010 (the “Authorization Act”) enactedin October this year. The following is a summary of the keypollution-related provisions of the House and SenateDeepwater Horizon legislation, as well as the oil spill legisla-tion enacted by Congress pursuant to the Authorization Act.

vessel, enhanced wreck removal expenses, and expensesresulting from enhanced or aggravated pollution.

As mentioned above, the Federal Water Pollution ControlAct, as amended by OPA 90, contains a specific provisionproviding immunity to oil spill clean-up contractors and otherresponders. Under the terms of that statute, it is clear thatunless a responder causes damage by virtue of its grossnegligence or willful misconduct, it should not be heldliable for penalties or pollution damages.

The naturally occurring questions are “what is negligence,what is gross negligence, and what is the difference?” Inpractice, unfortunately, the difference between plain negli-gence and gross negligence, however they may be defined,never gave a claimant’s attorney much pause. If the facts ofthe case are such that extra harm was somehow actuallycaused by the activities of the responder, the responder islikely to be sued. The responder would end up incurringattorney’s fees and its underwriters/insurers would be pres-sured for settlement based upon the risk that a judge mightconsider the responder’s conduct to have risen to a degreeof negligence sufficient to overwhelm the immunity. Suchhas occurred in the Deepwater Horizon situation where oneof BP’s primary contracted response companies found itselfsued by numerous claimants despite the immunity providedby the terms of OPA. It has taken some amount of legaleffort and expense to establish to the satisfaction ofclaimant’s counsel that there was no gross negligenceinvolved in that contractor’s operations, and some claimantshave not yet been convinced. It is in the nature of law prac-tice for there to be a good deal of inertia established once a

liabilities of responders. The ancient maritime codes providedmotivation for strangers to render assistance to vessels indanger at sea by allowing them to sue for an award of someappropriate percentage of the value of the property saved.So-called “pure” salvage requires not only that the salvageeffort be successful, but that it be undertaken on a strictlyvoluntary basis. The law is clear, however, that the moral orlegal obligation to render assistance to persons in peril at seadoes not make a salvor’s efforts non-voluntary. In otherwords, those who act under compulsion of the federalstatutes are deemed to be volunteers in regards to salvageunless there is some other particular legal or contractualduty that pre-existed, such as the duty of a master to takecare of his own crewmen or passengers or the duty of a tow-ing contractor to safeguard a vessel being towed. A salvagecontract, such as the famous Lloyd’s Open Form, obviouslydoes not nullify the right to collect a salvage award, butmerely supplants the voluntary element with an agreementbetween the parties. Once again, however, a salvor has anobligation to render assistance in a reasonable seaman-likemanner or risk liability for harm caused by his efforts.

Salvage decisions have taken into account any damagecaused by the salvor’s efforts in determining the nature orthe extent of an award. An admiralty court has broad discre-tion within certain recognized parameters to determine thesize of an award and to therefore either diminish or do awayentirely with the right to an award depending upon theextent of harm caused by the salvor and the degree of hisnegligence. The types of damages that could be awardedagainst a negligent salvor would include excess harm to the

THOMAS H. BELKNAP, JR.PARTNER

TBelknap@BlankRome.com

DUNCAN C. SMITHPARTNER

Smith-D@BlankRome.com

Tom Belknap TBelknap@BlankRome.com

Jeanne Grasso Grasso@BlankRome.com

Jeremy Harwood JHarwood@BlankRome.com

John Kimball JKimball@BlankRome.com

Greg Linsin Linsin@BlankRome.com

Peter Mills PMills@BlankRome.com

Jeff Moller Moller@BlankRome.com

Richard Singleton RSingleton@BlankRome.com

Duncan Smith Smith-D@BlankRome.com

Jon Waldron Waldron@BlankRome.com

Alan Weigel AWeigel@BlankRome.com

Washington, DC +1.202.772.5800

New York +1.212.885.5000

Philadelphia +1.215.569.5500

Asia +852.3528.8300

In the event of an incident, please contact any member of our team:

JONATHAN K. WALDRONPARTNER

Waldron@BlankRome.com

Notes From The Editor: Another YearBY THOMAS H. BELKNAP, JR.

