VES-3/7/10-OT:RR:BSTC:CCR H242469 WRB
Robert Lee Jones
1266 New Hampshire Avenue
Washington, DC 20036
RE: Coastwise Transportation; Navigable Waters; Dredging; 46 U.S.C. §§108, 55102,
55109
Dear Mr. Jones:
This letter is in response to your correspondence dated May 14, 2013, requesting a ruling regarding the use in the navigable waters of the United States of a foreign-built, multi-functional amphibious machine known as the Watermaster Excavator, which is, designed for activities such as excavation, dredging, and aquatic weed cutting and harvesting. Our ruling follows.
FACTS
You write to us on behalf of your client, the Peter F. Alexander Landscape Architect Planning firm of Greenwich, Connecticut, requesting a determination as to the applicability of the Jones Act to the Watermaster Excavator. Your client has been engaged to plan the restoration of small lakes in New England in the aftermath of Hurricane Sandy. Your client’s stated goals are to restore and raise shoreline elevations for storm protection, adjust water depth in shallow shorelines, collect material to restore critical ecosystem features and provide for the maintenance of mooring fields and recreational waters suffering from silt input.
Per your submission, circumstances dictate that the methods for accomplishing the stated goals be as cost-effective as possible. Your client indicates that the methods used to accomplish the goals demand equipment that can be quickly, easily and inexpensively moved to inland bodies of water. In surveying the equipment available, your client has determined the Watermaster Excavator meets the requirements expressed above.
You describe the Watermaster Excavator as, “…essentially a floating backhoe with a maximum depth of 20 feet that is transported on land to non-federal (state) inland lakes.” The Watermaster Excavator is made in Finland. As part of your submission, you enclose a color, photographic brochure describing the Watermaster Excavator in detail, and request our determination as to whether the Watermaster Excavator is subject to the Jones Act and therefore excluded from operating in small non-federal bodies of water; and, if it were rendered incapable of self-propulsion and was moved through the water via land based cables, would it be allowed to operate in small non-federal bodies of water.
The Watermaster Excavator is depicted below:
The brochure your client provided describes the Watermaster Excavator’s capabilities as, “Backhoe dredging, suction dredging and pile driving capabilities built in one compact sized machine.” It is intended for, “… shallow waters, lakes, rivers, canals, ponds and basins.” The brochure further characterizes the Watermaster Excavator, saying, “Watermaster is an ideal machine for civil engineering, construction and dredging companies as well as municipalities etc.” Examples of suitable applications for the Watermaster Excavator are listed as:
Maintenance and deepening of rivers, lakes, canals, channels, marinas etc.
Removing vegetation (rooted)
Removal of polluted sediments
Flood control
Reconstruction of shorelines
Construction work in water environment
Maintenance of industrial basins and mining ponds
Piping system and cable work
Etc.
On the page of the brochure entitled “Suction dredging,” the Watermaster Excavator’s dredging capabilities are characterized, as such, “The suction tools have powerful Watermaster dredging pumps; the most efficient suction dredging depth is 0,8 m - 5,0 m; and, Watermaster can operate in such shallow water sites where traditional dredgers cannot.” Regarding the use of the Watermaster excavator as a backhoe-style excavator, the brochure further states, “Watermaster can operate in shallow water sites where land-based excavators or excavators on pontoons cannot.” The available attachments discussed in the brochure include a clamshell bucket “for environmental dredging,” and a rake “for removing vegetation and trash.”
ISSUE
Whether the use of a foreign-built vessel as a dredge in the navigable waters of the United States is prohibited by 46 U.S.C. §§ 108, 55102 and 55109.
