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Oil Company Will Pay $10 Million for Jones Act Violation


May 1, 2017

An Alaska oil company will pay a $10 million fine assessed by US Customs and Border Protection for violating the Jones Act by using a foreign flagged vessel to transport a jack-up drill rig to Alaska.

Acting US Attorney Bryan Schroder, in announcing the settlement on April 4, said the penalty against Furie Operating Alaska LLC, is the largest Jones Act penalty in the history of the act.

Furie, an Anchorage-based firm whose focus is exploration and production of natural gas and oil in Cook Inlet, agreed to the civil penalty.

Furie was penalized when it transported the Spartan 151 jack-up drill rig from the Gulf of Mexico to Alaska in 2011 using a foreign flagged vessel without acquiring a waiver of the Jones Act from the Secretary of Homeland Security, Schroder said.

The settlement resolves a civil lawsuit filed by Furie in 2012 challenging the assessment of the civil penalty.

The Jones Act, passed in 1920 prohibits a foreign vessel from transporting merchandise between points in the United States. A violation of the Jones Act may result in the assessment of a civil penalty equal to the value of the merchandise. Waivers may be obtained, in limited circumstances, from the Secretary of the Department of Homeland Security when he or she believes it is in the interest of national defense, following a determination that there is no US vessel available to engage in the transport.

Resolution of this case demonstrates that the Jones Act will be actively enforced and that an intentional violation will not be rewarded, Schroder said. The settlement also provides closure to Furie and is designed not to undermine its ability to bring natural gas to market in Southcentral Alaska, he said.


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