PART 355—REQUIREMENTS FOR ESTABLISHING UNITED STATES CITIZENSHIP

Chapter II—Maritime Administration, Department of Transportation › Subchapter J—Miscellaneous

§ 355.1 General.

(a) Under 46 U.S.C. 50501, no corporation is deemed to be a citizen of the United States unless:

(1) It is organized under the laws of the United States or of a State, Territory, District, or possession thereof;

(2) Its president or other chief executive officer, and the chairman of its board of directors are citizens of the United States, and no more of its directors than a minority of the number necessary to constitute a quorum are non-citizens; and

(3) The controlling interest therein is owned by citizens of the United States or, in the case of a corporation operating any vessel in the coastwise trade, on the Great Lakes, or inland lakes of the United States, 75 per centum of the interest in such corporation is owned by citizens of the United States.

(b) As used in this part, the term primary corporation includes, but not exclusively, participants in certain transactions or programs under title 46 of the U.S. Code, such as Owner Trustees and certain vessel owners and contractors under 46 U.S.C. 53102 or Capital Construction Fund holders under 46 U.S.C. 53501 et seq.

(c) To satisfy the statutory requirements, an Affidavit of U.S. Citizenship of a primary corporation by one of its officers duly authorized to execute such Affidavit, should be submitted. This Affidavit should contain facts from which the corporation's citizenship can be determined.

§ 355.2 Evidencing U.S. citizenship; affidavit guide.

In order to establish that a corporation is a citizen of the United States within the meaning of 46 U.S.C. 50501, as amended, the form of affidavit to be used as a guide is hereby prescribed for execution on behalf of the primary corporation and filing with an application or, if required, subsequent filing within 30 days after the annual meeting of the stockholders (if the primary corporation is a wholly owned subsidiary and contrary to the bylaw provision does not hold the annual meeting of stockholders, the subsequent filing should be annually and related to the date of the original filing) as evidence of the continuing U.S. citizenship of a filing entity:

