Coastwise trade; fish processing

HQ 110798 May 7, 1990 VES-3-06-CO:R:P:C 110798 KVS CATEGORY: Carriers Mr. Larry J. Smith Alaskan Harvest P.O. Box 1269 Sitka, Alaska 99835 Re: Coastwise trade; fish processing Dear Mr. Smith: This is in response to your letter dated January 17, 1989, which requests a ruling regarding the use of a foreign-built vessel for fish processing in U.S. waters. FACTS: You propose to purchase a vessel with a foreign-built hull which was engaged in fish processing in U.S. waters prior to 1987. You state that the vessel's documentation allows for "fish processing" but not for "coastwise trade". You state that you intend to have the vessel anchored in U.S. waters, where it will receive fish from fishing boats, process the fish at that location, and then deliver the processed fish to a shore-based facility in Sitka or Seattle. ISSUE: Whether a foreign-built vessel which receives fish and processes it while anchored in the territorial waters of the United States before transporting it to a shore-based facility is engaged in coastwise trade in violation of 19 U.S.C. 883. LAW AND ANALYSIS: Title 46, United States Code Appendix, section 883 (46 U.S.C. 883), often called the Jones Act, 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 (i.e., a coastwise-qualified vessel). - 2 - In interpreting section 883, Customs has ruled that a point in the United States embraced within the coastwise laws is a point within the territorial waters of the United States. The territorial waters of the United States consist of the territorial sea, defined as the belt, 3 nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline. Section 4.80b(a), Customs Regulations (19 CFR 4.80b(a) provides, in part, that: A coastwise transportation of merchandise takes places [sic], within the meaning of the coastwise laws, when merchandise laden at a point embraced within the coastwise law ("coastwise point") is unladen at another coastwise point, regardless of the origin or ultimate destination of the merchandise. The Customs laws in 19 U.S.C. 1401(c) define the term merchandise as "goods, wares, and chattels of every description, and includes merchandise the importation of which is prohibited...". Therefore, when fish are loaded onto a vessel anchored within the territorial waters of the United States, processed, and then transported to another coastwise point and unladen, a coastwise transportation has taken place. Thus, the activity in which Alaskan Harvest proposes to engage is in violation of 46 U.S.C. App. 883. HOLDING: A foreign-built vessel which receives fish and processes it while anchored in U.S. territorial waters before transporting it to a shore-based facility in the United States is engaging in coastwise trade in violation of 46 U.S.C. App. 883. Sincerely, B. James Fritz Chief Carrier Rulings Branch