LAW AND ANALYSIS
The Jones Act, 46 U.S.C. § 55102, states 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 was built in and documented under the laws of the United States and owned by persons who are citizens of the United States. See also 19 C.F.R. §§ 4.80, 4.80b. Such a vessel, after it has obtained a coastwise endorsement from the U.S. Coast Guard, is said to be “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, § 55109 (46 U.S.C. § 55109) provides that only coastwise-qualified vessels may engage in dredging in the navigable waters of the United States, saying, in pertinent part, that, “…a vessel may engage in dredging in the navigable waters of the United States only if—
the vessel is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade;
the charterer, if any, is a citizen of the United States for purposes of engaging in the coastwise trade; and
(3) the vessel has been issued a certificate of documentation with a coastwise endorsement under chapter 121 of this title or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement….”
Dredging is defined as “excavation” by any means:
...The word “excavate” is derived from the Latin word meaning to hollow out. Its common, plain and ordinary meaning is to make a cavity or hole in, to dig out, hollow out, to remove soil by digging, scooping out or other means. The common plain and ordinary meaning of the word “dredging” is the removal of soil from the bottom waters by suction or scooping or other means. Gar-Con Development v. State, 468 So.2d 413 (Fla. App. 1 Dist. 1985).
The International Maritime Dictionary defines a dredge as:
A vessel or floating structure equipped with excavating machinery, employed in deepening channels and harbors, and removing submarine obstructions such as shoals and bars. De Kerchove, International Maritime Dictionary, Second Edition (1961), p. 241.
Accordingly, CBP has long-held that the term “dredging” within the meaning of 46 U.S.C. § 55109, is “the use of a vessel equipped with excavating machinery in digging up or otherwise removing submarine material.” See HQ 103692 (Dec. 28, 1978 published as Customs Service Decision (C.S.D.) 79-331); HQ 109108 (Nov.13, 1987); HQ 109910 (Jan. 26, 1989) published as C.S.D. 89-64.
With regard to 46 U.S.C. § 108, which defines the term “fisheries,” the Commercial Fishing Industry Vessel Anti-Reflagging Act of 1987 (“the Act,” Pub. L. 100-239; 101 Stat. 1778) amended the definition of “fisheries” to include the “processing, storing, and transporting (except in foreign commerce)” of fish and related fishery resources in United States navigable waters and the Exclusive Economic Zone (EEZ), as well as the catching-related activities provided for in the former definition. Accordingly, the definition of fisheries currently set forth in 46 U.S.C § 108 reads as follows:
“fisheries” includes processing, storing, transporting (except in foreign
commerce), planting, cultivating, catching, taking, or harvesting fish,
shellfish, marine animals, pearls, shells, or marine vegetation in the navigable waters of the United States or in the exclusive economic zone.
[Emphasis supplied]
Title 46, United States Code, §12113(b)(1) (46 U.S.C. § 12113(b)(1)) limits the employment in the fisheries to a vessel issued a certificate of documentation with a fishery endorsement, “subject to the laws of the United States regulating the fisheries” (see e.g., 16 U.S.C. § 1801, et seq., under which a foreign vessel may obtain a permit from the National Marine Fisheries Service to engage in fishing in the EEZ).
Under 46 U.S.C. § 12113(a), only a vessel eligible for documentation (i.e., at least 5 net tons and owned by a citizen) which was built in the United States may be endorsed for the fisheries. Pursuant to 46 U.S.C. § 12113(b), only a vessel so endorsed may engage in the fisheries. With regard to vessels of less than 5 net tons, CBP has long held that such vessels, if owned by United States citizens or by resident aliens and numbered pursuant to 46 U.S.C. § 12301 et seq., may engage in the fisheries even if foreign-built (see e.g., Treasury Decision (T.D.) 56382(6)). Legislative support for this provision may be found in 16 U.S.C. § 1802(43)(B).
With regard to an aquatic plant harvesting vessel, CBP has long-held that such a vessel is engaged in the fisheries (see C.S.D. 89-85 and rulings 110104 (April 19, 1989) and 110613 (April 5,1990)).
NAVIGABLE WATERS OF THE UNITED STATES:
As a threshold matter, we are compelled to consider the nature of the bodies of water upon which your client proposes to operate the Watermater Excavator. You couch your client’s inquiry in terms of “non-federal bodies of water.” Our examination in this matter is properly limited, however, to the navigable waters of the United States.