Maritime Responder (continued from page 9)

Due Process IssuesIn addition to conflicting views about the role of custom-

ary international law in defining piracy in U.S. courts, JudgeJackson and Judge Davis also reached different conclusionsabout potential due process implications. Both judgesaddressed the issue of whether a law that changes over timeis by nature unconstitutionally vague. According to JudgeJackson, if the court were to allow the definition of piracy toevolve over time, individuals “would be required to constantlyguess” what conduct constitutes piracy under § 1651. This“guessing” would not provide a potential defendant withadequate notice of whether certain conduct violates thestatute. Judge Jackson noted that this concern is heightenedunder the present circumstances, where liability under thestatute carries a mandatory life sentence.

On the other hand, Judge Davis found that the very factthat § 1651 incorporates the definition of piracy under thelaw of nations provides potential defendants with notice ofwhat conduct constitutes piracy. Individuals have fair warningthat piracy is defined by the internationally accepted normsand standards captured in UNCLOS.

All concerned await the Fourth Circuit’s ruling with greatinterest. n

1. United States v. Said, 2010 U.S. Dist. LEXIS 106050, No. 10-cr-00057(E.D.Va. Aug. 17, 2010).

2. United States v. Hasan, 2010 U.S. Dist. LEXIS 115746, No. 10-cr-0056(E.D.Va. Oct. 29, 2010). This decision has led to the first U.S. piracy trialin almost 150 years. The last piracy case tried in a U.S. court was UnitedStates v. Baker, 24 F. Cas. 962 (C.C.S.D.N.Y. 1861).

3. The last piracy conviction in a U.S. court was United States v. Smith, 18U.S. 153 (1820).

defined piracy under the law of nations as robbery or“forcible depredation” on the sea. Judge Jackson also reiter-ated the government’s failure to provide any concrete examples as to when a U.S. court has accepted a moreexpansive definition of piracy than Smith.

Judge Davis also relied on Smith, but reached a differ-ent conclusion about the definition of piracy. In contrast toJudge Jackson, Judge Davis construed the Smith case asleaving open the possibility of a more expansive definition ofpiracy. While Smith was “a classic case of piracy” involvingrobbery, Judge Davis explained there is no evidence theSmith court intended to announce an exhaustive definitionof piracy. In his view, by incorporating the definition of piracyunder the law of nations, the drafters of 18 U.S.C. § 1651contemplated an evolving definition of the crime of piracy.

Analyzing the language of § 1651, Judge Davis empha-sized that the statute explicitly incorporates the definition of“piracy as defined by the law of nations.” The “law ofnations,” or customary international law, is widely acceptedas a changing body of law determined by international con-sensus. In considering sources of customary internationallaw, Judge Davis looked to the definition of piracy set forthin the United Nations Convention on the Law of the Sea(“UNCLOS”). With 161 state signatories and internationalacceptance, Judge Davis reasoned that UNCLOS exemplifiescustomary international law. Under UNCLOS, “any illegal actof violence or detention” against another ship, committedfor private ends on the high seas, constitutes piracy.

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What is Piracy? (continued from page 1)

President Obama Announces a New OceanPolicy and Framework for Mapping the EEZBY JOAN M. BONDAREFF

On July 19, 2010, PresidentObama issued an Executive Order(E.O. 13366) establishing a newOcean Policy Council and new OceanPolicy for the United States, and at thesame time, released a final reportelaborating on the Policy and creatinga comprehensive regional structureand process for Coastal and Marine

Spatial Planning. The Policy is the result of a one-year inter-agency study and public comment period. TheAdministration expects draft Coastal and Marine SpatialPlans (“CMSPs”) to be submitted in two years and becomeeffective by 2015. Stakeholders will be involved at theregional planning level.

New Ocean PolicyThe new National Ocean Policy announced by the

President includes the following statement of goals: • protect, maintain, and restore the health and biologi-

cal diversity of ocean, coastal, and Great Lakes eco-systems and resources;

• improve the resiliency of the aforementionedcommunities;

• bolster the conservation and sustainable uses of landto improve the aforementioned ecosystems;

• use the best available science to inform decisions, andenhance humanity’s capacity to respond to a changingglobal environment;

claim is committed to paper. A claimant’s lawyer had an obli-gation to make sure his allegations were well-founded tobegin with and finds himself in an embarrassing position toexplain the retraction of the claim to the court and his client.

Clearly, the maritime law has seen fit to motivate and,under certain circumstances, even to compel mariners tocome to the aid of others in distress at sea. No such obliga-tion exists if the responder would be putting his own crew,passengers, or vessel in serious danger. But, liability willensue and salvage awards could be lost or diminished if theresponder/salvor does not undertake the assistance effort ina reasonable and seaman-like manner. n

This article originally appeared in the November2010 edition of Maritime Reporter. Reprinted with per-mission from Maritime Reporter.

