PUBLIC LAW 100-710—NOV. 23, 1988
102 STAT. 4747
"(c) If the trustee at any time does not satisfy the qualifications of subsection (b) of this section, the Secretary shall disapprove the trustee. "(d) Except as provided in subsection (a) of this section, a right under a mortgage of a documented vessel may be issued, assigned, or transferred to a person not eligible to be a mortgagee of that vessel under section 31322 of this title only with the approval of the Secretary. "(e) The vessel may be operated by the trustee only with the approval of the Secretary. "(f) The issuance, assignment, or transfer of an instrument or evidence of indebtedness contrary to this section is void. "§ 31329. Court sales of documented vessels "(a) A documented vessel may be sold by order of a district court only to— "(1) a person eligible to own a documented vessel under section 12102 of this title; or "(2) a mortgagee of that vessel. "(b) When a vessel is sold to a mortgagee not eligible to own a documented vessel— "(1) the vessel must be held by the mortgagee for resale; "(2) the vessel held by the mortgagee is subject to section 902 of the Merchant Marine Act, 1936 (46 App. U.S.C. 1242); and "(3) the sale of the vessel to the mortgagee is not a sale foreign within the terms of the first proviso of section 27 of the Merchant Marine Act, 1920 (46 App. U.S.C. 883). "(c) Unless waived by the Secretary of Transportation, a person purchasing a vessel by court order under subsection (a)(1) of this section or from a mortgagee under subsection (a)(2) of this section must document the vessel under chapter 121 of this title. "(d) The vessel may be operated by the mortgagee not eligible to own a documented vessel only with the approval of the Secretary. "(e) A sale of a vessel contrary to this section is void. "§ 31330. Penalties "(a)(1) A mortgagor shall be fined under title 18, imprisoned for not more than 2 years, or both, if the mortgagor— "(A) with intent to defraud, does not disclose an obligation on a vessel as required by section 31323(a) of this title; "(B) with intent to defraud, incurs a contractual obligation in violation of section 31323(b) of this title; "(C) with intent to hinder or defraud an existing or future creditor of the mortgagor or a lienor of the vessel, files a mortgage with the Secretary of Transportation; or "(D) with intent to defraud, does not comply with section 31321(h) of this title. "(2) A mortgagor is liable to the United States Government for a civil penalty of not more than $10,000 if the mortgagor— "(A) does not disclose an obligation on a vessel as required by section 31323(a) of this title; "(B) incurs a contractual obligation in violation of section 3132303) of this title; "(C) files with the Secretary a mortgage made not in good faith; or "(D) does not comply with section 31321(h) of this title.
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