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HQ 111355

January 16, 1991
VES-3-CO:R:IT:C 111355 LLB

CATEGORY: CARRIER

Mr. George J. Mannina, Jr.
O'Connor and Hannan
1919 Pennsylvania Avenue, N.W.
Washington, D.C. 20006-3483

RE: Anti-pollution vessels; oil spill recovery; prototype vessel; 46 U.S.C. App. 883; 46 U.S.C. 12101

Dear Mr. Mannina:

This is in response to your letter of October 16, 1990, in which you request a ruling on the coastwise trade implications, if any, in the use of two newly-constructed foreign vessels to demonstrate various anti-pollution activities in various ports of the United States.

FACTS:

It is proposed that Ecomarine, Inc., a U.S. company, bring into the U.S. two newly-constructed vessels for the purpose of demonstrating their capabilities in marine pollution control. The vessels, one 36 feet in length and the other 65 feet in length, are capable of removing spilled oil, removing surface solids, removing seaweed and algae, oxygenating water, and monitoring for pollutants in the water column.

The ruling request solicits the opinion of Customs as to whether, for Jones Act purposes, it makes any difference whether:

1. Ecomarine transports observers from and to shore aboard the demonstration vessel.

2. The demonstration vessel brings demonstration floatables from shore, dumps and then removes them, and then returns the demonstration floatables to shore.

3. The demonstration vessel cleans up floatables already found in the harbor and either returns them to shore for disposal or returns them to the water.

4. The demonstration vessels are moved between port demonstration areas via truck or air freight or over water under their own power. If the vessels move over water under their own power, they would not transport cargo or passengers. The vessels would each be operated by a two-man crew.

ISSUE:

Whether any of the enumerated proposed activities listed in the FACTS portion of this ruling may be prohibited by law.

LAW AND ANALYSIS:

Generally, the coastwise laws (e.g., 46 U.S.C. App. 289 and 883, and 46 U.S.C. 12106 and 12110) prohibit the transportation of merchandise or passengers 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.

The coastwise law pertaining to the transportation of merchandise, 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 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 trans- portation, 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...

The coastwise laws generally apply to points in the territorial sea, defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in the internal waters, landward of the territorial sea baseline, in cases where the baseline and the coastline differ. These laws have also been interpreted to apply to transportation between points within a single harbor.

"Merchandise", as used in section 883, includes any article, including even materials of no value (see the amendment to section 883 by the Act of June 7, 1988, Pub. L. 100-329; 102 Stat. 588). Pursuant to section 4.50, Customs Regulations (19 CFR 4.50), a "passenger" for purposes of the coastwise laws is defined as "any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business."

The Commercial Fishing Industry Vessel Anti-Reflagging Act of 1987 (Pub. L. 100-239; 101 Stat. 1778) changed the definition of "fisheries" by amending the law to include in the definition, transporting of marine vegetation in the navigable waters of the United States. Title 46, United States Code, section 12108(b) limits the employment in the fisheries to a vessel issued a certificate of documentation with a fisheries endorsement. Only a vessel eligible for documentation (i.e., over 5 net tons and owned by a citizen) which was built in the United States may be so endorsed. With regard to vessels under 5 net tons, Customs has long held that such vessels, if owned by United States citizens or by resident aliens, may engage in the fisheries even if foreign built (see T.D. 56382 (6)).

Customs has previously ruled that the use of a vessel solely for the purpose of demonstration in which persons who are transported on demonstration rides embark and disembark at the same point is not a use in the coastwise trade even if the ride is entirely within territorial waters. Such persons are not considered to be passengers for the purposes of the coastwise laws. However, these rulings have been limited to demonstration rides originating and terminating at the same point because the transportation of persons between different points is itself evidence of a purpose other than the demonstration of a vessel. This, of course, would not apply to the two-man crew assigned to each of the two vessels.

The transportation aboard each vessel of equipment necessary to the operation of the transporting vessel would likewise pose no problem. Such essential equipment is not considered merchandise under the coastwise laws.

In regard to the removal of surface solids (floatables), a distinction must be made between the demonstration floatables which are transported on the vessels from the starting point to the demonstration site and back again, and those floatables which are found at the demonstration site. If the latter floatables are retrieved from the water and transported to another location (whether ashore or otherwise), even in the vicinity of their retrieval, a coastwise violation will have occurred.

Although not specifically listed in the proposed activities, we will address the question of removal of seaweed and algae since those services are listed among the capabilities of the vessels in question. As previously stated, the transportation of marine vegetation is considered to be an activity for which a fisheries endorsement would be necessary. If they are over 5 net tons, the vessels in question could not be properly documented by virtue of their foreign construction. If they are 5 net tons or less, they could be so employed if owned by citizens of the United States or by resident aliens.

HOLDING:

Following a thorough review of the facts and analysis of the law and applicable precedents, we find that the vessels in question may engage in demonstration activities in the United States to the following extent:

1. Persons may be transported from a shore site to a demonstration point and back to the original shore point to be disembarked, even if the entire operation occurs within territorial waters.

2. Demonstration floatables, not placed aboard the vessels at any coastwise point, may be dumped and retrieved by the vessels at demonstration points.

3. True floating debris may not be retrieved by the vessels, even during demonstrations, and transported to any other point for discharge, no matter how minimal the transportation.

4. The use of the vessels to harvest and/or transport seaweed or algae is an engagement in the fisheries, a service in which the vessels may not participate unless of 5 net tons or less and owned by United States citizens or resident aliens.

Sincerely,

B. James Fritz

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