Affidavit of U.S. Citizenship (NAME OF CORPORATION) State of _________) 　　　　　　　　　) ss.: County of ________) I, (Name), of (Physical residence address, city, and state), being duly sworn, depose and say: 1. That I am the (Title of office(s) held) of (Name of Corporation), a corporation organized and existing under the laws of the State of _____ (hereinafter called the “Corporation”), with offices at (Business address), in evidence of which incorporation a certified copy of the Articles or Certificate of Incorporation (or Association) is filed herewith (or has been filed) together with a certified copy of the corporate Bylaws. [Evidence of continuing U.S. citizenship status, including amendments to said Articles or Certificate and Bylaws, should be filed within 30 days after the annual meeting of the stockholders or annually, within 30 days after the original affidavit if there has been no meeting of the stockholders prior to that time.]; 2. That I am authorized by and on behalf of the Corporation to execute and deliver this Affidavit of U.S. Citizenship; 3. That the names of the Chief Executive Officer, by whatever title, Vice Presidents or other individuals who are authorized to act in the absence or disability of the Chief Executive Officer, by whatever title, the Chairman of the Board of Directors, and the Directors of the Corporation are as follows: Name Title Citizen of the United States Name Title Yes/No [Note: The foregoing list should include the officers, whether or not they are also directors, and all directors, whether or not they are also officers] and that each of said individuals is a citizen of the United States by virtue of birth in the United States, birth abroad of U.S. citizen parents, by naturalization, by naturalization during minority through the naturalization of a parent, by marriage (if a woman) to a U.S. citizen prior to September 22, 1922, or as otherwise authorized by law, except (give name and nationality of all Non-Citizen officers and directors, if any); however, the By-laws of the Corporation provide that (Number) of the directors are necessary to constitute a quorum; therefore, the alien directors named represent no more than a minority of the number necessary to constitute a quorum; [Select and complete the applicable paragraph 4 describing the Corporation's stock ownership and strike inapplicable paragraphs 4] 4. Information as to stock, where a non-publicly traded Corporation has 30 or more stockholders: That I have access to the stock books and records of the Corporation; that said stock books and records have been examined and disclose (a) that, as of (Date), the Corporation had issued and outstanding (Number) shares of (Class or series), the only class or series of stock of the Corporation has issued and outstanding [if such is the case], owned of record by (Number) stockholders, said number of stockholders representing the ownership of the entire issued and outstanding stock of the Corporation, and (b) that no stockholder owned of record as of said date five per centum (5 percent) or more of the issued and outstanding stock of the Corporation of any class. [If different classes or series of stock exist, give the same information for each class or series issued and outstanding, showing the monetary value and voting rights per share in each class or series. If there is an exception to the statement in clause (b), the name, address, and citizenship of the stockholder and the amount and class or series of stock owned should be stated.] That the registered addresses of (Number) owners of record of (Number) shares of the issued and outstanding (Class or series) stock of the Corporation are shown on the stock books and records of the Corporation as being within the United States, said _____ shares being _____ per centum (_____ percent) of the total number of shares of said stock (each class or series). [The exact figure as disclosed by the stock books of the corporation must be given and the per centum figure must not be less than 65 per centum, except that for a corporation operating a vessel in the coastwise trade, the per centum figure must be not less than 95 per centum. These per centum figures apply to corporate stockholders as well as to the primary corporation.] (The same statement should be made with reference to each class or series of stock, if there is more than one class.) 4. Information as to stock, where Corporation's shares are publicly traded on a U.S. stock exchange: That the Corporation has diligently employed, administered, and adhered to methods such as those identified at 46 CFR 355.3(d) to monitor the Corporation's stock ownership. [In the case of Corporation seeking to demonstrate controlling interest ownership (greater than 50 percent U.S. Citizen ownership) use the following]: That, based on the foregoing, the percentage of shares of the Corporation owned by U.S. citizens eligible to document vessels in their own right is greater than 50 per centum. [In the case of a Corporation seeking to demonstrate eligibility for a coastwise endorsement (at least 75 percent U.S. ownership), use the following]: That, based on the foregoing, the percentage of shares of the Corporation owned by U.S. citizens eligible to document vessels in their own right is 75 percent or greater. 4. Information as to stock, where Corporation has less than 30 stockholders: That the information as to stock ownership, upon which the Corporation relies to establish that the required percentage 1 of the stock ownership is vested in Citizens of the United States, is as follows: 1 75 percent if Corporation is operating in the coastwise trade, on the Great Lakes, or on bays, sounds, rivers, harbors, or inland lakes of the United States; and controlling interest if Corporation is operating solely in the foreign trade, both terms as defined in 46 U.S.C. 50501. Name of Stockholder Number of shares owned(each class) Percentage of shares owned(each class or series) Name Number and Class Number and Class and that each of said individual stockholders is a Citizen of the United States by virtue of birth in the United States, birth abroad of U.S. citizen parents, by naturalization during minority through the naturalization of a parent, by marriage (if a woman) to a U.S. citizen prior to September 22, 1922, or as otherwise authorized by law. 5. That the controlling interest (or 75 percent of the interest) 2 in (each) said Corporation, as established by the data hereinbefore set forth, is owned by citizens of the United States; that the title to a majority (or 75 percent) of the stock of (each) said Corporation is vested in Citizens of the United States free from any trust or fiduciary obligation in favor of any person not a citizen of the United States; that such proportion of the voting power of (each) said Corporation is vested in citizens of the United States; that through no contract or understanding is it so arranged that the majority (or more than 25 percent) of the voting power of (each) said Corporation may be exercised, directly or indirectly, on behalf of any person who is not a Citizen of the United States; and that by no means whatsoever, is control of (each) said Corporation (or any interest in said Corporation in excess of 25 percent) conferred upon or permitted to be exercised by any person who is not a citizen of the United States; and 2 Strike inapplicable language. 6. That affiant has carefully examined this Affidavit and asserts that all the statements and representations contained therein are true to the best of their knowledge, information, and belief. Dated: ______ (Name and title of affiant) Penalty for False Statement: A fine or imprisonment, or both, are provided for violation of the proscriptions contained in 18 U.S.C. 1001 (see also, 18 U.S.C. 286, 287).

§ 355.3 Criteria to be applied in support of stock data in affidavit.

