HQ 0110979 - Oil Tanker Escort Service; Emergency Towing; Oil Spills; 46 U.S.C. App. 316(a); 46 U.S.C. 883 - United States International Trade Commision Rulings

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HQ 110979
July 11, 1990

VES-10-03-CO:R:P:C 110979 LLB

CATEGORY: CARRIER

Mr. Fred M. G. Sullivan
President, IMC Corporation
501-2001 Beach Avenue
Vancouver, British Columbia, Canada V6G-173

RE: Oil Tanker Escort Service; Emergency Towing; Oil Spills; 46 U.S.C. App. 316(a); 46 U.S.C. 883

Dear Mr. Sullivan:

Reference is made to your letters of April 3 and June 5, 1990, in which you request a ruling on the proposed use of a foreign-flag vessel to provide oil tanker escort and related services from points originating in Canadian waters and terminating at United States refinery sites in Washington State, as well as for the return trip commencing off-shore from the refinery sites and returning to Canadian waters.

FACTS:

The correspondence under consideration proposes the use of two named foreign-flag vessels, the PANDORA and the ATLANTIC. However, in a telephone call of July 6, 1990, to Customs Headquarters, it was indicated that the PANDORA is no longer being considered for the service specified in this ruling and that the ATLANTIC alone is now the subject of this ruling request.

The vessel ATLANTIC is a deep sea salvage tug boat under foreign documentation. It is proposed to utilize the vessel to provide oil tanker escort and 24-hour emergency response services to include oil spill containment and recovery, fire- fighting, jet helicopter and remote control rescue services for aiding over-board survivors in rough seas, and emergency towing should a tanker experience loss of motive power. It is stated that the vessel would not engage in the transportation of any merchandise.

ISSUE:

Whether the provision of oil tanker escort and related towing, rescue, and oil spill containment/recovery services is proscribed by any statute or regulation administered by the Customs Service.

LAW AND ANALYSIS:

Section 4370 of the Revised Statutes, as amended (R.S. 4370; 46 U.S.C. App. 316(a), the coastwise towing statute), prohibits the towing of any vessel, other than a vessel in distress, by a vessel not documented under the United States flag to engage in the coastwise or Great Lakes trade between ports or places in the United States embraced within the coastwise laws, either directly or by way of a foreign port or place, or for any part of such towing, or such towing between points in a harbor of the United States. The penalties for violation of this prohibition are a fine of from $250 to $1,000 against the owner and master of the towing vessel and a further penalty against the towing vessel of $50 per ton of the towed vessel.

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 mer- chandise (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 great- er, 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 transporta- tion, in any other vessel than a vessel built in and documented under the laws of the Untied States and owned by persons who are citizens of the United States...

Section 883 was recently amended by the Act of June 7, 1988 (Public Law 100-329: 102 Stat). Among other things, Public Law 100-329 added the so-called valueless materials amendment. Under this provision, the section 883 restriction:

...applies to the transportation of valueless material or any dredged material regardless of whether it has commercial value, from a point or place in the United States or a point or place on the high seas within the Exclusive Economic Zone...to another point or place in the United States or a point or place on the high seas within that Exclusive Economic Zone...

In applying the above-cited statutory provisions to the operations intended in this case, we find that the towing of vessels in U.S. waters when they are disabled due to engine failure is considered an aid to a distressed vessel. The statute (section 316(a)) permits the towing by a foreign-flag vessel in U.S. waters of a vessel in distress. Further, since it does not appear from the information provided that it is intended to take any materials aboard at a U.S. point and to unlade them at another U.S. point, there would not be any coastwise merchandise transportation concerns under section 883, at least not in the conventional sense. This finding is qualified because we do not know exactly what is contemplated in regard to any proposed oil spill clean up operations. If it is anticipated that the vessel would be utilized to either skim to or receive recovered oil in U.S. waters and unlade that oil at another U.S. point, such a use would be considered coastwise trade. Such would be the case even if it were determined that the recovered oil was contaminated such that it no longer had commercial value, this by virtue of the 1988 "valueless material" amendment to section 883 discussed previously. As concerns the escort, rescue, and firefighting elements of the proposed service, there are no statutes or regulations administered by Customs which would proscribe such activities.

All of these findings are predicated upon there being no contact between the vessel ATLANTIC and any "escorted" tankers except in the advent of an emergency situation.

HOLDING:

As specified in the law and analysis section of this ruling, the vessel ATLANTIC may engage in proposed oil tanker escort services, with the possible exception of oil spill clean up operations. If such operations entail the skimming or receipt of recovered oil by the vessel in U.S. waters, any deposit of such oil at another U.S. point would constitute a violation of 46 U.S.C. App. 883.

Sincerely,

B. James Fritz

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