VES-3-06/3-15 CO:R:P:C 111103 JBW
W. H. Boland, Jr.
Captain, United States Coast Guard
Officer in Charge, Marine Inspection
455 Commercial Street
Boston, Massachusetts 02109-1045
RE: Coastwise; Drilling; Dredging; Construction; Territorial
Waters; Outer Continental Shelf; 46 U.S.C. App. 883; 46
U.S.C. App. 292; 43 U.S.C. 1333.
Dear Captain Boland:
This letter is in response to your inquiry of June 5,
1990, regarding the use of a non-coastwise-qualified Mobile
Offshore Drilling Unit (MODU) on a project located in Boston
Harbor.
FACTS:
In your letter, you state that your office has received
a proposal that will involve the use of a foreign-flag MODU on a
project to install effluent diffusers in Boston Harbor at a
point approximately 9.5 miles off the coast of Massachusetts.
The MODU is a non-self-propelled drill barge attached to the
seabed that will be used for construction purposes only, not oil
or gas exploration. From a telephone call with Lieutenant
Commander Fink of your office, we learned that the barge will
also be engaged in dredging operations. You state that the
activity will take place in United States waters within the
Boundary Line as defined in 46 C.F.R. Part 7. Because of the
proximity of the operation to the territorial limits, we will
also analyze the activity for its compliance with laws
administered by the Customs Service that are applicable beyond
the territorial waters of the United States.
ISSUE:
Whether the coastwise laws prohibit the use of a non-
coastwise-qualified stationary platform or barge for drilling or
dredging that is not related to natural resource exploration or
extraction in territorial waters or on the outer continental
shelf.
LAW AND ANALYSIS:
The coastwise laws of the United States prohibit the
transportation of merchandise between points in the United States
embraced within the coastwise laws in any vessel other than a
vessel built and documented under the laws of the United States
and owned by persons who are citizens of the United States. (46
U.S.C.A. App. 883 (West Supp. 1990), referred to as "the Jones
Act"). Likewise, the dredging statute provides that "a foreign-
built dredge shall not, under penalty of forfeiture, engage in
dredging in the United States unless documented as a vessel of
the United States." 46 U.S.C. App. 292 (Supp. III 1985).
Generally, the coastwise laws and the dredging laws include
points within the territorial waters of the United States, which
consist of the territorial sea, defined as the belt, three
nautical miles wide, adjacent to coast of the United States and
seaward of the territorial sea baseline.
The Customs Service has consistently held that a non-
coastwise-qualified vessel used as a moored facility within
territorial waters does not engage in the coastwise trade and
consequently does not violate the coastwise laws provided that
the vessel remains stationary. E.g., C.S.D. 89-107, 23 Cust. B.
& Dec., No. 44, 8, 9 (1989). Thus, the use within territorial
waters of a foreign-registered stationary MODU for construction
operations does not violate the coastwise laws.
In our interpretation of 46 U.S.C. App. 292, we have
ruled that dredging in the United States is prohibited to any
foreign-built dredging vessel except those named in section 2 of
the Act of May 28, 1906 (34 Stat. 204). C.S.D. 85-11, 19 Cust.
B. & Dec. 509, 511-513 (1985). However, a dredging vessel built
in the United States, but documented under a foreign-flag may
engage in dredging in the United States. Id. From the
information provided, we cannot determine conclusively that the
foreign-flag MODU is eligible to be engaged in dredging in the
United States.
Pursuant to Section 4(a) of the Outer Continental Shelf
Lands Act of 1953 (OCSLA), as amended, 43 U.S.C. 1333(a) (1982),
the Customs Service has ruled that the coastwise laws are
extended to mobile oil drilling rigs during the period they are
secured to or submerged onto the seabed of the Untied States
outer continental shelf. T.D. 54281(1), 92 Trace. Dec. 8 (1957);
see also, C.S.D. 89-115, 23 Cust. B. & Dec., No. 45, 7, 13-14
(1989). The Customs Service has applied this principle to
drilling platforms, artificial islands, and similar structures,
as well as devices attached to the seabed of the outer
continental shelf for the purpose of resource exploration
operations, including warehouse vessels anchored over the outer
continental shelf when used to supply drilling rigs on the outer
continental shelf. Id. However, the OCSLA does not extend
jurisdiction to activities wholly unrelated to the exploration,
development, or production of natural resources on the seabed of
the outer continental shelf. 106 Mile Transport Associates v.
Koch, 656 F. Supp. 1474, 1482 (S.D.N.Y. 1987). Therefore, if
the proposed construction activities will take place beyond
territorial waters, then they would not fall within the
jurisdictional ambit of the OCSLA. The use of an MODU secured to
the seabed for construction activities on the outer continental
shelf consequently would not be subject to the coastwise laws.
The Customs Service has furthermore held that 46 U.S.C.
App. 292 applies to certain dredging operations on the outer
continental shelf in support oil and gas resource exploration.
C.S.D. 85-11. The application of the dredging statute, however,
extends only to those operations that are in furtherance of the
extraction of, the exploration for, or the development of
resources from the outer continental shelf. Headquarters Ruling
Letter 109016, dated July 22, 1987. The dredging activities
described in your letter do not appear to meet the requirements
of the OCSLA, and, consequently, 46 U.S.C. App. 292 would not
prohibit the dredging by a foreign-built vessel on the outer
continental shelf.
We note that although the MODU under consideration
will not be engaging in the coastwise trade while in operation as
a stationary construction facility either within or beyond the
territorial waters, the vessel itself will become a coastwise
point if within territorial waters. C.S.D. 89-107. Therefore,
any vessel moving merchandise or passengers between the
stationary platform and another coastwise point must be
documented for the coastwise trade. 46 U.S.C. App. 289 & 883
(1982). Furthermore, United States law requires that a
coastwise-qualified vessel tow the vessel under consideration
between coastwise points. 46 U.S.C.A. App. 316(a) (West Supp.
1990).
Finally, we add that 46 U.S.C.A. App. 883 requires
that the transportation of the dredged material be effected by a
coastwise-qualified vessel. Public Law 100-329 expanded the
definition of coastwise trade in 46 U.S.C.A. App. 883 to
include:
transportation of valueless material or any
dredged material regardless of whether it has
commercial value, from a point or place in
the United States or a point or place on the
high seas with 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 with the Exclusive Economic Zone.
46 U.S.C.A. 883. From this section, the movement of dredged
material would constitute an engagement in the coastwise trade
unless the dredged material is brought beyond the 200 mile
exclusive economic zone.
HOLDING:
The coastwise laws do not prohibit the use of a non-
coastwise-qualified stationary platform or barge used for
construction activities within or beyond the territorial waters
of the United States. If within territorial waters, the vessel
itself becomes a coastwise point. Only coastwise-qualified
vessels may transport merchandise and passengers between the
platform and another coastwise point. Likewise, coastwise-
qualified vessels must be used to tow the vessel between
coastwise points.
The dredging laws prohibit the use of foreign built
vessels from engaging in dredging activities within the
territorial waters of the United States. If the vessel is built
in the United States, but documented under a foreign-flag, then
it may engage in dredging activities. If the dredging will take
place beyond territorial waters, then the dredging statute does
not apply, for the vessel is not engaged in resource extraction
or exploration. However, transportation of the dredged materials
within the territorial waters or the exclusive economic zone must
be by a coastwise-qualified vessel.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch