OT:RR:BSTC:CCR H254385 KLQ
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RE: 46 U.S.C. §§ 55102 and 55103; 19 C.F.R. §§ 4.80a and 4.80b; [ ]; Coastwise Transportation.
Dear [ ]:
This is in response to your June 10, 2014, ruling request on behalf of your client, [ ], in which you request a ruling determining whether the proposed operation of a non-coastwise-qualified vessel would constitute a violation of 46 U.S.C. §§ 55102 and 55103. Our decision follows.
FACTS
The following facts are from your ruling request and email to this office, dated June 18, 2014. The [ ] (“vessel”), a non-coastwise-qualified vessel, will perform platform installation operations in the [ ][hereinafter “U.S. territorial waters”] at the coordinates of [ ]. The vessel will depart from [ ][hereinafter “foreign port”] to U.S. territorial waters with its marine crew and certain articles to be used in the installation of the platform. Two cranes attached to the structure of the vessel, as well as an auxiliary crane, will be used in the installation operations.
Once in U.S. territorial waters, the vessel will have mooring winches installed aboard which will be transported by a coastwise-qualified vessel from an [ ] port to the vessel. The vessel will then be connected to pre-set anchors which were transported from a United States (“U.S.”) port by coastwise-qualified vessels and set on the seabed by coastwise-qualified anchor handling vessels. During the course of the project, it may be necessary to re-position one or more of the anchors. In such an instance, the vessel will remain attached to the anchors. The retrieval, movement, and placement of the anchors to a new location will be done by a coastwise-qualified anchor-handling vessel. During the project, the vessel will be required to reposition itself at approximately four different “stations” around the installation site.
There are three scenarios for the operation of the cranes. In the first scenario, a crane will pick up an item from a coastwise-qualified barge and place it on the seabed. In the second scenario, the crane will pick up an item from a coastwise-qualified barge and temporarily place the item on the deck of the vessel. The same crane will then lift the item from the vessel and place it on the seabed. In the final scenario, the crane will pick up an item from a coastwise-qualified barge and temporarily place it on the deck of the vessel, the vessel’s other crane will then pick up the item from the vessel’s deck and place it on the seabed. Once secured at each station, the vessel will remain stationary, except for incidental movement related to the lifting operation.
In addition, during the course of the project, U.S. coastwise-qualified vessels will transport certain articles and persons from U.S. coastwise points to the vessel. Specifically, coastwise-qualified vessels will transport work crews from the vessel to U.S. ports.
ISSUES
Issue 1
Passenger Vessel Services Act (“PVSA”) 46 U.S.C. § 55103
Whether the transportation of representatives of the project owner and vessel crew from U.S. coastwise points to the vessel while the vessel is in U.S. territorial waters violates 46 U.S.C. § 55103.
Whether the transportation of certain individuals on board the vessel between points in U.S. territorial waters violates 46 U.S.C. § 55103.
Whether the transportation of work crews from the vessel, which is anchored in U.S. territorial waters, to U.S. coastwise points violates 46 U.S.C. § 55103.
Issue 2
Jones Act 46 U.S.C. § 55102
Whether the transportation of certain articles from a foreign port to U.S. territorial waters violates 46 U.S.C. § 55102.
Whether the transportation of certain articles between U.S. coastwise points and the vessel violates 46 U.S.C. § 55102.
Whether the movement and transportation of the spread mooring system and anchors attached to the vessel from one station to another station in the installation site violates 46 U.S.C. § 55102.
Whether the movement of the merchandise between points in U.S. territorial waters by use of the vessel’s cranes violates 46 U.S.C. § 55102.
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. 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.
Issue 1
Passenger Vessel Services Act (“PVSA”) 46 U.S.C. § 55103
The coastwise law applicable to the carriage of passengers is found in 46 U.S.C. § 55103 and provides that:
(a) In General. Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not transport passengers between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel-
(1) is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and
(2) has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement.
(b) Penalty. The penalty for violating subsection (a) is $300 for each passenger transported and landed.
Pursuant to 19 C.F.R § 4.50(b), “[a] passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation, navigation, ownership, or business of the vessel.”
The Transportation of Representatives of the Project Owner and Vessel Crew from U.S. Coastwise Points to the Vessel while the Vessel is in U.S. Territorial Waters.
