HQ 0110442 - 46 U.S.C. 292; Dredge; Smalley 6808 Dredge; U.S.-built; Navigable Waters - United States International Trade Commision Rulings

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HQ 110442

March 4, 1991

VES-10-02:CO:R:PC 110442 RAH

CATEGORY: CARRIER

Glenn L. Blackwell, Esquire
ROSENTHAL AND GANISTER
Matlack Building - Suite D
113 East Evans Street
West Chester, PA 19380

RE: 46 U.S.C. 292; Dredge; Smalley 6808 Dredge; U.S.-built; Navigable Waters

Dear Mr. Blackwell:

In May 1989, we received a letter regarding the possible violation of 46 U.S.C. App. 292 of a Smalley excavator dredge by the City of Punta Gorda, Florida, to dredge spoil from the dock area of canals within the city's jurisdiction. In July 1990, you requested additional time to submit information and comments before we issued a decision in this case. On November 16, 1990, representatives of our office met with you to discuss this case and to view a videotape of the excavator. At that time, you again requested additional time to submit further legal authority. We have not received any additional information from you or your client, and thus we are writing to report on the results of our investigation of the Smalley 6808 Dredge operated by the of City Punta Gorda.

The dredge in question was manufactured in the United Kingdom by Smalley Excavators Ltd., of Bourne Links, England, and was imported by the U.S. distributor, Smalley Excavators of Wallingford, Connecticut.

The Smalley Excavator was imported from England and shipped by vessel to Montreal, Canada, unassembled. The merchandise entered the U.S. on October 27, 1987, as parts for machinery (shovels, scrapers, excavators) on entry #02821422 through Champlain, New York, and was trucked directly to the Johnstone Company in North Haven, Connecticut. The Johnstone Company fabricated the barge, assembled the excavator, and placed it on the barge, producing an amphibious dredge.

The dredge was ordered by the City of Punta Gorda on October 9, 1987, from Smalley Excavators. It was delivered on December 16, 1987, to the City of Punta Gorda by truck from the U.S. distributor, Smalley Excavators of Wallingford, Connecticut.

The Smalley 6808 Amphibious Dredge is registered with the State of Florida as a Florida vessel; it is not documented. It was assigned hull identification number FLZJ 5329B888 and issued Florida State registration number FL 1855FF on January 27, 1988. The City of Punta Gorda, Florida, was issued a permit on June 7, 1983, by the State of Florida, Department of Environmental Regulation, to perform dredging of material for the maintenance of existing dock sites in an existing residential canal system. The permit has been updated several times, to include the same extended maintenance project but appears to have expired on June 14, 1988.

The dredge was being operated within canals inside of the territorial sea baseline. A location map attached to the permit clearly outlined the work area, well within the internal waters (artificial navigable waterbodies) of the City of Punta Gorda, Florida. The Peace River feeds these canals and runs directly into Charlotte Harbor, which empties into the Gulf of Mexico.

The dredge is basically a backhoe placed on a barge which removes spoil from in front of a dock and then places the spoils near the center of the canal. The mechanical dredger is moved from the job site on a flatbed trailer and when required, is pushed long in the water by a small pontoon boat. The dredge measures approximately 20 feet long by 8 feet wide by 3 feet deep and weighs 6 tons.

Title 46, United States Code App., section 292, provides in its entirety: "A foreign-built dredge shall not, under penalty of forfeiture, engage in dredging in the United States unless documented as a vessel of the United States."

For purposes of 46 U.S.C. App. 292, dredging in the United States includes dredging in United States territorial waters, generally defined as the belt, 3 nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline, and certain dredging on the United States outer Continental Shelf outside territorial waters (see C.S.D. 85-11).

Several arguments have been asserted why the Smalley dredge would not fall within the statute. In a letter of May 17, 1990, Mr. Bigwood, Vice President, Smalley Excavators, Inc., asserts that the dredge is not subject to 292 because it is technically not a dredger but remains an excavator. He states that the 6808 consists primarily of a Smalley excavator mounted on a pontoon having 3 stabilizer legs. The legs have wheels in the form of drums which are used for moving the machine on land and when the machine is operating on land. The stabilizers are further used to raise the pontoon off the water to prevent it from floating
when the excavator is in operation. The 6808 cannot operate as an excavator if it is floating as it would immediately capsize.