JOAN M. BONDAREFFOF COUNSEL

Bondareff@BlankRome.com

• support sustainable uses of the ocean, coasts, andGreat Lakes;

• respect and preserve our Nation’s maritime heritage;• respect international law, including preservation of

navigational rights and freedoms;• increase scientific understanding of the above eco -

systems;• improve our understanding of changing environmen-

tal conditions, trends, and their causes; and• foster a public understanding of the value of the

ocean, our coasts, and the Great Lakes.While balanced development is promoted, the new pol-

icy encourages all permitting decisions to be based on the“precautionary principle” (of the Rio Conference).

National Ocean CouncilAs part of the President’s announcement, he also created

a new inter-agency National Ocean Council (“Council”). TheCouncil will be co-chaired by Nancy Sutley, the Chair of theWhite House Council on Environmental Quality and John P.Holdren, the Director of the White House Office of Scienceand Technology Policy. Other members of the Councilinclude the Secretaries of Agriculture, Commerce, Defense,Energy, Health and Human Services, Homeland Security,the Interior, State, Transportation, Justice and Labor; theAdministrators of the Environmental Protection Agency, theNational Oceanic and Atmospheric Administration, and theNational Aeronautics and Space Administration; theChairman of the Joint Chiefs of Staff; the Director of theNational Science Foundation; and assorted White Houseenvironment and energy czars.

The role of the new Council is to oversee the implemen-tation of the Ocean Policy, above, through the development ofstrategic action plans; facilitation and implementation ofCMSPs, described below; and coordination of an annualbudget establishing ocean priorities for Federal agency mem-bers of the Council.

The Council has convened and sent nomination requestletters to state and tribal officials to select the 18 membersof a new Governance Coordinating Committee.

Marine Spatial Planning–Zoning in the EEZ?The guts of the final report is to create a system of

regional CMSPs, surrounding all coasts of the U.S., its territo-ries, and Great Lakes, for the purpose of permitting uses ofthose waters, and resolving conflicts among overlapping andsignificant uses of the marine environment, including aqua-culture, commerce and transportation, commercial fishing,marine sanctuaries, mining, oil and gas exploration and

(continued on page 12)

What is Piracy?BY JOHN D. KIMBALL AND DEEPA PADMANABHA

Two United States district judges in theEastern Di strict ofVir ginia handling near -ly iden tical criminalcharges against accus -ed Somali pirates havedisagreed on whatacts constitute piracy.

The cases involve separate armed attacks on United StatesNavy ships, the USS Ashland and the USS Nicholas. In bothcases, accused Somali pirates fired at the vessels, but wereunsuccessful in capturing them. Instead, the accused pirateswere captured and brought to Virginia to stand trial on numer-ous criminal charges, including piracy. In both cases, defensecounsel moved to dismiss the piracy count of the indictmentson the grounds that merely shooting at the vessels was not,in itself, an act of piracy.

In a decision issued in August 2010, Judge RaymondJackson dismissed the piracy count, holding that underUnited States law, merely shooting at a vessel is not piracy.1 Ina more recent opinion issued on October 29, 2010, however,Judge Mark Davis disagreed and denied defendants’ motionbased on his interpretation of the definition of piracy underthe law of nations.2 Judge Davis held that, as a matter of law,attacking a vessel is piracy even if the vessel and crew arenot captured.

Judge Jackson’s decision is now on appeal to the FourthCircuit and the trial of the accused pirates on other chargeshas been deferred pending the appeal. The decision byJudge Davis led to the first piracy conviction in almost 200years.3 The convicted pirates, however, no doubt will appealto the Fourth Circuit.

A Place for CustomaryInternational Law in U.S. Courts?

Judge Jackson and Judge Davis’ different rulings turn ontheir disagreement about the definition of piracy. But theirconflicting interpretations also bring up a larger questionabout the role of customary international law in U.S. courts.While both judges acknowledged the evolving nature of cus-tomary international law, they reached different conclusionsabout how this changing body of law impacts the crime ofpiracy in U.S. courts.

