HQ 0110864 - Coastwise transportation of goods from British Columbia, Canada to the Yukon Territory in Canada via Seattle, Washington, to Skagway, Alaska on a coastwise-qualified vessel. - United States International Trade Commision Rulings

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HQ 110864

August 16, 1990

VES-3-VES-10-03 CO:R:P:C 110864 BEW

CATEGORY: CARRIER

Mr. J. C. Thomas
Ladner Downs
2100 Pacific Centre South
P.O Box 10021
700 West Georgia Street
Vancouver, Canada VTY1AS

RE: Coastwise transportation of goods from British Columbia, Canada to the Yukon Territory in Canada via Seattle, Washington, to Skagway, Alaska on a coastwise-qualified vessel.

Dear Mr. Thomas:

This is in reference to your letter in which you requested a ruling on the application of the coastwise laws to a proposed transportation of merchandise from Kamloops, British Columbia, to the Yukon Territory.

FACTS:

You state MOLY-COP produces over 60,000 metric tonnes per year for sale primarily in Canada, and that MOLY-COP has been negotiating the sale of medium to a mining operation situation in the Yukon Territory. You state that the most advantageous way to ship the medium to the Yukon is to ship it by rail or truck in bond from Kamloops to Seattle, where it would be loaded on a fully qualified U.S. bottomed vessel which is owned and operated by Alaska Marine Line. Alaska Marine Line would transport the goods to Skagway, Alaska, where it would be offloaded on to trucks for transportation to its ultimate destination. You ask whether the shipment of goods in such a manner is a violation of the coastwise laws.

ISSUE:

Whether the transportation on a coastwise-qualified vessel of in-bond goods being shipped from British Columbia to the Yukon via Seattle, Washington, to Skagway, Alaska, is considered coastwise trade and subject to the coastwise laws.

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.

The coastwise law pertaining to the transportation of merchandise, 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 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 or persons 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 ....

For purposes of the coastwise laws, a point in United States territorial waters is considered a point embraced within the coastwise laws. 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.

"Merchandise," as used in section 883, includes any article, including valueless merchandise pursuant to the recent amendment of section 883 by the Act of June 7, 1988 (Public Law 100-329; 102 Stat. 588).

The coastwise laws's prohibitions are against the use of foreign-flag or non-coastwise-qualified U.S. vessels. The transportation of the goods from port to port or point to point within the territorial waters of the United States is permitted on vessels which are documented for the coastwise trade. The transportation of the subject goods from Seattle, Washington, to the Skagway, Alaska, would be considered coastwise transportation and coastwise-qualified vessels must be used for such transportation.

HOLDING:

Transportation of goods from British Columbia, Canada, to the Yukon Territory using a coastwise-qualified vessel for the leg from Seattle to Alaska would not be prohibited under the provisions of the coastwise laws, specifically 46 U.S.C. App. 883.

Sincerely,

B. James Fritz

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