VES-3-01/10-02-RR:IT:EC 113927 GEV
Jeanne M. Grasso, Esq.
Dyer, Ellis & Joseph
Watergate, Suite 1000
600 New Hampshire Ave., N.W.
Washington, D.C. 20037
RE: Dredging; Coastwise Trade; Incidental Cable-Laying
Operations; Cable Clearance;
Pre-Lay Grapnel Run; 46 U.S.C. App. 292, 883
Dear Ms. Grasso:
This is in response to your letter of April 28, 1997,
enclosing Exhibits A-D, on behalf of your client, Cable &
Wireless Marine ("CWM"), requesting a ruling that certain
operations incidental to the installation of subsea cable do not
run afoul of the coastwise laws. Our ruling is set forth below.
FACTS:
CWM will perform submarine cable installation work on the
Gemini Cable System. The Gemini System consists of two Atlantic
crossings - Gemini South and Gemini North, which are scheduled to
be installed during the summer of 1997 and winter of 1997/1998,
respectively. The southern link is from Manasquan, New Jersey to
Porthcurno, UK and the northern link is from Greenhill, Rhode
Island to Oxwich Bay, UK. The installation work is to be done by
the CABLE VENTURE, CWM's self-propelled cable ship.
Prior to commencing the installation operation, CWM will
conduct an out-of-service cable clearance operation at specific
identified locations along the previously-surveyed ploughing
route and a pre-lay grapnel run ("PLGR") operation along the
entire route. Out-of-service cable clearance involves deploying
a submarine grapnel (specifications of which are depicted in
Exhibit A), the type of which depends on seabed conditions, to
pick up out-of-service cable that may interfere with cable burial
operations. The grapnel may penetrate the seabed up to .3 meters
in search of out-of-service cable. Several runs may be necessary
for older cables; the grapnel typically picks up newer cables
within two runs. Where the out-of-service cable is perpendicular
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to the new cable route, the grapnel will pick up the old cable
and bring it to the surface where a segment of cable, at least
1000 meters in length, will be cut and recovered onboard the
vessel. The two ends will be weighted down and returned to the
seabed to lie on either side of the cable route. Where the out-of-service cable runs parallel and within 500 meters of the new
route, it will be necessary to recover longer segments of cable
onboard the vessel. Because of this, out-of-service cable
clearance operations are normally undertaken by cable ships or
flat-back vessels that have been modified to accept cable
recovery equipment and recovered cable. Recovered out-of-service
cable is held on the vessel and discharged ashore.
The purpose of the PLGR operation is to clear uncharted
debris from the cable route that was not detected during the
electronic route survey operation or that has been deposited
since that operation. The PLGR is carried out by a suitable
support vessel, usually a small or medium offshore flat-back
vessel or ocean-going tug, which has sufficient clear deck space
to mount a simple towing spread to deploy the grapnel, and which
can handle and stow any recovered debris. The PLGR operation
involves towing a grapnel, normally at a rate of 1 to 1.5
knots/hour, along the entire length of the route to be ploughed.
The objective is to minimize the risk of the plough becoming
fouled on seabed debris and to avoid any unplanned interruption
to the main ploughing operation, which increases the risk of
damage to the cable and necessitates additional and expensive
post-lay burial work by other types of seabed vehicles. The
grapnel is usually a sliding prong' type, though other types may
be used depending on seabed conditions (additional specifications
for grapnels are set forth in Exhibit B), and may penetrate the
seabed up to a depth of 40 cm and a width of approximately 20 cm.
As the vessel moves along the cable route, the towing tension of
the grapnel is monitored and the grapnel is recovered if the
tension increases, indicating that an obstruction has been
hooked. As a routine matter, the grapnels are recovered and
inspected at minimum intervals of 15 km along the route.
Usually, a single tow is made along the route, but in areas where
other marine activity is high, a second run may be made. A PLGR
typically recovers wire hawsers, ropes, netting, uncharted cables
and other debris associated with fishing activities or offshore
exploration. Recovered debris will be held on the vessel and
discharged ashore.
The CABLE VENTURE cable-ploughing operation will follow the
PLGR vessel for approximately 101 nautical miles toward the
United Kingdom. Beyond the 101 nautical miles, the cable will no
longer be buried but rather be laid on the seabed. Cable-ploughing for Gemini South is scheduled to begin just outside the
territorial sea. Cable-ploughing for Gemini North is currently
scheduled to begin just inside the territorial sea. At present,
the CABLE VENTURE is scheduled to lay the cable along both routes
using a plough and cutting disc (specifications for the CABLE
VENTURE and plough are set forth in Exhibit C).
