HQ 0111286 - U.S.-built barge sold foreign to be used as dredge in U.S. waters - United States International Trade Commision Rulings

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HQ 111286

May 21, 1991

VES-10-02-CO:R:IT:C 111286 KVS

CATEGORY: CARRIER

Mr. Robert J. Taylor
Taylor Associates
23827 2nd Ave. West
Bothell, WA 98021

RE: U.S.-built barge sold foreign to be used as dredge in U.S. waters

Dear Mr. Taylor:

This is in response to your letter dated September 6, 1990, which requests a ruling regarding the use of a U.S.-built barge, which has been sold foreign, in dredging operations located within the territorial waters of the United States.

FACTS:

You state that your client is contemplating the purchase of an unmanned barge. The vessel, named the ARL-10, was built in 1944 at Baltimore, Maryland for the U.S. Navy. The vessel was built as a repair ship, using an LST design. In 1966, the vessel was purchased by the Canadian Pacific Railway and converted to a rail-trailer ferry. In 1985, the vessel was decommissioned and sold. Since that time, the vessel has been registered as a barge, presumably under Canadian registery.

Your client wishes to purchase the barge, convert it to a deck barge, register the vessel in the United States, and use it in a sand dredging operation in San Francisco Bay.

ISSUE:

Whether a U.S.-built barge, which has been sold foreign, may be used in dredging operations located within the territorial waters of the United States.

LAW AND ANALYSIS:

Section 1 of the Act of May 28, 1906 (36 Stat. 204; 46 U.S.C. 292), provides that "a foreign-built dredge shall not, under penalty of forfeiture, engage in dredging in the United

States unless documented as a vessel of the United States. The Customs Service has ruled that dredging, for purposes of 46 U.S.C. 292, means the use of a vessel equipped with excavating machinery in digging up or otherwise removing sub-marine material.

It is the position of the Customs Service that because the prohibition in 46 U.S.C. 292 relates to build, and not the documentation of a dredge, a dredge documented under a foreign flag may engage in dredging in the United States if it was built in the United States (C.S.D. 85-11; see also, Customs Letter Ruling 110063 KMF (dated April 12, 1989)).

However, title 46, United States Code, section 883, in pertinent part, prohibits the transportation of merchandise 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. Points in the United States embraced within the coastwise laws include points in the territorial sea (defined as the belt, three nautical miles wide, seaward of the territorial sea baseline), and points located in internal waters (those waters landward of the territorial sea baseline, in cases where the baseline and the coastline differ.)

Section 883 was recently amended by the Act of June 7, 1988 (Public Law 100-329; 102 Stat. 588) to expand the definition of coastwise trade to include activities that had previously not been considered coastwise trade. Under the new provision, the section 883 prohibition against the transportation of merchandise:

...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...

Therefore, the use of a United States-built, foreign-flag dredge to engage solely in the act of dredging would not be considered coastwise trade for purposes of 46 U.S.C. provided that the dredge is not used to transport the dredged material, or any other merchandise, between coastwise points.

Accordingly, if the ARL-10 will be used solely for dredging, it need not alter its registry. If, however, the ARL- 10 will be used to transport sand from a fixed point in San

Francisco Bay to the shoreline, its documentation must permit the barge to be used in coastwise trade. Questions regarding vessel documentation should be addressed to:

Mr. Thomas Willis
Chief, Vessel Documentation
U.S. Coast Guard (GMVI-6/13)
2100 Second Street
Room 1312
Washington, D.C. 20593-0001

HOLDING:

A United States-built dredge documented under a foreign flag may engage in dredging operations in the United States provided that it does not transport the dredged material between coastwise points.

Sincerely,

B. James Fritz

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