(a) The same criteria should be observed in obtaining information to be furnished for stockholders named (direct ownership of required percentage of shares of stock of each class or series) in the Affidavit as those observed for the primary corporation. If, on the other hand, the “fair inference rule” is applied with respect to stock ownership (see Collier Advertising Service, Inc. v. Hudson River Day Line, 14 Fed. Supp. 335), the extent of U.S. citizen ownership of stock should be ascertained in the requisite percentage (65 percent for foreign operation and 95 percent for coastwise operation) in order that the veracity of the statutory statements made in the Affidavit (paragraph 5) (see § 355.2) may be relied upon by the Maritime Administration (MARAD).

(b) When applying the fair inference rule (where there are more than 30 stockholders, except where one or more of such number actually owns the controlling or 75 percent interest) in order to prove U.S. citizen ownership in the required percentages:

(1) For non-publicly traded corporations:

(i) For foreign operation, 65 percent of the shares of stock of each class or series must be shown to be held by persons with registered addresses within the United States to prove that 51 percent or controlling interest is vested in citizens of the United States; and

(ii) For coastwise operation, 95 percent of the shares of stock of each class or series must be shown to be held by persons having registered addresses within the United States to prove that 75 percent of the interest in the corporation is vested in citizens of the United States; and

(2) For publicly traded corporations:

(i) At least 95 percent of the stock (each class) of the corporation be held directly or beneficially by Persons having a U.S. address in order to infer at least 75 percent ownership by U.S. Citizens; or

(ii) At least 65 percent of the stock (each class) of the corporation be held directly or beneficially by Persons having a U.S. address in order to infer at least 51 percent ownership by U.S. Citizens; and

(3) For determining the requisite percentage of stockholders with U.S. addresses, the corporation may rely on the methods outlined in paragraph (d) of this section; and

(c) If the primary corporation is consecutively owned by several “parent” corporations (holders of 100 percent of the stock of each or all classes or series of stock issued and outstanding), the facts should be given in proper sequence either by chart or in narrative form, revealing the facts of stock ownership. The information with respect to the ultimate parent should include data relative to the basis upon which controlling or 75 percent (depending upon whether the primary corporation operates in the domestic or foreign commerce) is established, together with the names of the owners of record or beneficial owners of 5 percent or more of each class or series of stock, if more than one class or series, and a statement that such owners are citizens of the United States. In any case where different classes or series of stock exist, each class or series will be treated depending upon whether “closely held” or “publicly held,” individually in applying the fair inference rule, if applicable, or giving the relevant information with respect to United States citizens owning of record 51 percent or 75 percent of the interest.

(d) If the corporation is publicly traded, the corporation may employ the following methods to measure, monitor, determine, and affirm the required percentage U.S. citizen share ownership for the primary corporation:

(1) Use of the Depository Trust Company segregated account (or “SEG-100”) system;

(2) Monitoring SEC filings for 5 percent holders (Schedules 13D, 13G, Form 13F) and follow-up requests for information from filers;

(3) Use of protective provisions in organizational documents in order to guard against and rectify the possibility of what are referred to as excess shares;

(4) Communications with Non-Objecting Beneficial Owners (or “NOBOs”);

(5) Geographic surveys or statistical analyses of shareholder residences;

(6) Use of dual stock certificates; and

(7) Alternative methods upon written MARAD approval.

§ 355.4 Changes in citizenship data.

(a) It is incumbent upon the party filing an affidavit under this part to apprise MARAD promptly in writing relative to changes in data last furnished with respect to officers, directors, and stockholders holding 5 percent or more of the issued and outstanding stock of each class or series, together with statements concerning the citizenship status thereof.

(b) If the information contained in a party's most recent affidavit of citizenship filing has not changed materially, as an alternative to submitting an annual affidavit of citizenship under this part, a party may file a certification with MARAD. The certification should be substantially in the following format:

“I, , [Title] of [Name of Corporation] (“Corporation”), being duly authorized by the Corporation, certify to you that there have been no changes to the ownership information contained in the Affidavit of Citizenship filed with the Maritime Administration on [DATE].”

§ 355.5 Additional material.

If additional material is determined to be essential to clarify or support the evidence of U.S. citizenship, such material must be furnished by the primary corporation upon request by MARAD.