ANTI-DRUG ABUSE ACT OF 1986 IS A LEGAL THICKET FOR CARRIERS

Smuggling on ocean vessels continues to be a primary method of importing contraband, including narcotics, into the United States. In past, for this reason, Customs laws require listing on the manifest of all cargo landed in the country so that proper duties are paid.

But one purpose of the law is the suppression of contraband. In 1986, the United States enacted the Anti-Drug Abuse Act to prevent drugs from reaching this country.

Violations are met with heavy fines. Penalties have increased nearly 2000 percent over prior laws, I.E. from $25 for an ounce of marijuana to $500 an ounce. The maximum statutory penalty for heroin or cocaine found on a vessel is $1,000 an ounce. Vessel seizure and forfeiture also are possibilities.

Under the act, when drugs are discovered on a vessel entering U.S. territorial waters, the common carrier can be held liable will not attach if the carrier can demonstrate that neither the owner, operator, master, pilot nor any other employee responsible for maintaining and insuring the accuracy of the cargo manifest knew, or by the exercise of the highest degree of care and diligence could have known, that such substances were on board.

Unfortunately, the act does not define the term, “highest degree of care and diligence.” To date there are only two reported court cases on the issue.

One case, Arca Airlines is on appeal. In the other case, 17 F. Supp. 573 (1936), the carrier unsuccessfully sued to recover a Customs penalty based upon the discovery of un-manifested opium hidden in the base of a foremast. Customs previously had suggested that the foremast manhole be fastened to prevent access to this area. This suggestion was not carried out.

The carrier proved that the open had been inspected during loading and the vessel’s officers thought the cargo, stowed around the mast, made it inaccessible. Furthermore, the ship’s officers searched the ship at loading and examined the crew’s effects.

Despite these efforts, the court focused on the carrier’s failure to implement Customs’ suggestion. It found that the carrier had not used the highest degree of care and diligence to find the drugs. The case illustrates that it may be extremely difficult for a carrier to prevail if Customs can identify some preventive action that could have been taken.

The “highest degree” test imposes a heavy burden. However, it is not a impossible burden. One shipowner recently had $58,848 million in penalties remitted, even though drugs were found in its sealed containers. Customs found that tampered container seals could not have been detected without scrutiny beyond that which would be expected of a carrier exercising the highest degree of care and diligence.

Last January, Customs published proposed regulations that would define the “highest degree of care and diligence.” These regulations have not been finalized.

In 1984, Customs initiated the “Sea Carrier Initiative Agreement” to provide carriers with incentives to initiate security improvements and to enhance their drug smuggling awareness. Implementation of the agreement is considered a significant mitigating factor in Customs penalties. Carriers interested in entering into the agreement may call David Kahne of Customs, at (202)566-9796.

Customs also has developed the “Super Carrier Initiative Agreement” for high-risk carriers that have made significant efforts to prevent smuggling, but have continued to experience difficulties, resulting in penalties. This agreement requires carriers to implement strict measures at foreign and domestic facilities and on their vessels. Carriers interested in this program may call Ernest Cunningham of Customs, at (202) 566-2140

There is little legal literature on the 1986 Anti-Drug Abuse Act. A detailed analysis of the act is contained in the Journal of Maritime Law and Commerce, Vol. 20, No. 3, “The Anti-Drug Abuse Act of 1986: The Ocean Carriers Dilemma” by N. Bayer and E. McClain. See also “Who pays the penalty? – Owners and charterers under the Anti-Drug Abuse Act of 1986” by L. Jacobson in Lloyds Maritime Law N.A. Ed. Vol. 6 No.1.

The Anti-Drug Abuse Act reveals that Customs is attempting to promote an effort with carriers to stop the flow of drugs. It is also evident that Customs is attempting to alleviate the harshness of the act’s penalties with respect to carriers that cooperate in the war on drugs.


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