While the dredging statute (46 U.S.C. App. 292) does not define dredging, other sources offer helpful guidelines. One court stated that:

Dredging is defined as "excavation" by any means ... The word "excavate" is derived from the latin word meaning to hollow-out. Its common, plain and ordinary meaning is to make a cavity or hole in, to dig out, hollow out, to remove soil by digging, scooping out or other means. The common plain and ordinary meaning of the word "dredging" is the removal of soil from the bottom of waters by suction or scooping or other means. Gar- Con Development v. State, 468 So.2d 413 (Fla. App. 1 Dist. 1985).

The International Maritime Dictionary defines a dredge as:

A vessel or floating structure equipped with excavating machinery, employed in deepening channels and harbors, and removing submarine obstructions such as shoals and bars.
De Kerchove, International Maritime
Dictionary, Second Edition (1961), p. 241.

The Customs Service has ruled that dredging, for purposes of 46 U.S.C. App. 292, means the use of a vessel equipped with excavating machinery in digging up or otherwise removing submarine material. See 109692, 108222, 107052. A vessel is defined as including "... every description of water craft or other contrivance used, or capable of being used, as means of transportation in water ..." (19 U.S.C. 1401(a); see also, 1 U.S.C. 3 and 46 U.S.C. 2101(45). Generally, dredges have been held to be vessels. We have held that an amphibious dredge is considered a "vessel" and, therefore, subject to the coastwise laws and 46 U.S.C. App. 292. See Customs Ruling letter 107052 PH (11-7-84). Furthermore, we have held that a foreign-built grab- dredge crane which can operate on land or water when installed on a floating pontoon, would be prohibited from engaging in dredging in the United States, if used with a vessel (i.e., when installed on a floating pontoon.). If used from on land and not in connection with a vessel, it would not be prohibited from engaging in dredging in the United States. See, 107052 PH (11-7- 84).

We have found that the most efficient way for us to determine whether a dredging vessel is built in the United States, for purposes of 46 U.S.C. App. 292, is to defer to the

Coast Guard on the question. If a dredging vessel is considered by the Coast Guard to be built in the United States for purposes of documentation and particularly, the coastwise laws, we will consider it to be a U.S.-built dredge for purposes of section 292. Headquarters Decision 107908. In that regard, we requested the advice of the Coast Guard and they responded by letter of May 18, 1990. That letter provides in part that "Mr. Bigwood concedes that the entire superstructure of the dredge is of foreign origin. He raises a question, however, as to whether the Smalley 6808 is a vessel. Review of his submission leads to the inescapable conclusion that the dredge is a vessel and that it is foreign built."

The Customs Service and its predecessor in the administration of the navigation laws, the Bureau of Marine Navigation, have consistently held that, under 46 U.S.C. App. 292, a foreign-built dredge (except those dredges named in section 2 of the Act of May 28, 1906; see below) may not engage in dredging in the United States whether or not documented as a vessel of the United States. This is so because of the historical background and the legislative history of Act of May 28, 1906. The provision was enacted as a result of controversy which arose over the use of foreign-built dredges to repair damage done by a hurricane at Galveston, Texas, in 1900. At the time of enactment of the provision, foreign-built vessels could not be documented in the United States, unless captured in war by citizens of the United States and lawfully condemned as prize or adjudged to be forfeited for a breach of the laws of the United States (section 4132, Revised Statutes). Thus, at the time of enactment, the proviso in section 1 of the Act of May 28, 1906, "unless documented as a vessel of the United States," was, by itself, practically meaningless. However, section 2 of the Act of May 28, 1906, provided:

That the Commissioner of Navigation is hereby authorized and directed to document as vessels of the United States the foreign- built dredges Holm, Leviathan, Nereus, and Triton, owned by American citizens and now employed at Galveston, and the dredge Sea Lion, now under construction abroad for use at Galveston, on which an American citizen, the contractor at Galveston, has an option.

