§53405 Obligations and Rights Under Operating Agreements

Summary

Require that while a ship is covered by an operating agreement, it must be used only in allowed trades: U.S. foreign commerce, mixed U.S. foreign and domestic trade if a registry endorsement allows it, foreign-to-foreign trade, or under a U.S. government charter. The ship may not be used in coastwise trade except as allowed. The ship must stay documented under chapter 121 until the agreement would end, including agreements ended under section 53404(c)(2). The agreement must call for an annual payment to the program participant, subject to available appropriations under section 53406, and the agreement is a U.S. government contractual obligation to pay up to the actual appropriations. Keep the program participant bound by the national security rules in section 53407 until the agreement would end, and keep any Emergency Preparedness Agreement in effect until that date unless the participant, the Secretary of Transportation, and the Secretary of Defense all agree to change it. A participant may transfer the agreement to an eligible person if the Secretaries of Transportation and Defense agree it is in the United States’ best interest. A participant may replace the covered ship with another eligible ship if the Secretary of Transportation, in coordination with the Secretary of Defense, approves; courts may not review those replacement decisions.