A 3-year-old law has failed to keep U.S. fishing boats under American ownership because of the way the Coast Guard interprets the legislation, according to the General Accounting Office.

The GAO report suggested that Congress "may wish to consider changes" to the Anti-Reflagging Act.

The act was passed in 1987 to establish more stringent requirements for making a vessel legally under American control and thus eligible for the priority given U.S. fishermen and vessels on fish quotas in coastal waters within the 200-mile territorial limit.

Under previous law, the requirements could be met even though a company's stock was totally owned by foreigners.

The 1987 act required that the controlling interest in the vessel, as measured by a majority of voting stock, be owned by U.S. citizens.

It also laid down a number of new requirements but contained several "grandfather" clauses to protect the financial interests of owners who had become involved in U.S. fisheries under the previous law.

The GAO said the Coast Guard's interpretation "means that the vessel can be bought and sold repeatedly without losing fishery privileges, regardless of whether the new owner is a corporation with totally foreign-owned voting stock or other arrangements that offer potential for foreign control."