The bill amends 46 U.S.C. §70022 to create a new category of vessels that the United States may deny entry to or bar from operating in U.S. navigable waters: ships that have transited certain foreign ports that a President designates because a Western Hemisphere free-trade partner nationalized or otherwise effectively expropriated U.S. persons’ port property. The measure adds a presidential designation mechanism, a narrow set of exceptions for emergencies and owner-authorized transits, and criteria for removing a designation once property is returned or adequate compensation is provided.
This is a targeted, extra-judicial leverage tool: it ties access to U.S. ports to the protection or restitution of U.S. persons’ overseas port assets in Western Hemisphere FTA countries. Practically, carriers, terminal operators, importers, federal maritime agencies, and insurers will need new screening procedures to determine whether a vessel’s prior transits trigger the bar or fit within the bill’s exceptions; foreign policy and trade counsel will also need to track presidential designations and the bill’s interaction with FTA arbitration processes.
At a Glance
What It Does
The bill authorizes the President to designate ports, harbors, or marine terminals in Western Hemisphere free-trade partners that have nationalized or effectively expropriated property of U.S. persons, and treats vessels that transited such designated sites as presumptively ineligible to enter or operate in U.S. waters. It creates narrow carve-outs for emergency situations and for vessels explicitly authorized by the U.S. owner to transit the affected facilities, and requires removal of a designation when the underlying conditions—return of property, compensation, or resolution—are met.
Who It Affects
Ocean carriers and ship operators, U.S. port and terminal operators, importers and logistics providers whose cargo may move on affected vessels, maritime insurers and P&I clubs, and federal agencies that enforce port-entry rules (Coast Guard, CBP, Maritime Administration). It also imposes a practical compliance task on law firms and trade counsel who advise on vessel routing and FTA arbitration risks.
Why It Matters
This creates a domestic enforcement lever aimed at reversing or punishing foreign expropriations without invoking sanctions law; it links maritime access to property-restoration outcomes and potentially reroutes commerce. For professionals, it is both a new compliance trigger and a diplomatic instrument that could change routing, liability, and underwriting calculations across regional supply chains.
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What This Bill Actually Does
Congress would revise the statutory conditions under which a vessel may enter, operate in, or transfer cargo at U.S. ports. The text inserts an explicit pathway for the President to identify foreign ports in Western Hemisphere countries that have a free trade agreement with the United States, where an official action by that foreign government amounted to nationalization or an effective expropriation of property owned by a U.S. person.
Once the President makes such a designation, vessels that transited the designated facility become subject to the entry restrictions in U.S. law.
The bill narrows the class of foreign facilities it covers by tying the designation to ports that are only accessible through land “owned, held, or controlled, directly or indirectly, by a United States person” — a fact pattern aimed at cases where U.S. persons control the exclusive landward access to the terminal. The statute also blocks use of the designation procedure where the underlying dispute is already the subject of a pending arbitration under the applicable free-trade agreement, but it otherwise authorizes designation when nationalization, expropriation, or similar actions have occurred.To avoid absolute rigidity, the measure adds two operational exceptions.
First, crews or vessels facing an emergency may enter despite a prior transit. Second, a vessel may be allowed if the owner of the affected facility had explicitly authorized the vessel to transit those facilities.
On the back end, the President must remove a designation if conditions change — for example, if the U.S. person’s property is returned, effective compensation is provided (notably in convertible foreign exchange or mutually acceptable equivalence), or the dispute is otherwise resolved to the President’s satisfaction. These removal grounds create a path for de-escalation tied to restitution or settlement.Implementation will be administrative and evidence-driven: federal authorities enforcing vessel entry will rely on presidential notices (the bill references the Federal Register) and on documentary proof of prior port transits and land-ownership links.
That means shipping companies and logistics professionals will need processes to trace prior port calls, collect documentation of owner-authorized transits, and flag voyages that might intersect with an active presidential designation.
The Five Things You Need to Know
The President may designate a port, harbor, or marine terminal in a Western Hemisphere country with a U.S. free-trade agreement when that government has nationalized or effectively expropriated property of a U.S. person.
Designation is unavailable if the matter is already the subject of a pending arbitration under the relevant free-trade agreement, but otherwise acts as a bar (subject to exceptions) to a vessel’s entry or cargo transfer in U.S. ports.
The bill captures only foreign facilities that were accessible exclusively via land owned, held, or controlled, directly or indirectly, by a U.S. person—targeting facilities where U.S. entities control exclusive access.
Two express exceptions allow entry despite a triggering transit: an emergency involving the vessel or people aboard, and transit expressly authorized by the U.S. owner of the affected facilities.
