VES-3-15/VES-3-21 CO:R:P:C 110283 BEW
Mr. Steven B. Chameides
Foley & Lardner
1775 Pennsylvania Avenue, N.W.
Washington, D.C. 20006-4680
RE: Applicability of the coastwise laws to the use of a
foreign-built floating drydock in the territorial waters of
the United States.
Dear Mr. Chameides:
This is in reference to your request for a ruling on the
applicability of the coastwise laws to the use of a foreign-built
floating drydock owned by a shipyard located in a United States
coastal port.
FACTS:
You state that the floating drydock is not self-propelled,
that it is permanently moored to a system of pilings at the
shipyard and is used exclusively to raise vessels from the water
for the purposes of inspection and maintenance and repairs at the
shipyard.
ISSUE:
May a foreign-built floating drydock which is permanently
moored to a system of pilings at a shipyard located in the
territorial waters of the United States be used as a drydock
without violating the coastwise laws?
LAW AND ANALYSIS:
Section 27 of the Act of June 5, 1920, as amended (41 Stat.
999; 46 U.S.C. App. 883, often called the Jones Act), provides,
in pertinent part, that:
No merchandise shall be transported by water, or
by land and water, on penalty of forfeiture of the
merchandise (or a monetary amount up to the value
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thereof as determined by the Secretary of the
Treasury, or the actual cost of the
transportation, whichever is greater, to be
recovered from any consignor, seller, owner,
importer, consignee, agent, or other person or
persons so transporting or causing said
merchandise to 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 other vessel 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 ....
The Customs Service has consistently held that the use of a
non-coastwise-qualified vessel as a permanently moored facility
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 neither loads nor unloads
merchandise at any other point in the United States, the
coastwise laws are not violated.
Although the vessel will not be engaging in coastwise trade
while in operation as a stationary floating drydock, the point
should be made that by virtue of its being anchored within
territorial waters, the vessel itself will become a coastwise
point. The practical effect of this fact is that any vessel
moving merchandise or passengers between the moored barge and
another coastwise point (in either direction), must itself be
documented for the coastwise trade.
Under the circumstances stated above, a foreign-built
vessel not qualified to engage in the coastwise trade can be used
as a permanently moored floating drydock, without violating the
statute. No law or regulation administrated by the United States
Customs Service would preclude the use of the permanently moored
structure as a floating drydock for shipyard maintenance and
repairs.
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HOLDING:
A foreign-built floating drydock may be used as a
permanently moored floating drydock within the territorial waters
of the U.S. without violating the coastwise laws of the United
States.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch