Shipping Industry

The Shipping Industry is a very important industry in the CNMI. Because the CNMI is far away from almost all of the main land, most of food and heavy-duty industrial supplies need to be shipped here by plane or by boat. People here can also buy furniture and other products from different places. After Typhoon Yutu, a lot of people are suffering from damages in their homes and businesses. The shipping business become especially important in this special time.

As the CNMI is part of the US, the restriction on importation applies to the mainland US also applies to the CNMI. For example, under the US Federal Food, Drug and Cosmetic Act, importers of food products intended for introduction into US interstate commerce are responsible for ensuring that the products are safe, sanitary, and labeled according to US requirements. FDA regulates a wide range of products, including meat, poultry, egg products, human and veterinary drugs. Importers have to meet the requirements in the FDA all the time.

Under the local law, certain kind of product can only be imported from limited number of places. For example, it is unlawful to import fresh, chilled, frozen and/or unprocessed meat or carcass of any kind, including birds and poultry, from any part of the world into the Commonwealth, except from the continental United States, Hawaii, Guam, Canada, Australia and New Zealand, and any other country, state or territory allowed by the United States Department of Agriculture’s Animal and Plant Health Inspection Service.

Sometimes, in the shipping industry, investors and carriers have to deal with the conflict between local law and federal law. For example, in the CNMI, marijuana has been legalized. However, it is not legalized on the federal level. It is illegal to ship marijuana cross the state line. Operator of the ship must be very careful because the territorial sea of the Commonwealth only have a breadth of 12 miles. If the ship cross the line, it might cause international law issues.

In addition to the restrictions from the governments, investors and owners have to deal with tax problems. If investors can get good advice from professionals, they can obtain certain kinds of tax benefit. For example, upon application to the secretary, any person who imports goods, commodities, resources, or merchandise into the customs territory of the Commonwealth for sale, use, lease or rental and exports them to a buyer outside of the customs territory of the Commonwealth shall be entitled to a refund of tax actually paid on those items, provided however, that such goods, commodities, resources, or merchandise exported were not used, sold, leased or rented within the Commonwealth prior to export.

Commonwealth Port Authority regulates the airport and seaport here. It has its own regulation regarding different kinds of product and shipping method. It also issues licenses, like harbor Pilot’s license, etc. to qualified people. Only people who can get and maintain their license can operate aircraft or vessel based on the regulations. Investors who need to hire people to operate ships and airplanes have to make sure all pilots they have are properly licensed.

Attorneys practicing in the Shipping Industry must have a solid knowledge on import & export law, international law, maritime law and tax law, such as the restriction on importing certain kind of animal production in CNMI.

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