VES-3-CO:R:IT:C 111355 LLB
Mr. George J. Mannina, Jr.
O'Connor and Hannan
1919 Pennsylvania Avenue, N.W.
Washington, D.C. 20006-3483
Re: Anti-pollution vessels; oil spill recovery; prototype
vessel; 46 U.S.C. App. 883; 46 U.S.C. 12101
Dear Mr. Mannina:
This is in response to your letter of October 16, 1990, in
which you request a ruling on the coastwise trade implications,
if any, in the use of two newly-constructed foreign vessels to
demonstrate various anti-pollution activities in various ports of
the United States.
FACTS:
It is proposed that Ecomarine, Inc., a U.S. company, bring
into the U.S. two newly-constructed vessels for the purpose of
demonstrating their capabilities in marine pollution control.
The vessels, one 36 feet in length and the other 65 feet in
length, are capable of removing spilled oil, removing surface
solids, removing seaweed and algae, oxygenating water, and
monitoring for pollutants in the water column.
The ruling request solicits the opinion of Customs as to
whether, for Jones Act purposes, it makes any difference whether:
1. Ecomarine transports observers from and to shore aboard
the demonstration vessel.
2. The demonstration vessel brings demonstration
floatables from shore, dumps and then removes them,
and then returns the demonstration floatables to shore.
3. The demonstration vessel cleans up floatables already
found in the harbor and either returns them to shore
for disposal or returns them to the water.
4. The demonstration vessels are moved between port
demonstration areas via truck or air freight or over
water under their own power. If the vessels move
over water under their own power, they would not
transport cargo or passengers. The vessels would
each be operated by a two-man crew.
ISSUE:
Whether any of the enumerated proposed activities listed in
the FACTS portion of this ruling may be prohibited by law.
LAW AND ANALYSIS:
Generally, the coastwise laws (e.g., 46 U.S.C. App. 289 and
883, and 46 U.S.C. 12106 and 12110) prohibit the transportation
of merchandise or passengers between points in the United States
embraced within the coastwise laws 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.
The coastwise law pertaining to the transportation of
merchandise, 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 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 thereof as determined by the Secretary
of the Treasury, or the actual cost of the trans-
portation, 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 coastwise laws generally apply to points in the
territorial sea, defined as the belt, three nautical miles wide,
seaward of the territorial sea baseline, and to points located in
the internal waters, landward of the territorial sea baseline, in
cases where the baseline and the coastline differ. These laws
have also been interpreted to apply to transportation between
points within a single harbor.
"Merchandise", as used in section 883, includes any article,
including even materials of no value (see the amendment to
section 883 by the Act of June 7, 1988, Pub. L. 100-329; 102
Stat. 588). Pursuant to section 4.50, Customs Regulations (19
CFR 4.50), a "passenger" for purposes of the coastwise laws is
defined as "any person carried on a vessel who is not connected
with the operation of such vessel, her navigation, ownership, or
business."
The Commercial Fishing Industry Vessel Anti-Reflagging Act
of 1987 (Pub. L. 100-239; 101 Stat. 1778) changed the definition
of "fisheries" by amending the law to include in the definition,
transporting of marine vegetation in the navigable waters of the
United States. Title 46, United States Code, section 12108(b)
limits the employment in the fisheries to a vessel issued a
certificate of documentation with a fisheries endorsement. Only
a vessel eligible for documentation (i.e., over 5 net tons and
owned by a citizen) which was built in the United States may be
so endorsed. With regard to vessels under 5 net tons, Customs
has long held that such vessels, if owned by United States
citizens or by resident aliens, may engage in the fisheries even
if foreign built (see T.D. 56382 (6)).
Customs has previously ruled that the use of a vessel solely
for the purpose of demonstration in which persons who are
transported on demonstration rides embark and disembark at the
same point is not a use in the coastwise trade even if the ride
is entirely within territorial waters. Such persons are not
considered to be passengers for the purposes of the coastwise
laws. However, these rulings have been limited to demonstration
rides originating and terminating at the same point because the
transportation of persons between different points is itself
evidence of a purpose other than the demonstration of a vessel.
This, of course, would not apply to the two-man crew assigned to
each of the two vessels.
The transportation aboard each vessel of equipment necessary
to the operation of the transporting vessel would likewise pose
no problem. Such essential equipment is not considered
merchandise under the coastwise laws.
In regard to the removal of surface solids (floatables), a
distinction must be made between the demonstration floatables
which are transported on the vessels from the starting point to
the demonstration site and back again, and those floatables which
are found at the demonstration site. If the latter floatables
are retrieved from the water and transported to another location
(whether ashore or otherwise), even in the vicinity of their
retrieval, a coastwise violation will have occurred.
Although not specifically listed in the proposed activities,
we will address the question of removal of seaweed and algae
since those services are listed among the capabilities of the
vessels in question. As previously stated, the transportation of
marine vegetation is considered to be an activity for which a
fisheries endorsement would be necessary. If they are over 5 net
tons, the vessels in question could not be properly documented by
virtue of their foreign construction. If they are 5 net tons or
less, they could be so employed if owned by citizens of the
United States or by resident aliens.
HOLDING:
Following a thorough review of the facts and analysis of the
law and applicable precedents, we find that the vessels in
question may engage in demonstration activities in the United
States to the following extent:
1. Persons may be transported from a shore site to a
demonstration point and back to the original shore point to be
disembarked, even if the entire operation occurs within
territorial waters.
2. Demonstration floatables, not placed aboard the vessels at
any coastwise point, may be dumped and retrieved by the vessels
at demonstration points.
3. True floating debris may not be retrieved by the vessels,
even during demonstrations, and transported to any other point
for discharge, no matter how minimal the transportation.
4. The use of the vessels to harvest and/or transport seaweed or
algae is an engagement in the fisheries, a service in which the
vessels may not participate unless of 5 net tons or less and
owned by United States citizens or resident aliens.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch