Request for Ruling on "Coastwise Trade"

HQ 109831 November 14, 1988 VES-3 CO:R:P:C 109831 CATEGORY: Carriers Harold K. Watson, Esq. Liddell, Sapp, Zivley, Hill & LaBoon Texas Commerce Tower Houston, Texas 77002 RE: Request for Ruling on "Coastwise Trade" Dear Mr. Watson: This is in reference to your letter of October 24, 1988, requesting a ruling as to whether certain floating cranes would be permitted to engage in stevedoring activities in the United States. FACTS: Your client, a U.S. corporation, wishes to purchase two floating cranes for use in the United States. These cranes were built in the United States and subsequently sold to non- U.S. interests for use in stevedoring operations in a foreign country. The subject cranes would not be used to transport cargo. Rather, they would remain stationary while loading and unloading bulk cargoes from ship to shore or from shore to ship. ISSUE: Whether the use of U.S.-built, foreign-owned floating cranes subsequently sold to a U.S. corporation for stevedoring operations in the United States would be prohibited by 46 U.S.C. App. 883. LAW AND ANALYSIS: Title 46, United States Code Appendix, section 883 (46 U.S.C. App. 883), provides, in part, 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. As interpreted by the Customs Service, section 883 also prohibits the engagement in the coastwise trade by any vessel which had the right to engage in the coastwise trade but was sold foreign, in whole or in part, or was placed under foreign registry. The Customs Service has long held that the use of a non-coastwise-qualified crane vessel to load and unload cargo is not coastwise trade and does not violate 46 U.S.C. App. 883, provided, that any movement of the 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. However, movement of merchandise while it is suspended from the crane, even between two points within a harbor, which is effected by a movement of the vessel which is neither necessary nor incidental to a lifting operation by the crane would constitute coastwise transportation of merchandise within the purview of 46 U.S.C. App. 883. Accordingly, the use of the non-coastwise-qualified floating cranes as described above, would not violate the coastwise laws, assuming that no part of the movement of the bulk cargoes being loaded or unloaded is effected by a movement of the floating cranes which is neither necessary nor incidental to the lifting operation by the cranes. HOLDING: The use of U.S.-built, foreign-owned floating cranes subsequently sold to a U.S. corporation for stevedoring operations in the United States would not be prohibited by 46 U.S.C. App. 883, provided, that no part of the movement of the bulk cargoes being loaded or unloaded is effected by a movement of the crane vessels which is neither necessary nor incidental to the lifting operations by the cranes. Sincerely, B. James Fritz Chief Carrier Rulings Branch