HQ 0110783 - Applicability of the coastwise laws to the transportation of tension leg platform components - United States International Trade Commision Rulings

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HQ 110783
February 14, 1990

VES-3-15 CO:R:P:C 110783

CATEGORY: CARRIER

Mr. John J. Bennett
Cahill, Gordon and Reindel
1990 K Street, N.W.
Washington, D.C. 20006

RE: Applicability of the coastwise laws to the transportation of tension leg platform components

Dear Mr. Bennett:

Reference is made to your letter of January 17, 1990, in which you request application of the findings contained in Customs Service Decision 89-115 (C.S.D. 89-115) and ruling letter 110421 of September 1, 1989, to certain operations proposed by your client.

FACTS:

In C.S.D. 89-115, Customs considered the applicability of the coastwise laws to the fabrication, transportation, and installation of a tension leg platform (TLP) on the United States outer continental shelf (OCS). That ruling, issued to Shell Offshore, Inc., contained numerous elements and findings which we numbered. It is proposed to bid on this same Shell Offshore, Inc., project upon which we have ruled, and we are requested to rule whether numbered holdings 15 and 16 are applicable to the present matter.

Your client, McDermott, Inc., proposes to use the foreign- built launch barge INTERMAC 650 to transport, in separate movements, the hull and deck of the TLP (as described in C.S.D. 89-115) from coastwise points on the U.S. Gulf Coast. These components would be transported to an offshore launch site where they would be "mated." The hull weighs approximately 22,300 long tons, and the deck some 21,300 long tons. The mated TLP would then be moved to a site on the OCS which, it is stated, is a coastwise point by virtue of section 4(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1333(a)). The INTERMAC 650 is among those U.S.-flag launch barges listed in an inventory of such vessels published in the Federal Register of June 27, 1988 (53 FR 24165).
ISSUE:

Does the transportation of TLP components from coastwise points to an offshore launch site by the launch barge INTERMAC 650, and the subsequent movement of the "mated" components to an operational site on the OCS violate 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 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 * * *.

Section 883 was amended by the Act of June 7, 1988 (Public Law 100-329; 102 Stat. 588). Among other things, Public Law 100- 329 added the so-called launch barge amendment. Under this provision,

* * * The transportation of any platform jacket in or on a launch barge between two points in the United States, at one of which there is an installation or other device within the meaning of [43 U.S.C. 1333(a)], shall not be deemed transportation subject to this section if the launch barge has a launch capacity of 12,000 long tons or more, was built as of June 7, 1988, and is documented under the laws of the United States, and the platform jacket cannot be transported on and launched from a launch barge of lesser launch capacity that is identified by the Secretary of Transpor- tation and is available for such transportation.

A list of U.S.-flag launch barges published by the Maritime Administration under Public Law 100-329 is found in the June 27, 1988, issue of the Federal Register (53 FR 24165), with the INTERTMAC 650 being included.

Section 4(a) of the Outer Continental Shelf Lands Act of 1953, as amended (67 Stat. 462; 43 U.S.C. 1333(a)) (OCSLA), provides, in pertinent part, that the laws of the United States are extended to:

* * * the subsoil and seabed of the outer Continental Shelf and to all artificial islands, and all installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing or producing resources therefrom * * * to the same extent as if the outer Continental Shelf were an area of exclusive Federal jurisdiction located within a State."

Under this provision, Customs has ruled that the coastwise laws and other Customs and navigation laws are extended to mobile oil drilling rigs during the period they are secured to or submerged onto the seabed of the United States OCS. The same principles have been applied to drilling platforms, artificial islands, and similar structures attached to the seabed of the OCS for the purpose of resource exploration operations, including warehouse vessels anchored over the OCS when used to supply drilling rigs on the OCS.

By C.S.D. 89-115, holdings 15 and 16, the transportation of the separate hull and deck components of a TLP on a foreign-built launch barge from coastwise points to offshore launch points was permitted, so long as the barge used had a launch capacity of 12,000 long tons or more, was built as of June 7, 1988, and was documented under U.S. law.

These holding have not since been modified or revoked, only further explained by issuance of ruling letter 110421 of September 1, 1989. We find the circumstances presently under consideration to be similar in nature and consider holdings 15 and 16 in C.S.D. 89-115 to be applicable.

HOLDING:

The launch barge INTERMAC 650 may be used to transport hull and deck components for a tension leg platform, in separate movements, each component weighing in excess of 12,000 long tons, from points on the U.S. Gulf Coast to an offshore launch site. The "mated" TLP may then be moved to a coastwise point on the OCS without violating 46 U.S.C. App. 883, under authority of C.S.D. 89-115.

Sincerely,

B. James Fritz
Chief

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