The Federal Maritime Commission (FMC) is conducting a nonadjudicatory investigation to examine whether the vessel flagging laws, regulations, or practices of certain foreign governments create unfavorable shipping conditions in the foreign trade of the United States.
The investigation commences with a 90-day public comment period. The Commission is seeking examples of unfavorable flagging laws, regulations, and practices. As part of the investigation, the Commission will also assess and identify practices that allow or contribute to unsafe conditions which endanger and imperil the reliability and efficiency of ocean shipping
According to FMC, ships registered under flags of convenience (FOC) often operate under weak regulatory oversight, resulting in reduced safety, environmental, and labor standards. These vessels typically hire underpaid, inexperienced crews with little training, compromising onboard safety and increasing the risk of accidents. FOC ships also avoid strict national regulations and inspections, often failing to comply with major maritime conventions such as STCW, SOLAS, and MARPOL. To conceal illicit activities, some disable their Automatic Identification Systems (AIS), spoof GPS data, or use fraudulent IMO numbers, making them difficult to track and increasing the risk of maritime collisions.
These practices enable shipowners to lower costs by skirting labor laws, maintenance standards, and tax obligations. The lack of accountability under FOC registries exposes such vessels to reputational damage, as they are frequently associated with unsafe working conditions, environmental degradation, and illegal operations. Fraudulent registrations further complicate enforcement, with some ships flying flags without the consent or awareness of the relevant maritime authorities. Despite efforts by the IMO to improve transparency, global cooperation remains insufficient, FMC notes.
A related concern is the rise of the “shadow fleet”, vessels that operate outside official maritime systems to engage in activities like sanctions evasion, smuggling, and illegal fishing. These ships often hide ownership through shell companies, turn off AIS, and use fake documentation. Their operations in poorly regulated international waters make enforcement difficult and pose serious risks to global maritime safety, legal compliance, and environmental protection.
The Federal Maritime Commission is authorized to conduct comprehensive investigations and take vigorous enforcement measures when appropriate, including when foreign laws or practices cause unfavorable shipping conditions.
The Commission is particularly interested in receiving comments from individuals and organizations with expertise or experience in vessel operations, international trade, international law, and national security. Examples of such commenters include other governments, international organizations, standards-setting organizations, shipowners, shipping companies, shippers, and organized labor groups.
Recent domestic incidents linked to flags of convenience highlight the urgent need to address these issues.
… the Commission noted in a statement.
Commenters may also identify actions that high-quality registries can take to lower costs and compliance burdens so long as they do not result in diluting standards.
The deadline for submitting comments is August 20, 2025.
