46 U.S.C. App. 883; Coastwise transportation or merchandise; 46 U.S.C. App. 316(a); Towing

HQ 226667 January 19, 1996 VES-3-RR:IT:EC 226667 GOB CATEGORY: Carriers Mr. Bob Tabone Fabrication Manager Aker Gulf Marine P.O. Box C - FM 1069 S. Ingleside, TX 78362-1302 RE: 46 U.S.C. App. 883; Coastwise transportation or merchandise; 46 U.S.C. App. 316(a); Towing Dear Mr. Tabone: This is in response to your letter dated January 11, 1996. You provided additional factual information to Gerry O'Brien of my staff by telephone on January 17, 1996. FACTS: Aker Gulf Marine ("Aker") has constructed a vessel ("the vessel") for one of its clients. The vessel is now on land in Aransas Pass, Texas. Scenario One The vessel will be placed on a "ballasted-down", non-coastwise-qualified barge at a coastwise point in Texas within the port of Corpus Christi and transported by a barge to a coastwise point where there is a water depth of 45 feet. At that point the vessel will be floated off the barge. Scenario Two The vessel will be placed on the "ballasted-down", non-coastwise-qualified barge at the same coastwise point as in scenario one. The vessel will be transported by the barge to a point beyond the three-mile limit such that the barge and vessel are not in coastwise waters. At that point, the vessel will be floated off the barge. The vessel will then be towed by a towing vessel back to the precise same point at which the vessel was placed on the barge. ISSUE: Does 46 U.S.C. App. 883 prohibit the transportation of the barge, as described supra? LAW AND ANALYSIS: Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. 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. 19 U.S.C. 1401(c) defines "merchandise," in pertinent part, as follows: "goods, wares, and chattels of every description..." 46 U.S.C. App. 316(a) prohibits the use of a non-coastwise-qualified vessel to tow any vessel, other than a vessel in distress, between ports or places in the United States embraced within the coastwise laws, either directly or by way of a foreign port, or to do any part of such towing, or to tow any such vessel between points in a harbor of the United States. 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. The proposed transportation in scenario one is prohibited by 46 U.S.C. App. 883 because it involves the transportation of merchandise, i.e., the vessel, between two coastwise points. Pursuant to 19 U.S.C. 1401(c), the vessel is merchandise. The proposed transportation in scenario two is not prohibited by 46 U.S.C. App. 883 because it does not involve the transportation of merchandise between two coastwise points. The transportation begins and ends at the same coastwise point, i.e., "the precise same point," as stated in the Facts section. This determination is consistent with our previous determinations. For example, in Ruling 109576 dated July 12, 1988, we held: The use of a foreign-flag vessel to transport a diving bell, its equipment, and divers from a coastwise point to the outer Continental Shelf for the purpose of supporting diving operations from a stationary, unanchored position is permissible under the coastwise laws. The vessel must, however, return to the same location at which it took the equipment and personnel aboard in order to lawfully discharge the equipment and personnel. (Emphasis supplied.) In that ruling, we also stated: ...it would be a violation were the equipment to be discharged at any point other than the precise point at which it was taken aboard at the beginning of the voyage. You must, therefore, return to the place of loading in order to discharge the equipment and personnel. (Emphasis supplied.) The matter at issue here is different from the more typical case where merchandise is laded and unladed at the same coastwise point. Here, the vessel is taken beyond the three-mile limit where it is floated off the barge, and the vessel is then towed back to the same coastwise point at which it was loaded onto the barge. The result is the same, however, because only one coastwise point is involved. We note additionally that since the vessel is to be towed back to the precise same coastwise point, the towing operation does not have to be accomplished by a coastwise-qualified vessel. 46 U.S.C. App. 316(a) does not apply since there is no towing between two coastwise points (or from one coastwise point to a second coastwise point). Further, in a movement separate from the tow of the vessel, the barge will have to be towed from the point beyond the three-mile limit back to a coastwise point. If the barge is not towed back to the same coastwise point at which the vessel was loaded thereon and at which the tow of the barge to the point beyond the three-mile limit commenced, such tow must be accomplished by a coastwise-qualified vessel pursuant to 46 U.S.C. App. 316(a). HOLDINGS: As detailed supra: (a) the transportation described in scenario one is prohibited by 46 U.S.C. App. 883; and (b) the transportation described in scenario two is not prohibited by 46 U.S.C. App. 883. Sincerely, Director, International Trade Compliance Division