You indicate that coastwise-qualified vessels will transport representatives of the project owner and vessel crew from ports in the U.S. to the vessel and back to ports in the U.S. while the vessel is anchored in U.S. territorial waters. The coastwise laws prohibit the transportation of passengers between ports or places in the U.S. unless the vessel is coastwise-qualified. Insofar as a coastwise-qualified vessel will conduct the transportation between the U.S. ports and the vessel, the transportation is not in violation of 46 U.S.C. § 55103.
The Transportation of Certain Individuals on Board the Vessel between Points in U.S. Territorial Waters.
You indicate that the vessel will need to reposition itself approximately four times within U.S. territorial waters during the installation project. Therefore, due to the act of repositioning, the vessel will move from one coastwise point to another.
The coastwise laws prohibit a non-coastwise-qualified vessel from transporting passengers between ports or places in the United States. Pursuant to CBP regulations, “[a] passenger…is any person carried on a vessel who is not connected with the operation, navigation, ownership, or business of the vessel.”
The vessel will transport two “position surveyors.” These individuals operate certain accuracy equipment that measures the precise location of the vessel. The accuracy provided by the equipment will ensure that the vessel is properly positioned at the new location in order to continue with the installation operations. Insofar as the subject individuals are providing the skills necessary for the successful operation and navigation of the vessel during the installation project, they are not passengers for purposes of 46 U.S.C. § 55103. Insofar as the surveyors are not passengers, the transportation of the subject individuals is not in violation of 46 U.S.C. § 55103.
The vessel will also transport the project superintendent. The project superintendent will provide guidance to the master of the vessel, using input from the surveyors, on the correct positioning of the vessel in order to continue the lifting operations. Insofar as the positioning of the vessel and the lifting operation concern the operation, navigation, and business of the vessel, the project superintendent is not a passenger for purposes of 46 U.S.C. § 55103. Insofar as the project superintendent is not a passenger, the transportation of the subject individual is not in violation of 46 U.S.C. § 55103.
Transportation of Work Crews from the Vessel, which is Anchored in U.S. Territorial Waters, to U.S. Coastwise Points.
You indicate that coastwise-qualified vessels will transport work crews from the vessel while it is anchored in U.S. territorial waters to a U.S. port. The coastwise laws prohibit the transportation of passengers between ports or places in the U.S. unless the vessel is coastwise-qualified. Insofar as the vessel transporting the crew from the [ ] to a U.S. coastwise port is coastwise-qualified, the transportation is not in violation of 46 U.S.C. § 55103.
Issue 2
Jones Act 46 U.S.C. § 55102
Pursuant to 46 U.S.C. § 55102, 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 has a coastwise endorsement.
Pursuant to 46 U.S.C. § 55102(a), “merchandise, includes (1) merchandise owned by the United States Government, a State, or a subdivision of a State; and (2) valueless material.” As such, any cargo, regardless of its value or ownership, would be considered merchandise for the purpose of 46 U.S.C. § 55102.
CBP Regulation 19 C.F.R. § 4.80b(a) provides in relevant 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.
Transportation of Certain Articles from a Foreign Port to U.S. Territorial Waters.
In the instant case, the vessel will transport articles from a foreign port to U.S. territorial waters. The coastwise laws prohibit a non-coastwise-qualified vessel from transporting merchandise between points in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel has a coastwise endorsement. Insofar as the vessel will transport articles from a foreign port to a point in the United States, the transportation is not in violation of 46 U.S.C. § 55102.
The Transportation of Certain Articles between U.S. Coastwise Points.
The Transportation of Certain Articles between U.S. Coastwise Points and the Vessel while it is Anchored in U.S. Territorial Waters.
The ruling request indicates that while the vessel is moored in U.S. territorial waters, coastwise-qualified vessels will transport certain articles between U.S. ports and the vessel. The coastwise laws prohibit a non-coastwise-qualified vessel from transporting merchandise between points in the United States to which the coastwise laws apply, either directly or via a foreign port. Insofar as coastwise-qualified vessels will transport the articles from U.S. coastwise points to the vessel, and the vessel will remain stationary while these articles are onboard, the transportation is not in violation of 46 U.S.C. § 55102.
The Transportation of Certain Articles between U.S. Coastwise Points in U.S. Territorial Waters while the Vessel is not Anchored in U.S. Territorial Waters.
