HQ 0111445 - Coastwise trade; Foreign-built derrick barges; Construction cranes; 46 U.S.C. App. 883 - United States International Trade Commision Rulings

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HQ 111445

March 11, 1991

VES-3-CO:R:IT:C 111445 LLB

CATEGORY: CARRIER

Mr. J. Kelly Duncan
Jones, Walker, Waechter, Poitevent,
Carrere and Denegre
201 St. Charles Avenue
New Orleans, Louisiana 70170-5100

RE: Coastwise trade; Foreign-built derrick barges; Construction cranes; 46 U.S.C. App. 883

Dear Mr. Duncan:

Reference is made to your letter of December 12, 1990, in which you request that we issue a ruling on the proposed use by your client of two foreign-built, foreign-flag, derrick barges in the Gulf of Mexico. You ask that we accord your request confidential treatment, as the release of information concerning this proposal might prove detrimental to your client's competitive position. We accede to your request regarding confidentiality.

FACTS:

It is proposed that two foreign-built and documented derrick barges would be employed in operations in the Gulf of Mexico. The vessels, both self-propelled, would be used in the lifting and setting of jackets and decks related to the construction of offshore oil and gas platforms. It is stated that the barges would remain stationary when performing their lifting and setting operations, and that the transfer of materials would be accomplished wholly by operation of the vessels' cranes except for incidental movement.

ISSUE:

Whether the coastwise laws are violated when non-coastwise- qualified stationary vessels are used in construction operations in the Gulf of Mexico.

LAW AND ANALYSIS:

Title 46, United States Code App., section 883 (46 U.S.C. App. 883) in pertinent part, prohibits the transportation of merchandise 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 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.

Under Section 4(a) of the Outer Continental Shelf Lands Act of 1953, as amended (43 U.S.C. 1333(a) (OCSLA)), 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. The provisions for dutiability of merchandise, as well as the coastwise and other navigation laws, apply to production platforms. C.S.D. 83-52.

Customs has held that the use of a non-coastwise-qualified crane vessel to load and unload cargo is not coastwise trade and does not violate 46 U.S.C. App. 883, provided, that any movement of merchandise is effected exclusively by the operation of the crane and not by movement of the vessel, except for necessary movement which is incidental to a lifting operation while it is taking place. However, movement of merchandise while it is aboard the vessel or suspended from the crane, even between two points within a harbor, which is neither necessary nor incidental to a lifting operation by the crane would constitute coastwise transportation of merchandise within the purview of 46 U.S.C. App. 883. In the present matter it is stated that the barges will remain stationary during actual lifting and setting operations. In light of these facts, we find that the proposed operation is permissible under 46 U.S.C. App. 883.

HOLDING:

Following a full review of the facts and analysis of the law and applicable precedents, we have determined that the use of two non-coastwise-qualified crane barges as detailed in this case is permissible under 46 U.S.C. App. 883.

Sincerely,

B. James Fritz

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