United States Customs and Border Protection, and its predecessor agency, the U.S. Customs Service, has long held that the coastwise laws, as well as the other navigation laws, are applicable to vessels engaged in activities in the territorial and navigable waters of the United States, its territories and possessions. See Headquarters Ruling Letter 110994 (May 24, 1990); Headquarters Ruling Letter 108345 (May 13, 1986). The territorial waters of the United States consist of the territorial sea, defined as the belt, three nautical miles wide seaward of the territorial sea baseline, and of the internal waters, landward of the territorial sea baseline, in cases where the baseline and coastline differs. Our definition notwithstanding, reference to the term territorial waters frequently includes both territorial seas and internal waters. I. Brownlie, Principles of Public International Law 183, n.2, (3d ed. 1979). This concept is reflected in the term navigable waters, which, as defined in Coast Guard regulations, include the territorial sea of the United States, the internal waters of the United States subject to tidal influence, and certain other internal waters that are not subject to tidal influence. 33 C.F.R. 2.05-25 (1992).
The question of whether or not a body of water or marine environment in which a vessel might operate is part of the navigable waters of the United States is generally not within CBP’s purview. The navigation laws administered by CBP are applicable only to those activities which take place in the navigable waters of the United States, its territories, and possessions. The United States Coast Guard determines whether a particular body of water is deemed to be navigable waters of the United States in order to ascertain its own jurisdiction to enforce the laws it administers. CBP, in ascertaining its own jurisdiction to enforce the navigation laws it administers, is strongly disposed to follow determinations of the Coast Guard in the absence of United States judicial decisions or Congressional enactments.
The test for navigability has been established by the federal courts through the years. This test consists of four essential elements that, when taken together, state that a navigable waterway of the United States must (1) be or have been (2) used or susceptible of use (3) in the customary modes of trade and travel on the water (4) as a highway for foreign or interstate commerce. See HQ 110994, dated May 24, 1990, and cases cited therein. If CBP is required to make such a determination, as a general rule, CBP follows the guidelines set forth in U.S. Coast Guard regulations as follows:
Except as provided in paragraph (b) of this section, [the terms] navigable waters of the United States, navigable waters, and territorial waters mean, except where Congress has designated them not to be navigable waters of the United States:
(1) Territorial seas of the United States;
(2) Internal waters of the United States that are subject to tidal influence; and
(3) Internal waters of the United States not subject to tidal influence that:
(i) Are or have been used, or are or have been susceptible for use, by themselves or in connection with other waters, as highways for substantial interstate or foreign commerce, notwithstanding natural or man-made obstructions that require portage, or
(ii) A governmental or non-governmental body, having expertise in waterway improvement, determines to be capable of improvement at a reasonable cost (a favorable balance between cost and need) to provide, by themselves or in connection with other waters, as highways for substantial interstate or foreign commerce.
33 C.F.R. 2.36(a)
EXCAVATING AND DREDGING:
While your letter characterizes the Watermaster Excavator as, “…essentially a floating backhoe with a maximum depth of 20 feet that is transported on land to non-federal (state) inland lakes,” the supporting materials describe the machine as a dredge. The color brochure provided by your client describes the Watermaster Excavator’s functions as backhoe dredging and suction dredging, as well as pile driving. It is further described as capable of being fitted with cutter suction pumps for suction dredging, various-sized buckets for backhoe dredging, and a clamshell bucket for environmental dredging. The Watermaster Excavator’s dredging capabilities are consistently highlighted in the supporting documentation provided by your client.
