VES-3-06-OT:RR:BSTC:CCR H253080 KLQ
Nicholas H. Walsh P.A.
120 Exchange Street
Portland, Maine 04112-7206
RE: 46 U.S.C. § 55102; 19 C.F.R. § 4.80a; Coastwise Transportation.
Dear Walsh:
This is in response to your April 17, 2014, ruling request on behalf of your client, in which you request a ruling determining whether two proposed transportations, the first involving an excavator, backhoe, and bulldozer and the second involving the excavator and backhoe, would constitute a violation of 46 U.S.C. § 55102. Our decision follows.
FACTS
The following facts are from your ruling request and email to this office, dated June 9, 2014. Your client intends to construct a road on Dudley Island, which is a part of the state of Maine. Your client proposes to transport an excavator, backhoe, and bulldozer from Lubec, Maine to Dudley Island. The proposed transportation of the excavator, backhoe, and bulldozer will follow one of two scenarios.
In the first scenario, the contractor for the project will load the excavator, backhoe, and bulldozer onto his trailer, hitch the trailer to his truck, and drive from Lubec, Maine, to Welshpool, New Brunswick in Canada. Once in New Brunswick, the contractor will drive onto a Canadian-flagged ferry, either the M/V FUNDY TRAIL or the M/V ISLAND HOPPER, and drive off of the ferry at Dudley Island. On the return voyage, the contractor will drive the truck and the trailer with the equipment on it, onto the ferry at Dudley Island, drive off of the ferry in Welshpool, New Brunswick, and then drive to Lubec, Maine.
In the second scenario, the contractor will drive the excavator and/or backhoe from Lubec, Maine, to Welshpool, New Brunswick. Once in New Brunswick, the contractor will drive onto a Canadian-flagged ferry, either the M/V FUNDY TRAIL or the M/V ISLAND HOPPER, and drive off of the ferry at Dudley Island. On the return voyage, the contractor will drive the excavator and/or backhoe onto the ferry at Dudley Island, drive off the ferry in Welshpool, New Brunswick, and then drive to Lubec, Maine. The bulldozer would not be used in this scenario.
ISSUE
Whether the transportation as described in scenario one and scenario two violates 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.
[emphasis added].
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.
Scenario One
In the first proposed scenario, you indicate that the subject transportation will be between two United States (“U.S.”) coastwise points via a foreign port. In Lubec, Maine, a coastwise point, the contractor will load the backhoe, excavator, and bulldozer (“merchandise”) onto a trailer, hitch the trailer to a truck, and drive to Welshpool, New Brunswick, a foreign port. The contractor will drive onto a non-coastwise-qualified vessel, which will transport the merchandise from Welshpool, New Brunswick, a foreign port, to Dudley Island, Maine, a U.S. coastwise point.
Pursuant to 46 U.S.C. § 55102, “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 is coastwise-qualified. In the present case, the vessels are not coastwise-qualified because the vessels are Canadian-flagged.
In the present matter, the merchandise will be transported between U.S. coastwise points via a foreign port and part of this transportation will be conducted by a non-coastwise-qualified vessel. 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, via a foreign port, the transportation as described in scenario one violates 46 U.S.C. § 55102.
Scenario Two
In the second proposed scenario, you indicate that the subject transportation will be between two U.S. coastwise points via a foreign port. The contractor will drive the excavator and/or backhoe (“merchandise”) from Lubec, Maine, a U.S. coastwise point, to Welshpool, New Brunswick, a foreign port. The contractor will then drive the excavator and/or backhoe onto a non-coastwise-qualified vessel that will transport the merchandise from Welshpool, New Brunswick, a foreign port, to Dudley Island, Maine, a U.S. coastwise point.
In the present matter, the merchandise will move on its own volition from Lubec, Maine to Welshpool, New Brunswick. Since the merchandise will move on its own volition, it will not have been transported for purposes of 46 U.S.C. § 55102. Therefore, the remaining portion of the transportation from Welshpool, New Brunswick, to Dudley Island, using a non-coastwise-qualified vessel, would be a transportation from a foreign port to a U.S. coastwise point. Insofar as a non-coastwise-qualified vessel will transport the subject merchandise only between a foreign port and a U.S. coastwise point, there is no violation of 46 U.S.C. § 55102.
HOLDING
The transportation as described in scenario one violates 46 U.S.C. § 55102. The transportation as described in scenario two does not violate 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