On completion of the ploughing operation, a post-lay
inspection and burial operation will be carried out in areas
where it was not practical or possible to bury the cable during
the ploughing operation, including the segment where the cable
originally will be spliced, the segments where the plough has to
be lifted over in-use cables along the route, and the segments
where the plough has to be retrieved for maintenance. One of
CWM's remotely operated vehicles
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("ROV") such as MAKO, fitted with a water jetting trenching tool,
will subsequently bury these
segments of cable (specifications for MAKO are set forth in
Exhibit D). The MAKO or other suitable ROV will require the
support of a dynamic positioning ("DP") vessel. Many cable ships
and dive support vessels are DP. The post-lay inspection and
burial operation will normally occur up to one month after the
initial lay.
There are several alternatives on which CWM desires a ruling
in order to retain the maximum flexibility in planning and
implementing this complex, multiple vessel cable-laying
operation.
Out-of-service Cable Clearance - CWM may use either a
foreign-flag or a
coastwise-qualified cable ship or other suitable vessel,
depending on availability,
to perform the out-of-service cable clearance operation.
The coastwise-qualified
vessel would deposit the out-of-service cable at a U.S.
port; the foreign-flag
vessel may deposit the out-of-service cable at a U.S. port.
This operation may
commence inside or outside the territorial sea.
Pre-lay Grapnel Run - CWM may use either a foreign-flag or a
coastwise-qualified
flat-back vessel or ocean tug, depending on availability, to
perform the PLGR
operation. The coastwise-qualified vessel would deposit the
debris at a U.S. port;
the foreign-flag vessel may deposit the debris at either a
U.S. port or a foreign
port. This operation may commence inside or outside the
territorial sea.
Post-lay Inspection and Burial - CWM intends to use its
remotely operated vehicle
MAKO, or another suitable ROV, for the post-lay inspection
and burial operation.
CWM intends to use a foreign-flag DP vessel, possibly one of
its own cable ships
or another suitable foreign-flag vessel, to support the MAKO
or other suitable
ROV. This operation may take place inside and outside the
territorial sea.
ISSUE:
Whether the use of foreign-flag vessels in providing the
above-described operations incidental to a cable-laying operation
are violative of 46 U.S.C. App. 292 and/or 883.
LAW AND ANALYSIS:
Title 46, United States Code Appendix, 883 (46 U.S.C. App.
883, the coastwise merchandise statute 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 (i.e., a coastwise-qualified vessel). Pursuant to title 19, United States Code,
1401(c) (19 U.S.C. 1401(c)), the word "merchandise" is defined
as "...goods,
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wares and chattels of every description, and includes merchandise
the importation of which is prohibited." Further in this regard,
the so-called "eleventh proviso" of 46 U.S.C. App. 883 provides
that the term "merchandise" includes valueless material.
In addition, the "twelfth proviso" of the above-referenced
statute provides that the restrictions set forth therein apply to
"...valueless material or any dredged material regardless of
whether it has commercial value, from a point or place on the
high seas within the Exclusive Economic Zone as defined in the
Presidential Proclamation of March 10, 1983, to another point or
place in the United States or a point or place on the high seas
within the Exclusive Economic Zone..." The Exclusive Economic
Zone is defined in Presidential Proclamation 5030 of March 10,
1983 (48 FR 10605), as extending outward for 200 nautical miles
from the baseline from which the territorial sea is measured.
Section 4.80b(a), Customs Regulations (19 CFR 4.80b(a)),
promulgated pursuant to 46 U.S.C. App. 883, provides, in part,
that:
A coastwise transportation of merchandise takes place,
within
the meaning of the coastwise laws, when merchandise
laden at
a point embraced within the coastwise laws ("coastwise
point")
is unladen at another coastwise point, regardless of
the origin
or ultimate destination of the merchandise. (Emphasis
added)
Title 46, United States Code Appendix, 292 (46 U.S.C. App.
292, the coastwise dredging statute), provides that with one
exception not herein applicable, vessels may not dredge in the
navigable waters of the United States unless they meet the
requirements of 46 U.S.C. App. 883 (i.e., U.S.-built, owned and
documented). Customs has held that "dredging" for purposes of 46
U.S.C. App. 292 means the use of a vessel equipped with
excavating machinery in digging up or otherwise removing
submarine material. (Customs ruling letters 103692, dated
December 28, 1978; 109108, dated November 13, 1987; 109910, dated
January 26, 1989; and 113223, dated September 29, 1994; see also
Gar-Con Development v. State, 468 So.2d 413 (1985))
Points embraced within the coastwise laws include all points
within the territorial waters of the United States, including
points within a harbor. The territorial waters of the United
States consist of the territorial sea, defined as the belt, three
nautical miles wide, seaward of the territorial sea baseline, and
to points located in internal waters, landward of the territorial
sea baseline, in cases where the baseline and coastline differ.
Furthermore, 4(a) of the Outer Continental Shelf Lands Act
of 1953, as amended (67 Stat. 462; 43 U.S.C. 1333(a)) (OCSLA),
provides, in 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
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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 within a
State.
The statute was substantively amended by the Act of
September 18, 1978 (Pub. L. 95-372, Title II, 203, 92 Stat.
