HQ 0109708 - Pipe laying by a foreign vessel on the outer Continental Shelf - United States International Trade Commision Rulings

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HQ 109708

October 19, 1988

VES-3-16 CO:R:P:C 109708 DHR

CATEGORY: CARRIER

John W. McConnell, Esq.
Haight, Gardner, Poor & Havens
2828 Pennsylvania Avenue, NW.
Washington D.C. 20007

RE: Pipe laying by a foreign vessel on the outer Continental Shelf

Dear Mr. McConnell:

This is with reference to your letter of August 22, 1988, concerning the laying of pipe on the outer Continental Shelf.

FACTS:

The owner of a Panamarian-flag vessel plans to bid on laying pipe between structures on the outer Continental Shelf. The pipe would be loaded on board in a U.S. port and laid on the outer Continental Shelf between structures which are on the seabed for the purpose of exploring for or producing mineral resources and/or an existing pipeline. Upon completion of the pipelaying, any pipe and pipe laying equipment will be transported back to the point of loading on a barge qualified to engage in coastwise transportation.

ISSUE:

(1) Whether the proposed pipelaying activities, as described, would be in violation of 46 U.S.C. 883 or any other law.

(2) Whether the persons on the vessel who are to carry out welding and pipelaying are "passengers" as that term is used in 46 U.S.C. 289 or any other law.

LAW AND ANALYSIS:

(1) Section 883, title 46, United States Code, prohibits, with exceptions not relevant here, a foreign-built or foreign- flag vessel from transporting merchandise between points embraced within the coastwise laws of the United States. The Customs Service has held that the paying out of pipe in the
course of laying it on the sea bed is not a "transportation" within the meaning of section 883. The legitimate stores and equipment of a vessel, including, in the case of a pipelaying vessel, material and articles necessary for the laying of pipe, are not considered to be "merchandise" within the meaning of section 883.

(2) Pursuant to section 4.50(b) of the Customs Regulations (19 CFR 4.50(b)) a passenger is any person who is carried on a vessel who is not connected with the vessel's ownership, navigation, operation, or business. As the persons who are on the vessel to lay the pipe and to engage in related activities are certainly connected with the business of the vessel, such persons would not be considered passengers.

HOLDING:

The Customs Service administers no law which would prohibit the pipelaying operation on the outer Continental Shelf, as described in your letter of August 22, 1988.

Sincerely,

B. James Fritz

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