46 U.S.C. § 55102; 19 C.F.R. § 4.80a; Coastwise Transportation.

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H271902 February 4, 2016 VES-3-02-OT:RR:BSTC:CCR H271902 KLQ CATEGORY: Carriers Anne Mickey Cozen O’Connor 1200 19th Street, N.W. Washington, D.C. 20036 RE: 46 U.S.C. § 55102; 19 C.F.R. § 4.80a; Coastwise Transportation. Dear Ms. Mickey: This is in response to your January 8, 2016, ruling request on behalf of your client, in which you request a ruling determining whether the proposed transportation would constitute a violation of 46 U.S.C. § 55102. Our decision follows. FACTS The following facts are from your ruling request and email to this office, dated January 13, 2016. Your client intends to operate a U.S. flagged, non-self-propelled barge with a registry endorsement, [ ] (“Barge”). Your client proposes to use the Barge beginning in August 2016 in the territorial waters of the United States (“U.S.”), predominately in the harbors of [ ]. Your client proposes three scenarios involving the Barge. Scenario One: Canadian-flagged vessels will transport cement from [ ] to either [ ] or [ ]. In the harbor, either in [ ] or [ ], the subject Barge will be moored and located between a dock and the Canadian-flagged cement vessel. The Barge will use a ship unloader, an infrastructure of pipes, to suck cement off of the Canadian-flagged vessel and into the Barge’s holding tanks. As the second holding tank fills with cement, the ship unloader equipment will pump the cement out of the first holding tank and into a storage facility on shore. Scenario Two: On occasion, the Barge will be repositioned alongside the Canadian-flagged vessel to facilitate the movement of the cement from the vessel to the Barge. The Barge will be repositioned by individuals manipulating work lines and winches. The Barge will only be repositioned when the holding tanks are empty. Scenario Three: Coastwise-qualified tugboats will tow the Barge between [ ] and [ ]. Your client indicates that during these transportations, the Barge’s holding tanks will be empty. ISSUES Whether the proposed use of the Barge in scenario one would constitute a violation of 46 U.S.C. § 55102? Whether the proposed transportation in scenario two would constitute a violation of 46 U.S.C. § 55102? Whether the proposed transportation in scenario three would constitute a violation of 46 U.S.C. § 55102? LAW AND ANALYSIS Pursuant to 46 U.S.C. § 55102, which provides, in pertinent part: Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not provide any part of the transportation of merchandise by water, or by land and water, between points in the United States to which the coastwise laws apply, either directly or via foreign port, unless the vessel— (1) is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and (2) has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement. 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. Pursuant to 46 U.S.C. § 55102(a), “merchandise, includes (1) merchandise owned by the United States Government, a State, or a subdivision of a State; and (2) valueless material.” As such, any cargo, regardless of its value or ownership, would be considered merchandise for the purpose of 46 U.S.C. § 55102. The regulations promulgated under the authority of 46 U.S.C. § 55102(a), provide in pertinent part: A coastwise transportation of merchandise takes place, within the meaning of the coastwise laws, when merchandise laden at a point embraced within the coastwise laws (“coastwise point”) is unladen at another coastwise point, regardless of the origin or ultimate destination of the merchandise. Scenario One In scenario one, you state that the Barge will be moored at a point in U.S. territorial waters. The Barge will use a ship unloader, an infrastructure of pipes, to suck cement off of the Canadian-flagged vessel and into the Barge’s holding tanks. As the second holding tank fills with cement, the ship unloader equipment will pump the cement out of the first holding tank and into a storage facility on shore. The coastwise laws prohibit a non-coastwise-qualified vessel from transporting merchandise between points in the United States to which the coastwise laws apply, either directly or via a foreign port. In the present case, the cement will move by ship unloader equipment, which is an infrastructure of pipes, and not by the movement of the Barge. Insofar as the Barge will not transport the cement between coastwise points, the use of the Barge is not a violation of 46 U.S.C. § 55102. Scenario Two In scenario two, you state that on occasion, the Barge will be repositioned alongside the Canadian-flagged vessel by individuals manipulating work lines and winches. The Barge will only be repositioned when the holding tanks are empty. The coastwise laws prohibit a non-coastwise-qualified vessel from transporting merchandise between points in the United States to which the coastwise laws apply, either directly or via a foreign port. Insofar as the Barge would be empty, it will not transport merchandise. Therefore, the proposed movement of the Barge described in scenario two is not a violation of 46 U.S.C. § 55102. Scenario Three In scenario three, you state that coastwise-qualified tugboats will tow the Barge between coastwise points in U.S. territorial waters. Your client indicates that during these transportations, the Barge’s holding tanks will be empty. The coastwise laws prohibit a non-coastwise-qualified vessel from transporting merchandise between points in the United States to which the coastwise laws apply, either directly or via a foreign port. Insofar as the vessels conducting the towing are coastwise-qualified, and insofar as the Barge itself will not transport merchandise, the proposed transportation described in scenario three is not a violation of 46 U.S.C. § 55102. HOLDING The proposed use of the Barge in scenario one would not constitute a violation of 46 U.S.C. § 55102. The proposed transportation in scenario two would not constitute a violation of 46 U.S.C. § 55102. The proposed transportation in scenario three would not constitute a violation of 46 U.S.C. § 55102. Sincerely, Lisa L. Burley Chief/Supervisory Attorney-Advisor Cargo Security, Carriers and Restricted Merchandise Branch Office of International Trade, Regulations and Rulings U.S. Customs and Border Protection