The President must remove a designation once the conditions prompting it end—return of property, adequate compensation in convertible foreign exchange or equivalent, or another resolution acceptable to the President.
Section-by-Section Breakdown
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Short title
Designates the act as the 'Defending American Property Abroad Act of 2026.' This is a formal label that stakeholders will use in guidance, compliance checklists, and regulatory references.
Adds narrow exceptions to the existing entry bar
The bill inserts a new clause that carves out two circumstances in which a vessel that would otherwise be barred can enter or transit U.S. ports: (i) where the vessel or persons aboard are experiencing an emergency, and (ii) where the vessel was authorized by the owner of the affected facility to transit those facilities. For enforcement agencies, this creates a limited discretion to admit vessels on humanitarian or owner-authorized grounds but places the burden on carriers to document and justify the exception.
Defines the class of covered vessels by prior transit through specified foreign facilities
The bill restructures the prior paragraphing and adds a new subparagraph that captures vessels that transited a port, harbor, or terminal that, at the time, was in a Western Hemisphere FTA country and was accessible only over land controlled by a U.S. person. This wording narrows the universe of facilities to those with an exclusive land-access link to U.S. persons, focusing enforcement on cases where U.S. investments or control over access are central to the dispute.
Authorizes presidential designation when foreign governments nationalize or expropriate U.S. property
The President receives authority to designate specific foreign ports when an agency or official of the foreign government has nationalized, expropriated, or taken actions that have the effect of expropriating the port or exclusive access land. The provision explicitly prevents designation if the same matter is already under pending arbitration under an applicable free-trade agreement, thereby deferring to ongoing treaty dispute-resolution processes before applying this domestic maritime measure.
Conditions for rescinding a designation
The President must remove a designation if he determines the triggering conditions no longer obtain — for instance, if the foreign government returns the U.S. person’s property, provides adequate compensation in convertible foreign exchange or other acceptable equivalent, or otherwise resolves the dispute to the President’s satisfaction. This creates formal exit routes tied to restitution or negotiated settlement rather than indefinite exclusion.
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Who Benefits
- U.S. persons whose port property abroad has been expropriated — the bill provides an additional tool to pressure foreign governments toward restitution or compensation without relying solely on diplomatic channels or sanctions.
- The U.S. executive branch — the President and relevant agencies gain a flexible, non-judicial instrument to respond to expropriations in the Western Hemisphere, enabling rapid designation and removal tied to outcomes.
- Domestic port operators and certain importers — to the extent cargo is rerouted away from designated foreign facilities, some U.S. terminals may capture incremental volume and business from displaced trade flows.
Who Bears the Cost
- Ocean carriers and ship operators — they must build compliance processes to trace prior port calls, verify land-access ownership chains, document owner-authorizations, and re-route voyages where necessary, increasing operational and administrative cost.
- Importers and supply-chain managers — rerouting and denials of vessels can delay deliveries, raise freight costs, and complicate just-in-time logistics, especially for trade routes concentrated in the Western Hemisphere.
- Federal enforcement agencies (Coast Guard, CBP, Maritime Administration) — these agencies absorb the operational burden to enforce designations, review exception claims, and monitor presidential notices, potentially without dedicated new funding.
Key Issues
The Core Tension
The central dilemma is whether to prioritize a flexible, unilateral instrument that increases leverage to recover U.S. private property abroad, or to prioritize predictable, rules-based maritime commerce and deference to treaty arbitration — the bill advances the former at the cost of adding uncertainty, administrative burden, and geopolitical risk to international shipping and trade relations.
The bill creates a novel enforcement tool that sits at the intersection of maritime law, foreign policy, and trade dispute mechanisms. Practical implementation hinges on documentary proof: authorities will need reliable vessel-track records, port-call logs, and evidence about land ownership or control to determine whether a prior transit triggers the entry bar.
Extracting that evidence—especially for indirect or indirect chains of land ownership—could be time-consuming and contested. The statute also defers to FTA arbitration by excluding matters already under pending proceedings, which may encourage strategic timing (either to file arbitration to preclude designation or to delay arbitration to allow domestic pressure to build).
There is also legal and diplomatic risk. Using port-access denial as leverage can prompt retaliation, complicate bilateral relations, and invite litigation under international law or treaty dispute mechanisms.
The bill’s removal standard—adequate and effective compensation in convertible foreign exchange or other mutually acceptable equivalence—is inherently judgmental and vests considerable discretion in the President, which could lead to claims of inconsistency or politicization. Finally, the emergency and owner-authorization exceptions are operationally sensible but will require agencies to create procedures for rapid verification to avoid both abuse and harmful delays in genuine emergencies.
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