VES-3-12 CO:R:IT:C 111372 JBW
Mr. Paul J. Larson
Admiralty Marine Investigations
920 North Avalon Blvd., Suite 2
Wilmington, California 90744
RE: Coastwise; Skimmer; Oil Recovery; 46 U.S.C. App. 883.
Dear Mr. Larson:
This letter is in response to your letter of October 30,
1990, in which you request a ruling on the use of a German-
flagged oil skimmer in oil recovery operations.
FACTS:
In your letter, you state that your company has been asked
to determine whether a German-flagged skimmer may be used in oil
recovery operations in United States waters. You inquire
generally, notwithstanding questions of reflagging, whether
foreign-flagged skimming vessels may be used in oil recovery
operations. You also pose a number of variations on the basic
question relating to the operation of skimming vessels: (1)
whether recovery operations alone constitute coastwise trade; (2)
whether transportation of recovered oil constitutes coastwise
trade; (3) whether oil recovered by a non-coastwise-qualified
vessel may be transferred to a coastwise-qualified vessel for
transportation to the shore; (4) whether recovered oil may be
transferred to a non-coastwise-qualified vessel for transporation
to a point in the United States; (5) may a non-coastwise-
qualified vessel go beyond the limits of the United States
exclusive economic zone [EEZ] to avoid the coastwise prohibition;
and (6) must the recovered oil have a positive value in order to
trigger the coastwise laws. Finally, you inquire whether the use
of foreign-flagged vessel in the clean-up operations following
the EXXON VALDEZ spill resulted from a one-time waiver or from a
determination that oil recovery did not constitute coastwise
trade.
ISSUE:
Whether recovery or transportation of oil by a skimming
vessel constitutes coastwise trade.
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, either directly or via a
foreign port, 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. 46 U.S.C.A. App.
883 (West Supp. 1990)(referred to as "the Jones Act"). Further,
Section 316(a) of Title 46, United States Code Appendix,
prohibits the use of a non-coastwise-qualified vessel to tow any
vessel, other than a vessel in distress, between ports or places
in the United States embraced within the coastwise laws, either
directly or by way of a foreign port, or to do any part of such
towing, or to tow any such vessel between points in a harbor of
the United States. 46 U.S.C. App. 316(a) (West Supp. 1990).
Generally, the coastwise and towing laws apply to points within
the territorial sea of the United States, 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 the
coastline differ. Headquarters Ruling Letter 111275, dated
November 13, 1990.
The term merchandise is defined in the coastwise statute to
include valueless materials. 46 U.S.C. App. 883. The statute
further provides that the transportation of valueless material,
regardless of its commercial value, from a point or place in the
United States or 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 falls within the ambit of the coastwise
statute.
From this statutory framework, the Customs Service has
concluded that the coastwise laws prohibit the use of a non-
coastwise-qualified mobile vessel for recovery or transportation
of oil in waters within the jurisdiction of the coastwise laws.
Headquarters Ruling Letter 110386, dated September 29, 1989.
However, Customs has held that the use of a non-coastwise-
qualified vessel as a stationary facility for lodging,
processing, storing, or other activities is not a
"transportation" that is prohibited by section 883. Id. If such
a stationary vessel is being loaded or unloaded and must be moved
to another location temporarily due to stress of weather or other
reason involving the safety of the vessel, the coastwise laws are
not violated so long as no loading or unloading occurs at any
other coastwise point and the vessel is subsequently returned to
its original location once the danger has passed. Id.
Only coastwise-qualified vessels may accept the transfer of
the recovered oil at a coastwise point for transportation to
another coastwise point, regardless of whether the vessel leaves
the territorial waters or exclusive economic zone of the United
States. Headquarters Ruling Letter 110276, dated June 15, 1989.
Transportation by a non-coastwise-qualified vessel is permitted
only if the oil is unloaded at a foreign point. Id. However,
you should be aware that under 50 U.S.C. App. 2406(d) (1988), the
exportation of domestically produced crude oil that has been
transported via the Trans-Alaska Pipeline is prohibited, with
certain narrow exceptions.
You raise in your letter questions regarding the use of
foreign-flagged vessels in the EXXON VALDEZ clean-up operations.
Pursuant to the Act of December 27, 1950, 64 Stat. 1120 (note
preceding Chapter 1 of Title 46 Appendix, United States Code),
the Customs Service, through authority delegated by the Secretary
of the Treasury, must waive application of the Jones Act upon the
request of the Secretary of Defense in the interest of national
defense and to the extent required. Upon his own initiative or
upon the written recommendation of the head of any other United
States agency, the Secretary of Treasury has the discretion to
waive application of the coastwise laws "whenever he deems that
such action is necessary in the interest of national defense."
The Customs Service makes recommendations to the Assistant
Secretary of Treasury for Enforcement on these waivers. The
foreign-flagged skimmer vessels used in the EXXON VALDEZ clean-up
were operating under waivers issued by the Department of the
Treasury.
HOLDING:
A skimming vessel must be coastwise-qualified to engage in
mobile recovery or transportation of spilled oil in waters
embraced within the coastwise laws. The use of a stationary
facility for lodging, processing, storing, or other activities
recovery of oil is not a transportation within the prohibitions
contained in 46 U.S.C. App. 883. The foreign-flagged vessel
used in the EXXON VALDEZ oil clean-up operated under waivers to
the coastwise laws issued by the Department of the Treasury.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch