HQ 0110386 - Use of non-coastwise qualified vessels in certain oil recovery/clean-up operations - United States International Trade Commision Rulings

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HQ 110386

September 29, 1989

VES-3-CO:R:P:C 110386

CATEGORY: CARRIER

John F. Meadows, Esq.
Meadows, Smith, Lenker, Sterling & Davis
425 California Street
San Francisco, California 94194-2294

RE: Use of non-coastwise qualified vessels in certain oil recovery/clean-up operations

Dear Mr. Meadows:

This is in response to your letter of July 18, 1989, in which you seek a ruling regarding the use of a small fleet of "yard oiler" vessels for certain clean-up and/or support operations in the event of oil spills in coastal waters.

FACTS:

An American operator currently owns a U.S.-flag "yard oiler" vessel, a small shallow draft vessel which, it is perceived, would be perfectly suited for oil spill clean-up operations. This type of vessel is self-propelled and can heat its own cargo tanks with steam, or can pump steam ashore for cleaning oil from beaches, docks, etc. The purchase of three additional vessels of this type is being considered, all three currently located and documented in Mexico.

Four possible uses for the vessels are specified, these being:

1. Generating steam for pumping ashore to clean beaches, rocks and other areas fouled by oil;

2. Acting as storage in place for oil-contaminated water recovered by skimmers and other recovery vessels, then pumping off the contaminated water into barges coming alongside;

3. In addition to acting as a storage vessel, using oil separation equipment installed aboard, such as centrifuges, to purify the water and pump it off into the harbor, then pumping the recovered oil into barges for disposition elsewhere;
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4. Acting as a recovery vessel herself, as by steaming through the spill and pumping aboard the contaminated water for later discharge into barges or collection tanks ashore.

ISSUE:

Whether non-coastwise qualified vessels may engage in any or all of the above-enumerated operations without consequence under the coastwise laws.

LAW AND ANALYSIS:

Section 27 of the Act of June 5, 1920, as amended (41 Stat. 999; 46 U.S.C. App. 883, often called the Jones Act), provides in pertinent part, that:

No merchandise shall be transported by water, or by land and water, on penalty of forfeiture of the merchandise (or a monetary amount up to the value thereof as determined by the Secretary of the Treasury, or the actual cost of the transportation, whichever is greater, to be recovered from any consignor, seller, owner, importer, consignee, agent, or other person so transporting or causing said merchandise to 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 other vessel 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...

Section 883 was recently amended by the Act of June 7, 1988 (Public Law 100-329: 102 Stat). Among other things, Public Law 100-329 added the so-called valueless materials amendment. Under this provision, the section 883 restriction:

...applies to the transportation of valueless material or any dredged material regardless of whether it has commercial value, from a point or place in the United States or a point or place on the high seas within the Exclusive Economic Zone... to another point or place in the United States or a point or place on the high seas within that Exclusive Economic Zone...
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By engaging in any of the first three of the previously listed operations, the yard oiler vessels would not be providing any part of a transportation of materials between coastwise points. Customs has long held that the use of a non-coastwise qualified vessel as a stationary facility, whether for lodging, processing, storage, etc., is not a "transportation" activity which would be prohibited under section 883. Further, if such a vessel is being loaded or unloaded and must be moved to another location temporarily due to stress of weather or other reason involving the safety of the vessel, the coastwise laws are not violated so long as no loading or unloading occurs at any other coastwise point and the vessel is subsequently returned to its original location once the danger has passed. Any other vessels involved in actual transport must, of course, be coastwise qualified.

The operation outlined in the fourth proposed use would, however, constitute a prohibited activity under section 883. As a non-qualified vessel, it would not be possible for the vessel to legally act as a mobil recovery and transport vessel at any point within the jurisdiction of section 883.

HOLDING:

Non-coastwise-qualified vessels may act as stationary generating, storage, or processing facilities without consequences under section 883. Such vessels may not, however, act as mobil oil spill recovery and/or transport vessels under the statute.

Sincerely,

B. James Fritz

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