We are of the opinion that the Watermaster Excavator is a dredging vessel. Title 1 United States Code § 3 provides, “(t)he word “vessel” includes every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water.” The brochure describes the Watermaster Excavator’s mobility in water as being capable of cruising to the work site with its own propulsion system, and moving at the work site by means of it excavator boom, stabilizers and propeller. In Stewart v. Dutra Construction Company, 543 U.S. 481 (2005), the Supreme Court affirmatively held that a dredge was a vessel. The central inquiry under § 3 is whether the structure was a means of maritime transportation. Citing R. Hughes, Handbook of Admiralty Law §5, p. 14 (2d ed. 1920). As the Supreme Court held, dredges serve a waterborne transportation function, since in performing their work they carry machinery, equipment, and crew over water. Citing, e.g., Butler v. Ellis, 45 F. 2d 951, 955 (CA4 1930); and, The Hurricane, 2 F. 2d 70, 72 (ED Pa. 1924).
A review of the requirements for a coastwise endorsement applicable to the Watermaster Excavator found in 46 U.S.C. § 12112 indicates that a coastwise endorsement as required by 46 U.S.C. § 55109 may be issued for a vessel that satisfies the requirements of 46 U.S.C. § 12103, and was built in the United States. As your client indicates that the Watermaster Excavator dredge is built in Finland, it does not satisfy the requirements of 46 U.S.C. § 12112.
While your client does not specifically address the Watermaster Excavator’s net tonnage in the request, a review of the documentation provided indicates that it may admeasure less than 5 nets tons. Pursuant to 46 U.S.C. § 12102(b), “[a] vessel of less than 5 net tons may engage in a trade without being documented if the vessel otherwise satisfies the requirements to engage in the particular trade.” Thus, while exempt from documentation requirements, the U.S-build requirements remain applicable to the proposed use of the Watermaster Excavator. Therefore, only if the subject vessel is less than 5 net tons, built in the U.S., and owned by U.S. citizens, may it engage in dredging in United States navigable waters without violating the coastwise laws. Accordingly, the use of a foreign-built Watermaster Excavator vessel as a dredge in the navigable waters of the United States is prohibited by 46 U.S.C. § 55109.
AQUATIC VEGETATION AND TRASH REMOVAL:
We further note that the brochure provided by your client indicates that the Watermaster Excavator may be equipped with a rake for removing vegetation and trash. It is apparent that the subject vessels engaged in aquatic vegetation cutting and harvesting would be engaged in the fisheries within the meaning of 46 U.S.C. § 108. If foreign-built, regardless of tonnage, they would not be eligible for documentation for the fisheries under 46 U.S.C. § 12113. We note, however, that if they are less than 5 net tons and numbered pursuant to 46 U.S.C. § 12301 et seq., they could be considered vessels of the United States as discussed above and may engage in the fisheries provided they are owned by United States citizens or by resident aliens.
With respect to the applicability of the Jones Act, 46 U.S.C. § 55102, to these activities, it is well-settled in American maritime law that cargo is laden aboard a vessel when the vessel’s tackle is hooked onto the cargo; i.e., the “tackle to tackle” rule. “When cargo is hoisted by ship’s gear and tackle, the loading on occurs when the ship’s tackle is hooked onto the draft of cargo.” (Arnold W. Knauth, The American Law of Ocean Bills of Lading, 4th Ed., 1953, p. 145.) Knauth contends that “loading on” is best understood by relating it to some physical act of possession associated with the transfer of risk from a shore interest to a vessel interest. Id. Knauth’s position has been adopted in several American maritime cases. See, Karwill Machinery Corporation vs. Robert C. Herd & Company, Inc., United States District Court, District Of Maryland, Civil No. 8117, 1956 AMC 2217 (D. Md. 1956); and Federal Pacific Electric Co., v. American Export Lines, 73 Civ. 3746 (S.D.N.Y. 1974), 1975 AMC 157. It is noteworthy, however, that Knauth’s scholarship was a restatement of a principle long-established in American maritime law. For example, the Circuit Court, Southern District of New York, stated in 1867 in The Cordillera, “…as a general rule, when the cargo is properly placed on the slings and hooked to the tackle; … the duty of the ship begins with the hoisting of it to the deck of the ship. It is then in the possession of the apparatus of the ship, or the stevedores, and under their control and direction.” The Cordillera, 6 F. Cas. 545, 546 (C.C.S.D.N.Y. 1867).
