HQ 0110956 - Use of a Dutch-registered stationary platform used for construction operations. - United States International Trade Commision Rulings

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HQ 110956

June 7, 1990

VES-3-15 CO:R:P:C 110956 JBW

CATEGORY: CARRIER

Mr. Scott C. Hege
Marketing Manager
Interbeton, Inc.
The Atrium Building, Suite 203
263 Mclaw's Circle
Williamsburg, VA 23185

RE: Use of a Dutch-registered stationary platform used for construction operations.

Dear Mr. Hege:

This letter is in response to your request, dated March 30, 1990, for a ruling on the application of the coastwise laws to the use of a non-coastwise-qualified stationary platform for construction operations.

FACTS:

Interbeton, Inc., is a United States subsidiary of a Dutch construction company, Hollandsche Beton Group of the Netherlands (HBG). Interbeton wishes to import marine equipment for use on a construction project located approximately eight to nine miles off the coast of Massachusetts. Specifically, Interbeton will import its Jack-Up Barge IB 908 ("IB 908"). The IB 908 is equipped with pile driving, drilling, and lifting equipment and will be used as a stationary platform for drilling for and installation of effluent outfall risers. The IB 908 was manufactured in the Netherlands, is registered under the Dutch flag, and is owned by Holland Equipment Company of the Netherlands (HEC), which in turn is owned by HBG. You state that the IB 908 will not be used for transportation of merchandise. You further state that only coastwise-qualified tug boats will be used to set the IB 908 in place and that coastwise-qualified vessels will be used to transport merchandise to the platform.

ISSUE:

Whether the coastwise laws prohibit the use of a non- coastwise-qualified stationary platform for construction operations in territorial waters or in waters beyond the three mile territorial limits.

LAW AND ANALYSIS:

The coastwise laws of the United States prohibit the transportation of merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built and documented under the laws of the United States and owned by persons who are citizens of the United States. (46 U.S.C. App. 883 (1982), referred to as "the Jones Act"). Generally, the coastwise laws include points within the territorial waters of the United States, which consist of the territorial sea, defined as the belt, three nautical miles wide, adjacent to coast of the United States and seaward of the territorial sea baseline.

The Customs Service has consistently held that a non- coastwise-qualified vessel used as a moored facility within territorial waters does not engage in the coastwise trade and consequently does not violate the coastwise laws, or any other law administered by the Customs Service, provided that the vessel remains stationary. E.g., C.S.D. 89-107, 23 Cust. B. & Dec., No. 44, 8, 9 (1989). Thus, the use within territorial waters of a foreign owned and registered stationary jackup barge for construction operations, as described in your letter, does not violate the coastwise laws.

Pursuant to Section 4(a) of the Outer Continental Shelf Lands Act of 1953 (OCSLA), as amended, 43 U.S.C. 1333(a) (1982), the Customs Service has ruled that the coastwise laws are extended to mobile oil drilling rigs during the period they are secured to or submerged onto the seabed of the Untied States outer continental shelf. T.D. 54281(1), 92 Treas. Dec. 8 (1957); see also, C.S.D. 89-115, 23 Cust. B. & Dec., No. 45, 7, 13-14 (1989). The Customs Service has applied this principle to drilling platforms, artificial islands, and similar structures, as well as devices attached to the seabed of the outer continental shelf for the purpose of resource exploration operations, including warehouse vessels anchored over the outer continental shelf when used to supply drilling rigs on the outer continental shelf. Id. However, the OCSLA does not extend jurisdiction to activities wholly unrelated to the exploration, development, or production of natural resources on the seabed of the outer continental shelf. 106 Mile Transport Associates v. Koch, 656 F. Supp. 1474, 1482 (S.D.N.Y. 1987). Therefore, if your proposed construction activities will take place beyond territorial waters, then they would not fall within the jurisdictional ambit of the OCSLA. The use of a stationary platform for construction activities on the outer continental shelf consequently would not be subject to the coastwise laws.

We note that although the vessel under consideration will not be engaging in the coastwise trade while in operation as a stationary construction facility either within or beyond the territorial waters, the vessel itself will become a coastwise point if within territorial waters. C.S.D. 89-107. Therefore, any vessel moving merchandise or passengers between the stationary platform and another coastwise point must be documented for the coastwise trade. 46 U.S.C. App. 289 & 883 (1982). Furthermore, United States law requires that a coastwise-qualified vessel tow the vessel under consideration between coastwise points. 46 U.S.C.A. App. 316(a) (West Supp. 1990).

HOLDING:

The coastwise laws do not prohibit the use of a non- coastwise-qualified stationary platform used for construction operations within or beyond the territorial waters of the United States. If within territorial waters, the vessel itself becomes a coastwise point. Only coastwise-qualified vessels may transport merchandise and passengers between the platform and another coastwise point. Likewise, coastwise-qualified vessels must be used to tow the vessel between coastwise points.

The coastwise laws do not apply to the use of a non- coastwise-qualified stationary platform used for construction activities beyond the territorial waters of the United States.

Sincerely,

B. James Fritz
Chief

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