VES-3-07-CO:R:P:C 110127 GV

Thomas L. Mills, Esq.
Dyer, Ellis, Joseph & Mills
Watergate Suite 1000
600 New Hampshire Avenue, NW.
Washington, D.C. 20037

RE: Request for ruling as to provisions of 46 U.S.C. App. 883

Dear Mr.Mills:

This is in reference to your letter of March 29, 1989, withdrawing your ruling request of March 21, 1989, requesting a ruling as to whether certain activities of a foreign-flag barge are in compliance with 46 U.S.C. App. 883.

FACTS:

Your client operates a towing operation in a United States port which serves vessels engaged in the foreign trade, specifically the export of chemicals. Because of a temporary shortage of shoreside chemical storage facilities, the client proposes to have the chemicals loaded onto a foreign-flag barge, which it owns. The subject barge would then be put to use in any of the two following alternatives:

Alternative A:

After loading, the barge will be towed by a U.S.-flag tug to a location within the harbor of the same port within United States territorial waters and will then be anchored or docked at that location. While within the territorial waters, the barge will be a stationary storage facility. Its only movements, except for those described below, will be those necessary for the safety of the vessel.

At some point, a U.S.-flag. tug will tow the barge to a point outside the territorial waters of the United States. While outside the territorial waters of the United States, a foreign flag vessel will lighter the chemicals for a voyage to a foreign port. 2

A U.S.-flag tug will tow the barge back to the same or nearby point at which it was loaded, and any remaining chemicals will be discharged.

Alternative B:

After loading, the barge will be towed by a U.S.-flag tug to a location within the harbor of the same port within United States territorial waters and will then be anchored or docked at that location. The barge will be a stationary storage facility. Its only movements will be those necessary for the safety of the vessel.

At some point, a U.S.-flag tug will tow the barge back to the same or nearby point at which it was loaded and all of its chemical cargo will be pumped from the barge to the shoreside chemical loading facility.

ISSUE:

Whether the use of a foreign-flag barge as a chemical storage facility described in the two alternatives above is incompliance with the provisions of 46 U.S.C. App. 883.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, 883 (46 U.S.C. App. 883), often called the "Jones Act", provides in part, that no merchandise shall be transported between points in the United States embraced within the coastwise laws, either directly or via a foreign port, or for any part of the transportation, 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.

Pursuant to 4.80b, Customs Regulations (19 CFR 4.80b) a coastwise transportation of merchandise takes place, within the meaning of the coastwise laws, when merchandise laden at point embraced within the coastwise laws ("coastwise point") is unladen at another coastwise point, regardless of the origin or ultimate destination of the merchandise.

Points embraced within the coastwise laws discussed above include all points within the territorial waters of the United States, including points within a harbor, as well as artificial islands, installations, and devices permanently or temporarily attached to the seabed of the outer continental shelf for the purpose of exploring for, developing or producing resources therefrom. The territorial waters of the United States consist of the territorial sea, defined as the belt, 3 nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline. - 3 -

In regard to Alternatives A and B, the Customs Service consistently has held that the use of a foreign-flag vessel as a storage facility in United States territorial waters does not violate the coastwise laws, or any other law administered by the Customs Service, provided that the vessel remains stationary. Customs also has held that if the vessel is being loaded or unloaded and must be moved to another location because of stress of weather or other reason involving the vessel's safety, subsequently is returned to the same point to continue its loading or unloading, and loads or unloads no merchandise at any other point in the United States, the coastwise laws are not violated.

We note that in regard to Alternative A, the towing of the barge to a point outside U.S. territorial waters and the subsequent lightering by a foreign-flag vessel is not a movement in the coastwise trade. However, if the barge is to be towed ashore for the discharge of any remaining chemicals, it must be returned to the same point at which it was laded in order to be in compliance with 46 U.S.C. App. 883. If it is to be towed ashore empty, it is not required to return to the point of lading and no violation of said statute will occur.

Accordingly, with respect to Alternative B, when the subject barge is no longer to be used as a storage facility and is towed ashore, it must be returned to the same point ar which it was laded. To return it to any point other than that at which it was laded and then pump the chemical cargo to the shoreside chemical loading facility constitutes a violation of 46 U.C.C. App. 883.

HOLDING:

The use of the foreign-flag barge as a chemical storage facility described in Alternatives A and B does not constitute a violation of 46 U.S.C. App. 883 provided the subject barge, if it is no longer used as such a facility and is towed ashore for unlading either in whole or in part, returns to the same point at which it was originally laded.

Sincerely,

B. James Fritz
Chief
Carrier Rulings Branch