Scope of the term "merchandise" in 46 U.S.C. 883

HQ 110153 May 20, 1990 VES-03-17 CO:R:P:C 110153 RAH CATEGORY: Carriers Mr. Timothy R. McHugh Hoch & McHugh 160 State Street Boston, Massachusetts 02109 RE: Scope of the term "merchandise" in 46 U.S.C. 883 Dear Mr. McHugh: This is in response to your letter of March 22, 1989, in which you request a ruling concerning the scope of the term "merchandise" as used in 46 U.S.C. 883 and 19 C.F.R. 4.80. FACTS: According to your letter, it is the understanding of persons operating barges in the New England area that a barge carrying construction equipment or materials from one port or place in the United States to another port or place is not required to be documented under the laws of the United States when such equipment or material is owned by the barge owner. ISSUES: a) Is equipment, construction equipment and/or building material owned by the barge owner "merchandise" within the meaning of 46 U.S.C. 883 and 19 C.F.R. 4.80? b) If the answer to question a) is "yes," what is the scope of the term "harbor" for purposes of determining requirement for documentation as used in 19 C.F.R. 4.80(a)? LAW AND ANALYSIS The coastwise laws generally prohibit the transportation of merchandise between points in the United States embraced within the coastwise laws, either directly or via a foreign port, or for any part of such 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, or vessels to which the privilege of engaging in the coastwise trade is extended. 46 U.S.C. App. 883 and 19 C.F.R. 4.80. The term "merchandise," as used in 46 U.S.C. 883, is not defined for purposes of that provision. We have used the definition of "merchandise" found in section 401(c), Tariff Act of 1930, as amended (19 U.S.C. 1401(c)) in our application of section 883. "Merchandise" is defined in section 1401(c) as meaning "goods, wares, and chattels of every description, and [including] merchandise the importation of which is prohibited...." More specifically, in Headquarters Decision 105061, dated May 7, 1987, we held that construction equipment and materials constituted merchandise and could not be transported in a foreign-built, foreign-flag barge under section 883. Finally, we have held that it is immaterial that cargo transported may be owned by the vessel owner for purposes of section 883. Headquarters Decision 109649, 08-1-88. As to your request that we consider requirements for establishing title to vessels which are to be documented under the laws of the United States, please be aware that pursuant to 46 U.S.C. 12110(b), "A barge otherwise qualified to be employed in the coastwise trade may be employed, without being documented, in that trade on rivers, harbors, lakes (except the Great Lakes), canals, and inland waters." In response to your second inquiry, the term "harbor" is not specifically defined by statute or regulation for the purposes of 46 U.S.C. App. 883 and 19 C.F.R. 4.80. A harbor in its usual and ordinary sense means an indentation in the coast of a lake, sea, or ocean, extending into the country in such manner as to form an inlet or bay and sufficiently narrow between the headlands as to afford protection to vessels against the wind and storm upon the waters. People v. Kirsch, 35 N.W. 157 (1887 Mich.). Accord,: United States v. California, 100 S.Ct. 1994, 447 U.S. 1, 64 L.Ed. 2d. 681, rehearing denied in 101 S.Ct. 600, 449 U.S. 1028, 66 L.Ed. 491, in which "harbor" under the Convention on the Territorial Sea and the Contiguous Zone was held to be a body of water providing for safe anchorage and shelter for vessels; International Maritime Dictionary (DeKerchore, Second Edition). Perhaps the most succinct and thorough scope of the term harbor is "[A] port or haven for ships, a sheltered recess in the coast line of a sea, gulf, bay, or lake, most frequently at the mouth of a river." Gordon v. Blackton, 186 A. 690 (1935 N.J.). HOLDING: Equipment, construction equipment and/or building materials owned by the owner of a barge constitute merchandise the transportation of which is prohibited by 46 U.S.C. App. 883 and 19 C.F.R. 4.80, unless the same is transported in a vessel built in and documented under the laws of the United States and owned by persons who are citizens of the United States, or in a vessel to which the privilege of engaging in the coastwise trade has been extended. Barges which are not documented but are otherwise coastwise qualified, may transport merchandise on rivers, harbors, lakes (except the Great Lakes), canals, and inland waters. The scope of the term "harbor" is defined above. Sincerely, B. James Fritz Chief Carrier Rulings Branch