The ruling request indicates while the vessel is moored in U.S. territorial waters, coastwise-qualified vessels will transport certain articles from U.S. ports to the vessel. However, the ruling request also indicates that the vessel will be required to move within the installation site. In these instances, when the vessel is required to move and articles originating from U.S. points are onboard, prior to the vessel moving, coastwise-qualified vessels will lade the articles unladen from the vessel and transport the articles to the new station in the site. The coastwise-qualified vessels will meet the vessel at the new site and lade the articles on the vessel once more. This process will be repeated each time the vessel is required to move and articles originating from a U.S. coastwise point are onboard. The coastwise laws prohibit a non-coastwise-qualified vessel from transporting merchandise between points in the United States to which the coastwise laws apply, either directly or via a foreign port. Insofar as coastwise-qualified vessels will transport the articles between U.S. coastwise points, the transportation is not in violation of 46 U.S.C. § 55102.
The Movement and Transportation of the Spread Mooring System and Anchors Attached to the Vessel from One Station to another Station in the Installation Site.
During the project, the vessel will be required to move. The vessel will move in one of two ways. In the first instance, the vessel will re-position itself by taking in and paying out on its mooring wires via the use of the vessel’s mooring winches. The ruling request indicates that coastwise-qualified vessels will transport the mooring system from one station to another within U.S. territorial waters. In the second instance, the vessel’s anchors will be required to move. In those instances, the vessel will remain attached to the anchors. The retrieval, movement, and placement of the anchors to a new location will be done by coastwise-qualified anchor-handling vessels. The coastwise laws prohibit a non-coastwise-qualified vessel from transporting merchandise between points in the United States to which the coastwise laws apply, either directly or via a foreign port. Insofar as coastwise-qualified vessels will transport the moorings and the anchors between coastwise points, the transportation is not in violation of 46 U.S.C. § 55102.
Movement of the Vessel’s Merchandise between Points in U.S. Territorial Waters by Use of the Vessel’s Cranes.
The ruling request indicates that two cranes, and on occasion an auxiliary crane, will operate on the vessel. The operation of the cranes will follow one of three scenarios: (1) a crane will pick up an item from a coastwise-qualified barge and place it on the seabed; (2) the vessel’s crane will pick up an item from a coastwise-qualified barge, place it on the deck of the vessel, and then pick up the item and place it on the seabed; and (3) the vessel’s crane will pick up an item from a coastwise-qualified barge and temporarily place it on the deck of the vessel. The vessel’s other crane will then pick up the item from the vessel’s deck and place it on the seabed. The vessel will remain stationary in all three scenarios.
In HQ 116111 (Jan. 30, 2004), a foreign-flagged crane barge, moored in place with four anchors, was used to construct two breakwaters in Alaska. While the crane barge remained stationary, the crane on the barge lifted rocks from a supply barge and placed the rocks in the water. CBP held that the use of a foreign-flagged crane barge did not constitute a violation of 46 U.S.C. § 55102. CBP reasoned that:
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.
[emphasis and footnote added].
In the instant matter, you indicate that the cranes will conduct the lifting operation and the vessel will remain stationary, except for movement incidental to the lifting operation. Insofar as the vessel is not conducting any part of the movement of the articles in any of the three scenarios, there is no violation of 46 U.S.C. § 55102.
HOLDING
Issue 1
Passenger Vessel Services Act 46 U.S.C. § 55103
The transportation of representatives of the project owner and vessel crew from U.S. coastwise points to the vessel while the vessel is in U.S. territorial waters, as described in the facts above, does not violate 46 U.S.C. § 55103.
The transportation of certain individuals on board the vessel between points in U.S. territorial waters, as described in the facts above, does not violate 46 U.S.C. § 55103.
The transportation of work crews from the vessel, which is anchored in U.S. territorial waters, to U.S. coastwise points, as described in the facts above, does not violate 46 U.S.C. § 55103.
Issue 2
Jones Act 46 U.S.C. § 55102
The transportation of certain articles from a foreign port to U.S. territorial waters, as described in the facts above, does not violate 46 U.S.C. § 55102.
The transportation of certain articles between U.S. coastwise points and the vessel, as described in the facts above, does not violate 46 U.S.C. § 55102.
The movement and transportation of the spread mooring system and anchors attached to the vessel from one station to another station in the installation site, as described in the facts above, does not violate 46 U.S.C. § 55102.
The movement of the merchandise between points in U.S. territorial waters by use of the vessel’s cranes, as described in the facts above, does not violate 46 U.S.C. § 55102.
Sincerely,
Lisa L. Burley
Chief/Supervisory Attorney-Advisor
Cargo Security, Carriers and Restricted Merchandise Branch
Office of International Trade, Regulations and Rulings
U.S. Customs and Border Protection