VES-3-02-OT:RR:BSTC:CCR H268742 KLQ
James H. Roussel
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
201 St. Charles Avenue, Suite 3600
New Orleans, LA 70170
RE: 46 U.S.C. § 55102; 19 C.F.R. § 4.80a; Coastwise Transportation.
Dear Mr. Roussel:
This is in response to your September 8, 2015, ruling request on behalf of your client, in which you request a ruling determining whether the proposed transportation would constitute a violation of 46 U.S.C. § 55102. Our decision follows.
FACTS
The following facts are from your ruling request and emails to this office, dated September 28, 2015 and December 7, 2015. Eastern Shipbuilding Group, Inc. is building a tugboat, the M/V DOUGLAS B. MACKIE (“Great Lakes tug”), for the Great Lakes Dredge & Dock Company. In May 2016, the Great Lakes tug will be laden onboard Barge BB30 (“barge”), a Norwegian, non-coastwise-qualified, submersible barge at Eastern Shipbuilding Group, Inc.’s shipyard in Panama City, Florida. A coastwise-qualified tugboat will then tow the barge, with the Great Lakes tug on the deck of the barge, to a point in international waters. The barge will not move under its own power during the towing from the shipyard in Panama City, Florida to the point in international waters.
Once in international waters, the barge will submerge and the Great Lakes tug will launch. A coastwise-qualified tugboat will then tow the Great Lakes tug to the Port of Panama City, Florida. At no point during the towing of the Great Lakes tug from the point in international waters to the Port of Panama City will the Great Lakes tug move under its own power.
ISSUE
Whether the proposed transportation would constitute a violation of 46 U.S.C. § 55102?
LAW AND ANALYSIS
Pursuant to 46 U.S.C. § 55102, which provides, in pertinent part:
Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not provide any part of the transportation of merchandise by water, or by land and water, between points in the United States to which the coastwise laws apply, either directly or via foreign port, unless the vessel—
(1) is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and
(2) has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement.
The coastwise laws generally apply to points in the territorial sea, which is 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.
Pursuant to 46 U.S.C. § 55102(a), “merchandise, includes (1) merchandise owned by the United States Government, a State, or a subdivision of a State; and (2) valueless material.” As such, any cargo, regardless of its value or ownership, would be considered merchandise for the purpose of 46 U.S.C. § 55102. The regulations promulgated under the authority of 46 U.S.C. § 55102(a), provide in pertinent part:
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.
In the subject transportation, a coastwise-qualified tugboat will tow the barge, with the Great Lakes tug on the deck of the barge, from a coastwise point to a point in international waters. A vessel transported on another vessel is merchandise for purposes of 46 U.S.C. § 55102.
Moreover, the Great Lakes tug will be transported between U.S. coastwise points and part of this transportation will be conducted by a non-coastwise-qualified vessel, the barge. It is a violation of the coastwise laws for a non-coastwise-qualified vessel to provide part of the transportation of merchandise between points in the U.S. to which the coastwise laws apply. Insofar as a non-coastwise-qualified vessel will transport the subject merchandise for a part of the transportation between U.S. points to which the coastwise laws apply, the transportation violates 46 U.S.C. § 55102.
HOLDING
The proposed transportation would constitute a violation of 46 U.S.C. § 55102.
Sincerely,
Lisa L. Burley
Chief/Supervisory Attorney-Advisor
Cargo Security, Carriers and Restricted Merchandise Branch
Office of International Trade, Regulations and Rulings
U.S. Customs and Border Protection