VES-3-15 CO:R:P:C 109817 DHR/PH
J. Patrick Beauchamp
Phelps, Dunbar, Marks,
Claverie & Sims
400 Poydras Street
New Orleans, Louisiana 70130-3245
RE: Operation of a drilling vessel on the outer continental
shelf (OCS)
Dear Mr. Beauchamp:
This is with reference to your letter of October 19, 1988,
concerning the application of the coastwise laws to the
activities of a mobile oil drilling vessel on the OCS.
FACTS:
It is proposed to operate a non-coastwise-qualified mobile
oil drilling vessel on the OCS of the United States. The
vessel will move to various locations on the OCS, anchor to the
seabed and engage in drilling operations.
ISSUE:
Whether the engagement in drilling operations on the OCS
by a non-coastwise-qualified mobile drilling vessel is
prohibited by the coastwise laws.
LAW & ANALYSIS:
The coastwise laws (e.g., 46 U.S.C. App. 289 and 883, 46
U.S.C. 12106 and 12110) prohibit the transportation of
merchandise or passengers between points in the United States
embraced within the coastwise laws in any vessel other than a
vessel built in and documented under the laws of the United
States and owned by persons who are citizens of the United
States. A point in United States territorial waters is
considered a point embraced within the coastwise laws for
purposes of this provision.
- 2 -
Section 4(a) of the Outer Continental Shelf Lands Act of
1953, as amended (43 U.S.C. 1333(a)) (OCSLA), provides, in
pertinent part, that the laws of the United States are extended
to "... the subsoil and seabed of the outer Continental Shelf
and to all artificial islands, and all installations and other
devices permanently or temporarily attached to the seabed,
which may be erected thereon for the purpose of exploring for,
developing, or producing resources therefrom ... to the same
extent as if the outer Continental Shelf were an area of
exclusive Federal jurisdiction located within a State."
Under the foregoing provision, we have ruled that the
coastwise laws are extended to mobile rigs during the period
they are secured to or submerged onto the seabed of the OCS
(Treasury Decision 54281(1)). Subsequent rulings applied the
same principles to drilling platforms, artificial islands, and
similar structures.
The Customs Service, in interpreting the coastwise laws,
has consistently held that a vessel used solely in drilling
operations is not considered to be engaged in the coastwise
trade. Accordingly, the use of the non-coastwise-qualified
drilling vessel under consideration solely for drilling
purposes in United States coastal waters or waters over the OCS
adjacent to the United States would not violate the coastwise
laws, provided that the vessel carried no persons other than
the usual crew and personnel engaged in the drilling operations
and no merchandise other than the usual supplies and equipment
necessary for the drilling operations.
As indicated in the above discussion of the applicability
of the coastwise laws to the United States OCS, the drilling
vessel would be considered a coastwise point while attached to
the seabed of the OCS for the purpose of drilling or exploring
for resources from the OCS. The vessel would be considered to
be so attached to the seabed of the OCS while engaged in
drilling operations and while at anchor before or after
engaging in drilling at that location. Any service vessel
transporting merchandise or passengers between the United
States mainland or any other United States coastwise point and
the vessel while it was considered to be a coastwise point
would be required to be coastwise qualified.
- 3 -
HOLDING:
The engagement in drilling operations on the OCS by a non-
coastwise-qualified mobile drilling vessel is not prohibited by
the coastwise laws, provided that the drilling vessel carries
no persons other than the usual crew and personnel engaged in
the drilling operations and no merchandise other than the usual
supplies and equipment necessary for the drilling operations.
Sincerely,
B. James Fritz
Chief,
Carrier Rulings Branch
CO:R:P:C:DReusch:mr:10/31/88:retyped 11/07/88