The U.S. Coast Guard has ordered an immediate review of reduced inspection privileges for vessels operated by the Chinese state-owned shipping giant COSCO, days after Germany blocked the company’s acquisition of a Hamburg logistics firm over security concerns.
“In response to concerns regarding China COSCO Shipping Corporation Limited (COSCO) vessels in the Coast Guard’s Quality Shipping for the 21st Century (QUALSHIP 21) safety program, on October 15, 2026, the Commandant directed an immediate review of these vessels’ participation,” a Coast Guard spokesperson told The Epoch Times via email.
The program allows foreign commercial vessels with strong safety and regulatory compliance records to undergo fewer routine inspections at U.S. ports.
The spokesperson said the Coast Guard revised its guidelines in January to expand the circumstances in which vessels may lose those privileges.
“Under the revised guidelines, the Coast Guard expanded the ’special circumstances’ that warrant disenrollment or ineligibility to explicitly include vessel associations with entities subject to U.S. sanctions or other national security concerns,” the spokesperson said.
The review came one day after three House committee chairmen urged the Department of Homeland Security (DHS) to remove COSCO vessels from the program, citing the company’s military ties and allegations of intelligence collection near U.S. and allied coastlines.
A June Pentagon document identified the state-owned company as acting on behalf of China’s People’s Liberation Army and contributing to Beijing’s military-civil fusion program, which uses civilian industries to support military development.
At least 10 COSCO vessels qualified for fewer routine inspections as of July 15, according to the congressional letter. The Coast Guard has not disclosed how many remain enrolled or whether any have lost their privileges.
COSCO denied allegations of intelligence collection in September, saying its onboard equipment was used exclusively for legitimate commercial operations. COSCO did not respond to an Oct. 16 request for comment from The Epoch Times by publication time.
Germany Blocks COSCO Acquisition
On Oct. 7, Germany’s federal government prohibited COSCO from acquiring an 80 percent stake in Konrad Zippel GmbH, a Hamburg-based company that transports shipping containers between seaports and inland destinations.
Germany’s competition authority had cleared the transaction in February, but the government subsequently blocked it under separate investment-security laws.
At an Oct. 7 government press conference, German Economy Ministry spokesperson Tim-Niklas Wentzel said authorities review approximately 300 foreign acquisitions annually and had prohibited only eight under the investment-screening mechanism.
Wentzel said the proposed Zippel acquisition would have deepened existing dependencies and endangered the resilience of supply chains in Germany and the European Union.
The Economy Ministry said it had delivered its prohibition decision to COSCO.
Germany previously restricted COSCO’s proposed 35 percent investment in Hamburg’s Tollerort container terminal to 24.9 percent. The reduced stake was finalized in June 2023.
Wentzel said Germany welcomes foreign investment but can intervene when an acquisition conflicts with its security interests.
Peruvian Oversight of COSCO Port
COSCO faces a separate legal dispute in Peru over the government’s authority to supervise the Chancay port terminal, a major shipping gateway connecting South America with Asia. The terminal is operated by COSCO Shipping Ports Chancay Perú S.A., a joint venture in which COSCO Shipping Ports Limited holds a 60 percent stake through a subsidiary.
The COSCO-operated Chancay port in Peru, where a court ruling in July 2026 upheld the government’s authority to regulate and supervise the Chinese-controlled terminal. Courtesy of the Peruvian State
In July, a Peruvian appeals court overturned an earlier ruling that had restricted oversight of the terminal, affirming the authority of Ositrán, Peru’s government agency responsible for regulating public-use transportation infrastructure, to supervise the port.
The port operator has challenged the agency’s authority to oversee the privately developed terminal and intends to pursue the dispute before Peru’s Constitutional Court.
Verónica Zambrano, president of Ositrán’s board of directors, said the ruling confirmed the agency’s existing legal powers to oversee the port and protect its users.
“The rules never changed, and the ruling confirms the powers the law grants us,” Zambrano said in a July 2 statement.