635), to add, among other things the language concerning
temporary attachment to the seabed. The legislative history
associated with this amendment is telling, wherein it is stated
that:
...It is thus clear that Federal law is to be
applicable to all activities
or all devices in contact with the seabed for
exploration, development,
and production. The committee intends that Federal law
is, therefore,
to be applicable to activities on drilling rigs, and
other watercraft, when
they are connected to the seabed by drillstring, pipes,
or other appurte-
nances, on the OCS for exploration, development, or
production pur-
poses. [House Report 95-590 on the OCSLA Amendment of
1978,
page 128, reproduced at 1978 U.S.C.C.A.N. 1450, 1534.]
With respect to the applicability of 46 U.S.C. App. 292 to
the OCS, we have held that statute to apply only to dredging on
the OCS for the purposes described in 4 of the OCSLA, and not
to dredging done to prepare the seabed of the OCS for the laying
of trans-oceanic cable.
(Customs ruling letters 109016, dated July 22, 1987; and 109882,
dated December 2, 1988)
Out-of-service Cable Clearance and Pre-Lay Grapnel Run
We are in accordance with your statement that the crucial
inquiry with respect to both the out-of-service and PLGR
operations is whether these activities constitute dredging. We
note, however, that the facts of the Customs ruling letters you
cite (i.e., 113223, dated September 29, 1994; 109910, dated
January 26, 1989; 109412, dated March 29, 1988, published as
Customs Service Decision (C.S.D.) 88-7; and 103692, dated
December 28, 1978) are distinguishable from the clearance/PLGR
activities in question inasmuch as the former involved the
manipulation of the seabed for the express purpose of
installing/laying cable whereas the latter pertain to the
incidental manipulation of the seabed not for the express purpose
of installing/laying cable but rather for retrieving out-of-service cable and debris on the sea floor. Customs does not
consider the retrieval of out-of-service cable and/or subsea
debris under these circumstances as an engagement in "dredging"
within the meaning of 46 U.S.C. App. 292 inasmuch as the
subject grapnel(s) are not excavation equipment to be used for
digging up or otherwise removing submarine material.
Accordingly, under the facts as described above, neither the
out-of-service cable clearance nor the PLGR operations would
constitute dredging within the meaning of 46 U.S.C. App. 292.
Foreign-flag vessels would therefore not be prohibited from
engaging in such activities either inside or outside the
territorial sea.
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Transportation of Out-of-service Cable and Debris
As noted above, "merchandise" within the meaning of 46
U.S.C. App. 883 includes "...goods, wares and chattels of every
description,..." (19 U.S.C. 1401(a)) It also includes
"...valueless material or any dredged material regardless of
whether it has commercial value, from a point or place on the
high seas within the Exclusive Economic Zone..." (the so-called
"twelfth proviso" to 46 U.S.C. App. 883) It is our position
that the out-of-service cable resulting from the out-of-service
cable clearance operation and the debris resulting from the PLGR
operation constitute valueless material and therefore fall within
the definition of "merchandise" for purposes of 46 U.S.C. App.
883. The transportation of such "merchandise" is therefore
subject to the restrictions set forth therein.
Accordingly, the use of a foreign-flag vessel to transport
the subject out-of-service cable and debris from a point or place
on the high seas within the 200-mile EEZ to either another such
point or place, or to any other coastwise point, would constitute
a violation of 46 U.S.C. App.
883. However, the use of a foreign-flag vessel to transport
out-of-service cable and debris from a point or place within the
200-mile EEZ to a foreign port does not constitute such a
violation, nor would the use of a foreign-flag vessel to
transport such cable and debris from a point or place beyond the
200-mile EEZ to either a coastwise or foreign port since neither
of these scenarios involve a transportation of merchandise
between points embraced within the coastwise laws.
Post-Lay Inspection and Burial
In regard to the use of a foreign-flag vessel to accomplish
the post-lay inspection and burial activities in question, we
note that it is Customs long-standing position that neither
cable-laying nor cable repair is considered to be coastwise trade
(Customs ruling letter 103651, dated January 30, 1979) More
importantly, however, Customs has held that when cable burial
devices (such as the MAKO) are used from cable-laying or
repairing vessels, and when they effect a limited and temporary
manipulation of the seabed, dredging does not take place.
(Customs ruling letters 109412, dated March 29, 1988, published
as C.S.D. 88-7; and 109882, dated December 2, 1988)
Accordingly, the MAKO or other suitable ROV may be used on a
foreign-flag vessel for the post-lay inspection and burial
operation under consideration either inside or outside the
territorial sea without running afoul of the coastwise laws.
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HOLDING:
As discussed in the Law and Analysis portion of this ruling,
foreign-flag vessels used in providing the above-described
operations incidental to a cable-laying operation are not
violative of 46 U.S.C. App. 292 and/or 883.
Sincerely,
Jerry Laderberg
Acting Chief
Entry and Carrier Rulings Branch