Coastwise Trade; Foreign-Flag Vessel; Containers; Sixth Proviso; 46 U.S.C. App. § 883

HQ 115113 July 27, 2000 VES-3-03-RR:IT:EC 115113 GEV CATEGORY: Carriers Jimmy Collins Operations Fillette Green Shipping Services (USA) Corp. 3333 West Kennedy Blvd., Suite 207 Tampa, Florida 33609 RE: Coastwise Trade; Foreign-Flag Vessel; Containers; Sixth Proviso; 46 U.S.C. App. § 883 Dear Mr. Collins: This is in response to your fax dated July 26, 2000, regarding the proposed coastwise transportation of containers. Our ruling on this matter is set forth below. FACTS: The M/V JING AN CHENG, is a Panamanian-flag vessel that had 171 containers (23 loaded and 148 empty) laded onboard at New York. It is proposed to unlade the aforementioned containers in the port of Tampa, Florida, in order for the vessel to unlade steel rebars. Subsequent to the unlading, the subject vessel will proceed to Houston, Texas, where it will discharge the remaining steel rebars cargo. Upon completion of the steel rebars unlading in Houston, the vessel will return to Tampa to load a full cargo of phosphate products and relade the 171 containers which will have remained in Tampa for approximately ten days. The vessel will then proceed to Hong Kong. ISSUE: Whether the transportation of empty and/or loaded containers from New York to Tampa by a Panamanian-flag vessel as described above constitutes a violation of 46 U.S.C. App. § 883. - 2 - LAW AND ANALYSIS: Title 46, United States Code Appendix, § 883 (46 U.S.C. App. § 883, the merchandise coastwise law known as 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 United States and owned by persons who are citizens of the United States (i.e., a coastwise-qualified vessel). The so-called “Sixth Proviso” of 46 U.S.C. App. § 883 provides, in pertinent part: That upon such terms and conditions as the Secretary of the Treasury by regulation may prescribe, and if the transporting vessel is of foreign registry, upon a finding of the Secretary of State, that the government of the nation of registry extends reciprocal privileges to vessels of the United States, this section shall not apply to the transportation…by vessels of foreign registry, of (a) empty cargo vans, empty lift vans, and empty shipping tanks,… and (d) any empty instrument of international traffic…, if such articles…are owned or leased by the owner or operator of the transporting vessel and are transported for his use in handling his cargo in foreign trade;… (Emphasis added) The Customs Regulation promulgated pursuant to the provisions of the Sixth Proviso is set forth in § 4.93, Customs Regulations (19 CFR §4.93). The Republic of Panama is listed among those countries extending reciprocal privileges to vessels of the United States. (See §§ 4.93(b)(1) and (2)) Furthermore, you state that the empty containers under consideration are owned or leased by the operator of the M/V JING AN CHENG, CTO Container Lines Hong Kong, and are transported for his use in handling his cargo in foreign trade. Accordingly, while the transportation of the 23 loaded containers from New York to Tampa by the M/V JING AN CHENG would constitute a violation of 46 U.S.C. App. § 883, the transportation of the 148 empty containers between these two coastwise points by this vessel would not constitute such a violation pursuant to 19 CFR § 4.93. - 3 - HOLDING: The transportation of loaded containers from New York to Tampa by a Panamanian-flag vessel as described above constitutes a violation of 46 U.S.C. App. § 883. The transportation of empty containers between these two coastwise points is not a violation pursuant to 19 CFR § 4.93. Sincerely, Acting Chief Entry Procedures and Carriers Branch