Americas News
U.S. DOJ Alters Third-Party Payment Policy Related to Ship Pollution Penalties
In a move that could prevent those responsible for pollution from ships from making Community Service Payments, the U.S. Department of Justice (DOJ) released a memorandum last week prohibiting the DOJ from entering into any agreement on behalf of the U.S. that would require a party to make a payment or loan to any non-governmental person or entity that is not a party to the dispute.
"It has come to my attention that certain previous settlement agreements involving the Department included payments to various non-governmental, third-party organisations as a condition of settlement with the United States. These third-party organisations were neither victims nor parties to the lawsuits," explained Attorney General Jeff Sessions in the memorandum.
There are three limited exceptions to the new policy, explained the DOJ: "first, the policy does not apply to an otherwise lawful payment or loan that provides restitution to a victim or that otherwise directly remedies the harm that is sought to be redressed.
"Second, the policy does not apply to payments for legal or other professional services rendered in connection with the case. Third, the policy does not apply to payments expressly authorised by statute, including restitution and forfeiture."
Winston & Strawn LLP (Winston & Strawn) says the new policy raises questions related to future plea agreements in cases under the Act to Prevent Pollution from Ships (APPS) and MARPOL in the U.S., which have often included provisions for a Community Service Payment to some specified third-party non profit organisation.
"Since the charges in most APPS/MARPOL cases are for 'failure to maintain oil record book' or 'obstruction of agency proceeding' in connection with alleged improper discharges at sea, the issue of whether a Community Service Payment can be viewed as a payment that 'directly remedies the harm' is open to question," said the lawfirm.
"Likewise, the memorandum does not discuss the relationship of the new policy to the Sentencing Guidelines' provisions for organizational community service payments. Until the policy is clarified, this may become an issue for vessel owners and operators negotiating with the DOJ."