We are of the opinion that there is no requirement for cargo to be physically lifted onto the vessel in order for it to be laded for the purposes of the coastwise laws. In the present matter, the vessel’s tackle includes the rake attachment. The cargo would be laden onto the vessel for the purposes of the coastwise laws when the vegetation was placed under the control of the rake, because at that point, the risk associated with the cargo would transfer from a shore interest to the vessel interest. Accordingly, cargo, in this case aquatic vegetation, would be laden on the vessel in a manner that would implicate the coastwise laws.
As stated above, the “Jones Act” (46 U.S.C. § 55102) provides that no merchandise shall 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 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 (i.e., a coastwise-qualified vessel). This statute applies even to the transportation of merchandise from point to point within a harbor. (See 19 CFR 4.80(a)). Pursuant to 46 U.S.C. § 55102(a)(2), the word “merchandise” includes “valueless material...”
In regard to any vessel used in U.S. territorial waters for transporting harvested vegetation to shore, it is apparent that such a vessel is engaged in the coastwise trade. Pursuant to section 4.80(a)(2), Customs Regulations (19 CFR 4.80(a)(2)), no foreign-built vessel, regardless of its tonnage, may engage in the coastwise trade.
With regard to trash removal, the same result obtains. CBP previously has held that such activities are subject to 46 U.S.C. § 55102, even if the material transported is valueless material under 46 U.S.C. § 55102(a)(2). See H050179, dated February 11, 2009; and, Headquarters Ruling Letter 110104, dated April 19, 1989. For purposes of the Jones Act, merchandise also includes “valueless material.” See 46 U.S.C. § 55102(a)(2). CBP Regulations promulgated under the authority of 46 U.S.C. § 55102 provide that a coastwise transportation of merchandise takes place when merchandise laden at a coastwise point is unladen at another coastwise point, regardless of origin or ultimate destination. See 19 C.F.R. § 4.80b(a). These regulations further clarify the term coastwise points as “including points within a harbor.” See 19 C.F.R. § 4.80(a).
As discussed supra, the understanding of the word “lade” is central to the analysis. As we stated above, it is well-settled in American maritime law that cargo is laden aboard a vessel when the vessel’s tackle is hooked onto the cargo; the “tackle to tackle” rule. We are of the opinion that there is no requirement for cargo to be physically lifted onto the vessel in order for it to be laden for the purposes of the coastwise laws. Regarding the collection of trash and debris, the vessel’s tackle would include the rake attachment. The trash and debris would be loaded onto the vessel for the purposes of section 55102 when it was collected and placed under the control of the rake, because at that point, the risk associated with the cargo would transfer to the vessel interest. Therefore, cargo, in this case trash and debris, would be laden on the vessel in a manner that would implicate section 55102.
Accordingly, a vessel used to collect floating trash and debris from the surface of the water (i.e. valueless material) constitutes an engagement in coastwise trade if such material was laden at one coastwise point and unladen at another coastwise point. For purposes of 46 U.S.C. § 55102, the point of lading is considered to be the point at which the floating trash and debris is collected. See Headquarters Ruling Letter 110104, dated April 19, 1989.
