HQ 0109383 - Applicability of 46 U.S.C. App. 251(a) to the transshipment in territorial waters of fish products received on the high seas by the transshipping vessel as whole fish and processed on board that vessel - United States International Trade Commision Rulings

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HQ 109383

March 24, 1988

VES-7-03 CO:R:P:C 109375/109383 PH

CATEGORY: CARRIER

Myron H. Nordquist, Esq.
Kelley, Drye & Warren
1330 Connecticut Avenue, NW.
Washington, D.C. 20036

RE: Applicability of 46 U.S.C. App. 251(a) to the transshipment in territorial waters of fish products received on the high seas by the transshipping vessel as whole fish and processed on board that vessel

Dear Mr. Nordquist:

This in response to your letters of February 19, 1988, in which you request a ruling on the applicability of the Nicholson Act to certain described fishing operations.

FACTS:

You state that your client plans to enter into a fishery joint venture. In this joint venture, your client will organize United States-flag fishing vessels to catch fish and transfer them while still in the cod end to a foreign-flag processing ves- sel in the United States exclusive economic zone (EEZ) off the East Coast of the United States. Once aboard the foreign-flag processing vessel, the transferred whole fish will be processed into various fishery products, including fish oil.

You state that your client wishes to transport this processed fish to one of two locations: (1) a sheltered area that is with- in United States territorial waters but is not a "port" in any physical sense whatsoever; or (2) a United States port as that term is commonly understood. At one of these locations your client plans to have the processing vessel transfer the fish oil to a foreign-flag transport vessel which would then depart for an overseas port with the fish oil as cargo. During the course of this transfer of the fish oil, you state that the processing vessel would not touch "United States territory" in any way.

For purposes of this inquiry, you ask that we assume that the joint venture complies with all requirements of United States law other than the provisions of the Nicholson Act.

ISSUES:

1. Is the transshipment at a point in United States territorial waters which is not a "port" in any physical sense whatsoever of fish products from a foreign-flag vessel to another vessel for transportation abroad a "landing in a port of the United States," as that phrase is used in 46 U.S.C. App. 251(a)?

2. Does 46 U.S.C. App. 251(a) prohibit the landing by a foreign-flag vessel in a port of the United States of fish prod- ucts processed on that vessel from fish it received whole from catching vessels on the high seas?

LAW AND ANALYSIS:

Under the Act of September 2, 1950, as amended (chapter 842, 64 Stat. 577; 46 U.S.C. App. 251(a), often called the Nicholson Act):

Except as otherwise provided by treaty or convention to which the United States is a party, no foreign-flag vessel shall, whether documented as a cargo vessel or otherwise, land in a port of the United States its catch of fish taken on board such vessels on the high seas or fish products processed therefrom, or any fish or fish products taken on board such vessel on the high seas from a vessel engaged in fishing operations or in the processing of fish or fish products.

For purposes of this statute, the high seas are those waters outside the territorial waters of the United States or those of any other nation. The territorial waters of the United States consist of the territorial sea, defined as the belt, 3 nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline.

The Customs Service has consistently held that the transshipment in United States territorial waters of fish or fish products caught or taken on board on the high seas, including the EEZ of the United States, from the foreign-flag vessel which caught or took on board the fish or fish products to another ves- sel, whether or not the fish or fish products are to be exported, is a landing of the fish or fish products prohibited by 46 U.S.C. App. 251(a). We have so held regardless of whether the point in territorial waters where transshipment occurs is what you describe as a "port" in a "physical sense" (see, e.g., our ruling dated January 26, 1981, file number 104779, copy enclosed for your convenience).

Title 46, United States Code Appendix section 251(a), prohibits the landing by a foreign-flag vessel in a port of the United States of: (1) its catch of fish taken on board such ves- sel on the high seas, (2) fish products processed from its catch of fish taken on board such vessel on the high seas, or (3) fish or fish products taken on board such vessel (the landing vessel) on the high seas from a vessel engaged in fishing operations or in the processing of fish or fish products. In the operation un- der consideration, a foreign-flag fish processing vessel would receive whole fish from catching vessels on the high seas and, after processing on board the processing vessel, transship the product of that processing (fish oil) to another vessel for transportation abroad. In such an operation, the processing ves- sel is clearly not: (1) landing its catch of fish taken on board the processing vessel on the high seas, or (2) landing fish prod- ucts processed from its catch of fish taken on board the process- ing vessel on the high seas. Nor, you contend, is it landing "fish ... taken on board such vessel on the high seas ..." or "fish products taken on board such vessel on the high seas ...." Instead, you state, the processing vessel is transshipping the products of whole fish taken on board the vessel on the high seas.

After thoroughly reviewing the history of 46 U.S.C. App. 251(a), we have concluded that the interpretation of section 251(a) you suggest is incorrect. Section 4311, Revised Statutes, which was the statute amended by the Nicholson Act in 1950 (Chapter 842, 64 Stat. 577), reserved the privileges of vessels employed in the American fisheries to properly documented vessels built in the United States and owned by United States citizens (see sections 4132 and 4312, Revised Statutes). Before enactment of the Nicholson Act, it was the understanding of Congress that this statute and section 4.96(a), Customs Regulations of 1943, "prohibit the landing of fish by foreign fishing vessels coming directly to United States ports from the fishery banks (Report No. 2364, August 15, 1960, of the Senate Committee on Interstate and Foreign Commerce). The Nicholson Act was intended to strengthen the laws protecting the domestic fishing industry (House Report No. 2934, August 16, 1950, set forth at 1950 U.S.C.C.A.N. 3539). Specifically, it was intended to "make impossible the employment" of the "device" under which "foreign fishing vessels without rights under international agreements are able, after making their catches, to obtain documentation as car- go vessels in their home or other foreign ports and, as such car- go vessels, may proceed to American ports and market their fish" (House Report No. 2934, supra).

Under the interpretation of 46 U.S.C. App. 251(a) you suggest, a foreign-flag vessel could avoid the prohibitions of section 251(a) by processing whole fish received on the high seas. Clearly, this is antithetical to the purpose of the Nicholson Act and would result in a more egregious weakening of the protection intended under the fisheries laws than the device the employment of which the Nicholson Act was intended to make impossible. Consistent with the intent of the Nicholson Act, we interpret section 251(a) to prohibit the landing in the United States by a foreign-flag vessel of fish products (including fish oil) that vessel has processed from whole fish it received on the high seas. This follows our past rulings on this issue (see, e.g., our ruling to you dated July 20, 1983, file number 106191, copy enclosed for your convenience).

We are, as you request, assuming that the joint venture you describe complies with all requirements of law other than 46 U.S.C. App. 251(a). However, we note, as you may already be aware, that the laws relating to the United States documentation of vessels for the fisheries have recently been amended (see Pub- lic Law 100-239). Under this amendment, "fisheries" is defined in 46 U.S.C. 12101 to include, in addition to the activities formerly listed in 46 U.S.C. 12101(6), the processing, storing, and transporting (except in foreign commerce) of fish and other listed marine life in the navigable waters of the United States or the exclusive economic zone.

HOLDING:

1. The transshipment anywhere in United States territorial waters of fish products from a foreign-flag vessel to another vessel for transportation abroad is a "landing in a port of the United States," as that phrase is used in 46 U.S.C. App. 251(a).

2. The landing by a foreign-flag vessel in a port of the United States of fish products processed on that vessel from fish it received whole from catching vessels on the high seas is prohibited by 46 U.S.C. App. 251(a).

Sincerely,

Edward T. Rosse

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