46 U.S.C. 883; Coastwise trade

HQ 113478 June 26, 1995 VES-3-R:IT:C 113478 GOB CATEGORY: Carriers John J. Hyde General Manager Security & Compliance Maersk Inc. Giralda Farms, Madison Avenue P.O. Box 880 Madison, NJ 07940-0880 RE: 46 U.S.C. 883; Coastwise trade Dear Mr. Hyde: This is in response to your letter dated June 14, 1995. FACTS: Your letter states as follows: ...we are requesting a ruling on whether the following is in violation of the coastwise laws. - Cargo ex the Far East arrives on our non-coastwise qualified vessel to the west Coast of the United States. It is then reladen with an immediate exportation entry aboard another of our vessels bound to South America. En route, the original shipper requests us to divert the cargo back to a U.S. port on the East Coast for delivery to a new customer. Would this be a violation of the coastwise laws? If so would it be a violation if the cargo was delivered to the original South American consignee who then books it for export to the U.S. with us or another carrier? - 2 - ISSUE: Whether the proposed activity is in violation of 46 U.S.C. App. 883. LAW AND ANALYSIS: 46 U.S.C. App. 883, the coastwise merchandise statute 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, documented under the laws of, and owned by citizens of the United States. Stated otherwise, section 883 prohibits the transportation of merchandise between two coastwise points by a vessel that is not 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. Although it is not totally clear from your letter, we assume that the vessel bound to South America upon which the cargo was reladen on the west coast of the United States is a non-coastwise-qualified vessel. The activity described supra would be a violation of 46 U.S.C. App. 883. The transportation of cargo from a point on the west coast of the U.S. to a point on the east coast of the U.S. is the coastwise transportation of merchandise which must be accomplished by a coastwise-qualified vessel. Similarly, if the cargo were delivered to the South American consignee and then transported to the United States, 46 U.S.C. App. 883 would be violated because part of the transportation of the merchandise would have been accomplished by a non-coastwise-qualified vessel. See the underlined language in the first paragraph on this page. HOLDING: The proposed activity would be violative of 46 U.S.C. App. 883. Sincerely, Arthur P. Schifflin Chief Carrier Rulings Branch