VES-3-RR:BSTC:CCR H235360 DAC
James A. Kearns
Bryan Cave LLP
One Metropolitan Square
201 North Broadway, Suite 3600
St. Louis, MO 63102-2750
RE: 46 U.S.C. § 55102, 19 CFR § 4.80b; Coastwise trade , merchandise, crane operations, maneuvering, movement, barge.
Dear Mr. Kearns:
This letter is in reply to your submission of November 2, 2012, on behalf of your client, GLM Equipment, LLC (“GLME”), a Louisiana limited liability company, regarding the operation of a crane that is mounted upon a barge. Our ruling on this matter is set forth below.
FACTS:
In your submission, you describe the following proposed transaction. GLME proposes to have a crane constructed and mounted upon a barge for use within United States ports. The barge that the subject crane is to be mounted upon may not be qualified for performing coastwise trade transportation operations, and therefore may also not have a coastwise endorsement. However, GLME shall require contract terms between GLME and a contract crane operator to require the following limitations upon operations of the subject crane mounted upon such barge. The lease contract shall strictly impose upon the lessee the restriction that any movement of merchandise by the crane mounted upon such barge is to be effected solely by either “a” or “b”, which provide the following terms, conditions and limitations:
(1) the operation of the crane alone [for lifting operations], with no movement of the barge except for any necessary movement which is incidental to a lifting operation while it is taking place, or
(2) the rotation of the barge on its central axis in a pivoting motion while it remains stationary, and not by a movement of the barge in a swinging motion around a fulcrum point elsewhere on the barge.
Additionally, the lease contract will further strictly prohibit the crane mounted upon such barge from lifting merchandise with its crane at one coastwise point, being towed or pushed or otherwise moved to another coastwise point while the merchandise is suspended from the crane [or resting upon the barge], and placing the merchandise at that second coastwise point. See CBP HQ Ruling 116111, January 30, 2004. You ask whether the use of a crane mounted upon such a barge in a manner subject to the prohibitions, limitations and restrictions provided above would violate 46 U.S.C. § 55102 and 19 CFR § 4.80b(a).
ISSUE:
Whether the proposed use and operation of a crane mounted upon such a barge, in accordance with the prohibitions, limitations and restrictions provided above, would violate 46 U.S.C. § 55102 and 19 CFR § 4.80b(a).
LAW AND ANALYSIS:
Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. A vessel that is built in, documented under the laws of, and owned by citizens of the United States, and which obtains a coastwise endorsement from the U.S. Coast Guard, is referred to as “coastwise-qualified.”
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. Title 46, United States Code, section 55102 (46 U.S.C. § 55102), the coastwise merchandise statute often called the “Jones Act,” provides in part that 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 a foreign port, unless the vessel is wholly owned by citizens of the U.S. for purposes of engaging in the coastwise trade and has been issued a certificate of documentation with a coastwise endorsement under chapter 121 of title 46 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement. Section 4.80b(a), of the Customs and Border Protection (“CBP”) Regulations (19 CFR 4.80b(a)) provides, 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.
We note that in the proposed operation, as described above, the crane is to be mounted upon a non-coastwise qualified barge. See also HQ 116697, July 25, 2006; 116680, June 29, 2006; 116111, January 30, 2004; 115630, March 25, 2002; 115431, September 4, 2001.
In HQ 116111, dated January 30, 2004, CBP stated as follows:
CBP has long held that the use of a non-coastwise-qualified crane vessel to load and unload cargo or construct or dismantle a marine structure is not coastwise trade and does not violate the coastwise laws, provided, that any movement of merchandise is effected exclusively by the operation of the crane and not by movement of the vessel, except for necessary movement which is incidental to a lifting operation while it is taking place. Thus, such a crane barge could lift merchandise with its crane at one coastwise point, be pivoted while remaining in one location, and put down the merchandise at a place other than that from which it was lifted. The crane barge would be prohibited from lifting merchandise with its crane at one coastwise point, not remain stationary, and while the merchandise is suspended from the crane, placing the merchandise at a second coastwise point. (See, CBP HQ ruling letters 106351, dated November 1, 1983; 108213, dated March 6, 1986; 115630, dated March 25, 2002; and 115940, dated April 17, 2003). (emphasis added.)
In light of the totality of the facts and circumstances presented and our prior ruling determinations, we find the following:
The operation proposed under the prohibitions, limitations, restrictions and provisions of “(1)” above would not involve a violation of 46 U.S.C. § 55102, if such non-coastwise-qualified barge will merely be lifting, and it will not be otherwise moving, except such “movement which is incidental to a lifting operation.” See HQ 116111, January 30, 2004. However, we note that the operation proposed under the prohibitions, limitations, restrictions and provisions of “(1)” above would involve a violation of 46 U.S.C. § 55102, if such non-coastwise-qualified barge undertakes or undergoes any maneuvering or any “movement not incidental to a lifting operation.” See HQ 116111, January 30, 2004. In such instance, that type of maneuvering or movement would exceed mere pivoting and would constitute transportation for the purposes of 46 U.S.C. § 55102.
The operation proposed under the prohibitions, limitations, restrictions and provisions of “(2)” above would not involve a violation of 46 U.S.C. § 55102, as such non-coastwise-qualified barge will merely be pivoting [“while remaining in one location”], and it will neither undertake nor unergo any movement or maneuvering not incidental to a lifting operation. See HQ 116111, January 30, 2004.
HOLDING:
Based on the totality of the facts and circumstances presented, we determine that the proposed crane operations as described in “(1)” and “(2)” and within the prohibitions, limitations and restrictions provided above, would not violate 46 U.S.C. § 55102 and 19 CFR § 4.80b(a).
Sincerely,
George Frederick McCray
Supervisory Attorney-Advisor/Chief
Cargo Security, Carriers and Restricted Merchandise Branch
Office of International Trade, Regulations & Rulings
U.S. Customs and Border Protection