Thus, reading both sections together, it is clear that the proviso in section 1, "unless documented as a vessel of the United States," refers to the dredges which were authorized and directed to be documented as vessels of the United States by section 2. The legislative history of the Act confirms this interpretation (see 40 Cong. Rec. 7029 (1906))) and, as stated above, the Act has consistently been so interpreted by the
administrative agencies responsible for its administration. Even though a foreign-built dredge may now be documented as a vessel of the United States (see 46 U.S.C. 12102, 12105), it would be prohibited by 46 U.S.C. 292 from engaging in dredging in the United States. See also 110859 GEV (4-12-90). It is the position of the Customs Service that because the prohibition in 46 U.S.C. 292 relates to build, and not the documentation of a dredge, a dredge documented under a foreign flag may engage in dredging in the United States if it was built in the United States. Thus, your argument that the "excavator" is not within the provision of 292 must fail.

Finally, you should be aware that the dredging statute (46 U.S.C. App. 292) as well as the other navigation laws administered by the Customs Service, is applicable only to those vessels engaged in activities in the navigable waters of the United States, and the navigable waters of its territories and possessions. The U.S. Coast Guard determines whether a particular body of water is deemed to be navigable waters of the United States in order to ascertain its jurisdiction to enforce the laws it administers. The U.S. Customs Service, in ascertaining its own jurisdiction to enforce the navigation laws it administers, is strongly disposed to follow determinations of the U.S. Coast Guard and other agencies in the absence of Federal judicial decisions or explicit Congressional enactment, although it is not required to do so. The test of navigability has been established by the federal courts through the years. This test consists of 4 essential elements which, when taken together, state that a navigable waterway of the United States must (1) be or have been (2) used or susceptible of use (3) in the customary modes of trade and travel on water (4) as a highway for interstate commerce. The Daniel Ball, 10 Wall, 557, 563, 77 U.S. 557, 563, 19 L.Ed. 999 (1871); The Montello, 20 Wall. 430, 441, 87 U.S. 430, 441, 22 L.Ed. 391 (1874); United States v. Utah, 283 U.S. 64, 76, 51 S.Ct. 438, 441, 75 L.Ed. 84 (1931); United v. Appalachian Electric Power Co., 311 U.S. 377, 406-408, 61 S.Ct. 291, 298-99, 85 L.Ed. 243 (1940).

The 4 elements listed above are reflected in the regulations of the U.S. Coast Guard (33 CFR 2.05-25(a)(3)(i)) which state, in pertinent part, that navigable waters of the United States include:

Internal waters of the United States not subject to tidal influence that: (i) are or have been used or are or have been susceptible for use, by themselves or in connection with other waters, as highways for substan- tial interstate or foreign commerce notwithstanding natural or man-made obstructions that require portage.

These same 4 elements are also reflected in the regulations of the Army Corps of Engineers (33 CFR 329,4) which define
navigable waters of the United States in pertinent part as:
those waters that are subject to the ebb and flow of the tide and/or are presently used, or have been used in the past, or may be susceptible for use to transport interstate or foreign commerce.

As stated above, Customs has no similar regulations pertaining to the statutes it enforces, preferring to look to court decisions and the regulations of these two federal agencies instead.

Other than legislation enacted by Congress to explicitly exempt a particular vessel from the application of the navigation laws, the only other waiver authority is that contained in the act of December 27, 1950 (64 Stat. 1120), under which the navigation laws may be waived by the Secretary of the Treasury in the interest of national defense. This Act, among other things, directs the granting of a waiver upon the request of the Secretary of the Defense and permits such a waiver on the written recommendation of the head of any other United States Government agency. Such a waiver is inapplicable in your case.

In conclusion, we find that the Smalley excavator/dredge is a foreign-built dredge which is prohibited from engaging in dredging in the United States pursuant to 46 U.S.C. App. 292. If you have any questions regarding our decision, you may contact Rebecca Hollaway of my staff at (202) 566-5706.

Sincerely,

B. James Fritz

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