Judge Jackson held that the changing nature of custom-ary international law demonstrates the unsettled definitionof piracy in the international sphere. Judge Jackson focusedhis opinion on the Supreme Court’s definition of piracyunder 18 U.S.C. § 1651 as announced in the 1820Supreme Court case of United States v. Smith. According tohis interpretation of the case, the Supreme Court explicitly

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CONTENTSPAGE

What is Piracy? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Notes From The Editor: Another Year . . . . . . . . . . . . . . . . . .3

A Look Over the Horizon: Oil Spill Legislation . . . . . . . . . .3

No End to Rough Seas for Iran as Sanctions . . . . . . . . . . . .6Pressure Continues to Build

Maritime Responder Obligations and Liability . . . . . . . . . . .9

President Obama Announces a New OceanPolicy and Framework for Mapping the EEZ . . . . . . . . . . .11

© 2010, BLANK ROME LLP. Notice: The purpose of this newsletter is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized fromvarious sources, the accuracy and completeness of which cannot be assured. The Advisory should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel. Additionalinformation on Blank Rome may be found on our website www.blankrome.com.

Watergate • 600 New Hampshire Ave., NW • Washington, DC 20037 • 202.772.5800

MAINBRACEMAINBRACE www.BlankRomeMaritime.com

December 2010 No. 4

To learn more about how Blank Rome can help your business, please go to www.BlankRomeMaritime.com.

(continued on page 2)

development, ports and harbors, recreational fishing, militaryactivities, subsistence uses, and tourism, among others. TheAdministration takes the position that existing laws permitthem to create a national system of CMSPs without specify-ing those authorities.

The geographic scope of the planning area includes theU.S. territorial sea, the 200-mile Exclusive Economic Zone,and the Continental Shelf. The planning area would extendgenerally landward to the mean high-water line, but uplandsmay also be included. In the Great Lakes, the boundarywould extend from the ordinary high-water mark andinclude the lakebed, subsoil, and water column to the limitof the U.S. and Canadian international boundary.

The nation is divided into nine regions(and corresponding states) for purposesof developing the CMSPs:

1. Alaska/Arctic Region:Alaska

2. Caribbean Region:Puerto Rico and U.S. Virgin Islands

3. Great Lakes Region:Illinois, Indiana,Michigan, Minnesota,New York, Ohio,Pennsylvania, andWisconsin

4. Gulf of Mexico Region:Alabama, Florida,Louisiana, Mississippi, andTexas

5. Mid-Atlantic Region: Delaware,Maryland, New Jersey, New York,Pennsylvania*, and Virginia

6. Northeast Region: Connecticut, Maine,Massachusetts, New Hampshire, Rhode Island, andVermont

7. Pacific Islands Region: Hawaii, Commonwealth ofthe Northern Mariana Islands, American Samoa, andGuam

8. South Atlantic Region: Florida, Georgia, NorthCarolina, and South Carolina

9. West Coast Region: California, Oregon, andWashington

* Pennsylvania is included twice because it is both acoastal and Great Lakes state.

Padmanabha@BlankRome.com

JOHN D. KIMBALLPARTNER

Kimball@BlankRome.com

The CMSPs are to be submitted to the Council forreview of their consistency with the National Ocean Policy.Following a 30-day public comment period, the Councilwould certify each plan, and Federal, State, and Tribal repre-sentatives would co-sign the plan and agree to implement it,consistent with existing laws and regulations.

The first CMSP is expected to be submitted to theCouncil for certification in two years, with all plans submittedand certified by mid-2015. An inter-agency working group iscurrently designing a National Coastal and Marine SpatialPlanning Workshop.

Conclusions and Next StepsThe success of the new Ocean Policywill depend on the success of the

coastal and marine spatial plan-ning process. This will

depend, in turn, on the will-ingness of state, local,

and tribal governmentsto participate and com-mit to a joint decision-making process forpermitting marineactivities, as well asthe resources that therespective govern-

ments can commit tothe process. The plans

are not expected to super-sede existing laws on which

governments base their deci-sions. But, if adopted and certified,

they may provide a useful, even pre-dictable, road map for future offshore develop-

ment, including, wind, renewable energy, transportation,commercial and recreational fisheries, etc.

Commercial and recreational users of the marine envi-ronment are encouraged to participate in regional advisorycommittees and attend the CMSP Workshop so that theirrespective maritime interests are not adversely affected.

Implementation of E.O. 13366 can be followed atwww.whitehouse.gov/oceans. n

DEEPA PADMANABHAASSOCIATE

New Ocean Policy (continued from page 11)