HQ 0110391 - Applicability of the salvage law (46 U.S.C. App. 316(d)) to the use of a United States-flag, non-coastwise-qualified jackup barge for salvage in Puerto Rican waters. - United States International Trade Commision Rulings

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HQ 110391

May 03, 1990

VES-10-01 CO:R:P:C 110391 BEW

CATEGORY: CARRIER

Mr. Richard B. Fairbanks
Titan Maritime Industries Inc.
3305 Southeast 14th Avenue
Fort Lauderdale, Florida 33316

RE: Applicability of the salvage law (46 U.S.C. App. 316(d)) to the use of a United States-flag, non-coastwise-qualified jackup barge for salvage in Puerto Rican waters.

Dear Mr. Fairbanks:

This is in response to your request for clarification of our ruling HQ 110319 PH in which we ruled that a United States-flag, non-coastwise-qualified jackup barge may be used for salvage operations in the territorial waters of Puerto Rico because the coastwise salvage statute (46 U.S.C. App. 316(d)) is not applicable in Puerto Rican waters, and the prohibition in that provision applies only to "foreign vessels."

FACTS:

The facts presented in your original request indicate that you would be using a jackup barge to remove the wreck of the passenger ferry A. REGINA, which your company owns, from a reef 400 meters off the southeast coast of Mona Island, Puerto Rico. The principle piece of salvage equipment is a 10 legged jackup barge which you state is documented under the United States flag but is not coastwise-qualified.

You are now asking whether the jack-up barge can be used as a work platform to lay pipe or clean-up a harbor.

ISSUE:

May a United States-flag, non-coastwise-qualified jackup barge be used as a work platform to lay pipe or clean-up a harbor in the territorial waters of Puerto Rico?

LAW AND ANALYSIS:

Generally, the coastwise laws (e.g., 46 U.S.C. App. 289 and 883, and 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.

Under the provisions of 46 U.S.C. App. 289, no foreign vessel shall transport passengers between ports or places in the United States, either directly or by way of a foreign port. The penalty for violating this section of the law is $200 for each passenger so transported and landed.

Pursuant to 46 U.S.C. 12106 and 12110 and their predecessors (46 U.S.C. 65i and 65m and, before them, 46 U.S.C. 11) and consistent with 46 U.S.C. App. 883, the coastwise merchandise law, the Customs Service has consistently held that the prohibition in 46 U.S.C. App. 289, applies to all non- coastwise-qualified vessels. Non-coastwise-qualified vessels include any vessel other than a vessel built in, properly documented under the laws of, owned by citizens of the United States, and never sold foreign with certain exceptions (46 U.S.C. 12106(a)(2)(B) a 19 CFR 4.80(a)(2) and (3)).

In interpreting the coastwise laws as applied to the transportation of passengers, we have ruled that the carriage of passengers entirely within territorial waters, even though they disembark at their point of embarkation and the vessel touches no other point, is considered coastwise trade subject to the coastwise laws.

A point in United States territorial waters is considered a point in the United States embraced within the coastwise laws but a point beyond those waters, even if it is within the United States Exclusive Economic Zone (EEZ), is not considered to be such a point, with certain exceptions inapplicable in this context (see, e.g., the Outer Continental Shelf Lands Act of 1958, as amended; 43 U.S.C. 1333, and the amendments to 46 U.S.C. App. 883 regarding the transportation of valueless or dredged material effected by Public Law 100-329).

Paragraph (d) of the Act of June 11, 1940, as amended (46 U.S.C. App. 316(d)), provides, in pertinent part, that:

No foreign vessel shall, under penalty of forfeiture, engage in salvaging operations on the Atlantic or Pacific coast of the United States, in any portion of the Great Lakes or their connecting or tributary waters, including any portion of the Saint Lawrence River through which the international boundary line extends, or in territorial waters of the United States on the Gulf of Mexico, except when authorized by a treaty or in accordance with the provisions of [46 U.S.C. App. 725] ....

It has long been the position of the Customs Service that although the coastwise laws pertaining to the transportation of merchandise and passengers and to towing are applicable to Puerto Rico (see 48 U.S.C. 744 and 46 U.S.C. App. 877), the coastwise salvage statute is not applicable to the waters of Puerto Rico (see rulings dated June 10, 1974, and March 8, 1985 (File Numbers 100949 and 107038). Further, we note that although these other coastwise laws prohibit the use of any vessel other than a United States built, owned, and documented vessel in the transportation of merchandise and passengers or in towing, the prohibition in the salvage statute is applicable only to a "foreign vessel."

Accordingly, the salvage statute would not prohibit the use of the United States-flag non-coastwise-qualified jackup barge under consideration for the described salvaging operations in the waters of Puerto Rico. However, as required by the coastwise merchandise and passenger laws referred to above, any transportation of merchandise or passengers to and from the jackup barges would be by coastwise-qualified vessels. With regard to possible temporary movement of the jackup barge, the coastwise laws would not prohibit such a movement if, as you state, no merchandise or passengers are removed from the jackup barge until it is returned to the same position at which the merchandise or passengers were loaded onto or boarded the vessel (see 19 CFR 4.80(a) and Shipbuilders Council of America v. United States, 868 F.2d 452 (D.C. Cir. 1989)). Any towing of the jackup barge between coastwise points would, of course, be required to be by a coastwise-qualified vessel.

With respect to the barge being used for pipe laying, the Customs Service has held that the sole use of a vessel in laying pipe is not considered a use in the coastwise trade of the United States, even when the pipe is laid between two points in the United States embraced within the coastwise laws. Further, since the use of a vessel in pipe-laying is not a use in the coastwise trade, a non-coastwise-qualified vessel may carry pipe which it is to lay between such points. It is the fact that the pipe is not landed as cargo but only paid out in the course of the laying operation which makes such operation permissible.

The movement of the barge, with its crew, equipment and stores, from one point embraced within the coastwise laws of the United States to another such point would not be considered coastwise trade provided the barge does not take on board passengers or merchandise at one such point and discharge the passengers or merchandise at another such point. Crewmembers, including technicians necessary to assist in the vessel's pipelaying operation, are not considered passengers under section 289, nor are the construction company personnel and employees of the various subcontractors who are on the barge in connection with its business. However, persons transported on the barge between points embraced within the coastwise laws who are not connected with the operation, navigation, ownership, or business of the barge are subject to section 289. Legitimate equipment and stores of the barge for its use, including pipe laden on board to be paid out in the course of operations, are not considered merchandise covered by section 883. However, articles transported on the barge between points embraced within the coastwise laws which are not legitimate stores and equipment of the barge are subject to section 883.

With respect to the barge being used as a stationary work platform to clean up the harbor, there is no law administered by Customs that would prohibit such an operation.

HOLDING:

A United States-flag, non-coastwise-qualified jackup barge may be used for salvage operations in the territorial waters of Puerto Rico because the coastwise salvage statute (46 U.S.C. App. 316(d)) is not applicable in Puerto Rican waters and the prohibition in that provision applies only to "foreign vessels."

The use of a United States-flag, non-coastwise-qualified jackup barge for pipelaying in the territorial waters of the U.S. would not constitute coastwise trade and is in no way prohibited by the laws and regulations administered by the Customs Service.

A United States-flag, non-coastwise-qualified jackup barge may be used as a stationary work platform to clean up a harbor without violating Customs and navigation laws.

Sincerely,

B. James Fritz
Chief

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