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HQ 111031

June 13, 1990

VES-3-17-CO:R:P:C 111031 LLB

CATEGORY: CARRIER

Mr. Stephen H. Hutchings
Birch, Horton, Bittner, Cherot and Anderson 1127 West Seventh Avenue
Anchorage, Alaska 99301

RE: Use of a non-coastwise-qualified vessel on the Yukon River, Alaska

Dear Mr. Hutchings:

Reference is made to your letters of May 10 and 17, 1990, in which you request a ruling on the applicability of the coastwise merchandise statute, commonly known as the Jones Act, to the proposed operation of a fish processing vessel on the Yukon River, Alaska.

FACTS:

It is proposed that a foreign-built, United States-flag fish processing vessel would travel between points on the Yukon River, Alaska, to accept and process fish from other vessels. The processing vessel would thereafter unlade the processed fish to another vessel on the Yukon River, or possibly to a vessel located within the territorial waters of the United States other than on the Yukon River. It is stated that the processing vessel is "...otherwise authorized to engage in the fishery..."

ISSUE:

1. Whether the fourth proviso to 46 U.S.C. App. 883 allows non-coastwise-qualified vessels to transport merchandise between points on the Yukon River, Alaska.

2. Whether any laws of the United States would prohibit the processing and transportation of fish from point to point on the Yukon River, Alaska, or from a point on that river to another point within the territorial and waters of the United States.

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 ....

In what is commonly known as the fourth proviso, it is stated that section 883:

... shall not become effective upon the Yukon River until the Alaska Railroad shall be completed and the Secretary of Commerce shall find that proper facilities will be furnished for transportation by persons citizens of the United States for properly handling the traffic:

Pursuant to section 12108 of title 46, United States Code (46 U.S.C. 12108), considered in concert with section 1824 of title 16, United States Code (16 U.S.C. 1824), the only vessels which may engage in the fisheries in the United States are United States-flag vessels with a fisheries endorsement, and foreign- flag vessels holding a permit issued by the National Marine Fisheries Service of the Department of Commerce. This is a relevant concern because section 12101 of title 46, United States Code (46 U.S.C. 12101), as amended by the Act of January 11, 1988 (Pub. L. 100-239, 101 Stat. 1778), defines fisheries as follows:

'fisheries' includes processing, storing, transporting (except in foreign commerce), planting, cultivating, catching, taking, or harvesting fish ... in the navigable waters of the United States or in the exclusive economic zone.

The proposed use of the vessel as outlined in the request for a ruling brings it within the scope of both the cited coastwise and documentation statutes. While the vessel is not prohibited under section 883 from carrying cargo on the Yukon River by virtue of the fourth proviso (the railroad having been completed but requisite finding under the statute never having been made), the fact remains that the vessel would be engaging in processing and transporting fish within the meaning of the vessel documentation laws. We do not know what is meant by the phrase employed in your letter that vessel is "otherwise authorized" to engage in fisheries activities, but merely note that given the information made available to us, the vessel could not at this time qualify for a fisheries endorsement on its document as required for lawful engagement in the fisheries trade.

The Anti-Reflagging Act of 1988, the law which amended the fisheries and documentation laws to exclude foreign-built, U.S.- flag vessels from engaging in the fisheries, did contain a savings clause which, in short, allowed vessels operating as fish processors before July 28, 1987, to be licensed for the fisheries. Perhaps this is what you mean in indicating that the vessel is "otherwise authorized."

HOLDING:

1. Under the fourth proviso to section 883, United States Code Appendix (46 U.S.C. App. 883), merchandise may be transported point to point on the Yukon River, Alaska, by a non- coastwise qualified vessel until such time as the requisite findings specified in the statute are made.

2. A vessel neither properly documented for the fisheries nor holding a valid permit issued by the National Marine Fisheries Service, may not process and transport fish between points on the Yukon River, Alaska, or between a point on that river and another point within the territorial waters of the United States. However, vessels operating as fish processors prior to July 28, 1987, may be licensed for that trade by virtue of Pub. L. 100-239.

Sincerely,

B. James Fritz

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