Since the subject vessels would be engaging in coastwise trade, a coastwise endorsement would be necessary. See Headquarters Ruling Letter 113846, dated May 5, 1997; and Headquarters Ruling Letter H024222, dated March 19, 2008. A coastwise endorsement may only be issued if a vessel is built in the United States, subject to certain exceptions not herein applicable. See 46 U.S.C. § 12112. It is within the purview of the USCG to determine whether the construction of a vessel 5 net tons or greater renders it U.S.-built for purposes of the navigation laws, including 46 U.S.C. § 55102. With respect to vessels less than 5 net tons, such determinations are within the jurisdiction of CBP. See Headquarters Ruling Letter 111188, dated September 14, 1990; Headquarters Ruling Letter 116373, dated February 9, 2005; Headquarters Ruling Letter 116623, dated May 3, 2006. If the vessel under consideration is 5 net tons or greater, we suggest you contact the USCG regarding this matter at:
U.S. Coast Guard
National Vessel Documentation Center
2039 Stonewall Jackson Drive
Falling Water, West Virginia 25419
(304) 271-2506
Pursuant to 46 U.S.C. § 12102(b), “[a] vessel of less than 5 net tons may engage in a trade without being documented if the vessel otherwise satisfies the requirements to engage in the particular trade.” Thus, no vessel exempt from documentation, specifically no vessel of less than 5 net tons, shall transport any passengers or merchandise between United States coastwise points unless the vessel is owned by a citizen of the United States and is entitled to or, except for its tonnage, would be entitled to be documented with a coastwise endorsement. See 19 C.F.R. § 4.80(a)(2). Therefore, only if the subject vessel is less than 5 net tons, built in the U.S., and owned by U.S. citizens, may it engage in coastwise trade without violating 46 U.S.C. § 55102. Accordingly, the use of the foreign-built Watermaster Excavator to collect trash and debris in the navigable waters of the United States is prohibited by 46 U.S.C. § 55102.
It is noteworthy that the instant matter is not our first examination of the Watermaster Excavator. In HQ 111188, dated September 14, 1990, we examined the proposed use of the Watermaster Excavator to preserve, restore, and rehabilitate inland waterways. In that matter, we ruled, in pertinent part, that the use of a foreign-built, multi-purpose excavating vessel to preserve, restore and rehabilitate inland waterways constituted dredging and was prohibited by the predecessor to 46 U.S.C. § 55109; and, the use of a foreign-built, multi-purpose excavating vessel to harvest aquatic vegetation on inland waterways constituted an engagement in the fisheries, and that such vessel was not eligible for a certificate of documentation with a fisheries endorsement and therefore was prohibited from engaging in such activity.
Similarly, in Ruling HQ H102989, dated June 10, 2010, we examined the proposed use in the navigable waters of the United States of a foreign-built, multi-functional amphibious machine, designed for such activities as weed cutting and harvesting, trash and debris collection, excavation and dredging, and oil spill cleanup. In that matter we also determined, in pertinent part, that the use of a foreign-built vessel as a dredge in the navigable waters of the United States was prohibited by 46 U.S.C. § 55109; the use of a foreign-built vessel to collect trash and debris for transportation between points within the navigable waters of the United States was prohibited by 46 U.S.C. § 55102; and, the harvesting and transportation of aquatic plants within the navigable waters of the United States by a foreign-built vessel constitutes an engagement in the fisheries within the meaning of 46 U.S.C. § 108 and the coastwise trade within the meaning of 46 U.S.C. § 55102. Such a vessel is prohibited from engaging in the fisheries pursuant to 46 U.S.C. § 12113 unless it meets the requirements of T.D. 56382(6), and is prohibited from engaging in the coastwise trade pursuant to 46 U.S.C. § 55102.
HOLDINGS:
The use of the Watermaster Excavator, a foreign-built vessel, as a dredge in the navigable waters of the United States is prohibited by 46 U.S.C. § 55109.
The use of the Watermaster Excavator, a foreign-built vessel, to collect trash and debris for transportation between points within the navigable waters of the United States is prohibited by 46 U.S.C. § 55102.
The use of the Watermaster Excavator, a foreign-built vessel, to harvest and transport aquatic plants within the navigable waters of the United States constitutes an engagement in the fisheries within the meaning of 46 U.S.C. § 108 and the coastwise trade within the meaning of 46 U.S.C. § 55102. Such a vessel is prohibited from engaging in the fisheries pursuant to 46 U.S.C. § 12113 unless it meets the requirements of T.D. 56382(6), and is prohibited from engaging in the coastwise trade pursuant to 46 U.S.C. § 55102.
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