HQ 0109849 - Application of the coastwise laws to a drilling vessel on the outer continental shelf (OCS). - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1990 HQ Rulings > HQ 0109391 - HQ 0220023 > HQ 0109849

HQ 109849

November 18, 1988

VES-3-15 CO:R:P:C 109849 PH

CATEGORY: CARRIER

Mr. Robert P. Baumgartner
Exxon Company, U.S.A.
Post Office Box 61707
New Orleans, Louisiana 70161-1707

RE: Application of the coastwise laws to a drilling vessel on the outer continental shelf (OCS).

Dear Mr. Baumgartner:

This is with reference to your letter of November 10, 1988, concerning the application of the coastwise laws to a self- propelled drilling vessel on the OCS after its anchors are deployed at a drilling site on the OCS but before actual drilling has commenced.

FACTS:

It is proposed to operate a non-coastwise-qualified mobile oil drilling vessel on the OCS of the United States. The eight 40,000 pounds anchors of the vessel, which are part of the vessel's permanent equipment, are to be deployed and resting on the bed of the OCS approximately 2 weeks before the actual spudding is to begin. It is anticipated that the vessel will remain in its anchored position for approximately 100 days.

ISSUE:

Whether a self-propelled drilling vessel is considered to be a coastwise point when it is at anchor at an OCS drilling site before it engages in drilling operations.

LAW & ANALYSIS:

The coastwise laws (e.g., 46 U.S.C. App. 289 and 883, 46 U.S.C. 12106 and 12110) prohibit the transportation of merchandise or passengers between points in the United States
embraced within the coastwise laws in any vessel other than a vessel built in and documented under the laws of the United States and owned by persons who are citizens of the United States.

Pursuant to section 4(a) of the Outer Continental Shelf Lands Act of 1953, as amended (43 U.S.C. 1333(a)) (OCSLA), the laws of the United States are extended to "... the subsoil and seabed of the outer Continental Shelf and to all artificial islands, and all installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing, or producing resources therefrom ... to the same extent as if the outer Continental Shelf were an area of exclusive Federal jurisdiction located within a State."

Under the foregoing provision, we have ruled that the coastwise laws are extended to mobile rigs during the period they are secured to or submerged onto the seabed of the OCS (Treasury Decision 54281(1)). Subsequent rulings applied the same principles to drilling platforms, artificial islands, and similar structures.

As indicated above, a drilling vessel is considered a coastwise point while attached to the seabed of the OCS for the purpose of drilling or exploring for resources from the OCS. A drilling vessel is considered to be so attached to the seabed of the OCS while engaged in drilling operations and while at anchor before or after engaging in drilling at that location. Any vessel transporting merchandise or passengers between the United States mainland or any other United States coastwise point and the vessel while it was considered to be a coastwise point would be required to be coastwise qualified.

HOLDING:

A self-propelled drilling vessel is considered to be a coastwise point when it is at anchor at an OCS drilling site before and after it engages in drilling operations.

Sincerely,

B. James Fritz

Previous Ruling Next Ruling