Legal Translation, Business Translation and U.S. Flag Vessels in the Global Economy

Legal document translation, as well as business translation plays an important role each time a U.S. company’s assets are sold to a foreign-owned company, while foreign language interpreters are used during all the stages of negotiations.  Such admiralty laws as the Jones Act – which puts into place strict requirements as to U.S. flag vessels being owned by a U.S. citizen – can create a significant obstacle to international trade and commerce. For example, if a foreign-based corporation buys out a U.S. company involved in shipping, the foreign company will acquire the U.S. company’s assets, including its U.S. flag vessels. However, according to the Jones Act, it is illegal for the foreign company to own and operate these ships.

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This is exactly the scenario that led to the Bowaters exception of the Jones Act. The Bowaters exception is applicable to U.S.-based but foreign-owned manufacturing and mining companies. However, the exception is applicable only to barges or non-self-propelled vessels and tugs with a gross tonnage of less than 500 tons. Further, five requirements must be satisfied by the foreign-owned, U.S.-based company:

  •     A majority of the officers and directors of the corporation must be U.S. citizens;
  •     Not less than 90 percent of the corporate employees must be U.S. residents;
  •     The corporation must be engaged in a manufacturing or mineral industry in the U.S.;
  •     The aggregate book value of the vessels owned by such corporation cannot exceed 10 percent of the aggregate book value of the assets of such corporation; and
  •     The corporation must purchase or produce in the U.S. not less than 75 percent of the raw materials used or sold in its operations.

Needless to say, when such a buy-out is negotiated, it is essential a foreign language interpreter be present during negotiations.  A foreign language translation of a contract that satisfies these requirements also should be provided. Further, the exception also requires the corporation to submit an application to the Coast Guard attesting under oath that all requirements are satisfied – which, depending on the client’s native language – may also require a foreign language translation.

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