HQ 0111446 - Coastwise trade; Foreign-built derrick barges; Construction cranes; Pipelaying; 46 U.S.C. App. 883 - United States International Trade Commision Rulings

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HQ 111446

March 11, 1991

VES-3-CO:R:IT:C 111446 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; Pipelaying; 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 a foreign-built, United States-flag, derrick barge 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 a foreign-built, United States- documented derrick barge would be employed in operations in the Gulf of Mexico. The non-self-propelled vessel 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 barge would remain stationary when performing this lifting and setting operation, and that the transfer of materials would be accomplished wholly by operation of the vessel's crane except for incidental movement.

It is also proposed that the vessel in question would be used in pipelaying operations in the Gulf of Mexico. It is stated that the vessel might need to load and transfer pipe to be paid-out in the course of pipelaying operations, and that crewmembers and technicians necessary to assist in those operations would be aboard at the time the subject procedures are under way.

ISSUE:

Whether the coastwise laws are violated when a non- coastwise-qualified stationary vessel is used in construction operations in the Gulf of Mexico, or when such a vessel, while under way, assists in pipelaying operations in that body of water.

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 barge will remain stationary during actual lifting and setting operations. In light of these facts, we find that the proposed lifting and setting operation is permissible under 46 U.S.C. App. 883.

With regard to the pipelaying portion of the proposed operation, it is not clear from the facts as presented exactly what role is contemplated for the vessel in question. It is not discernable from the proposal whether the vessel in question would be used to take piping materials aboard at a coastwise point and transfer those materials to a pipelaying vessel at another such point; whether materials would be taken from a coastwise point to a point in the Gulf of Mexico which is not an operating site on the outer Continental Shelf and there transfer them; whether the materials will be taken from a coastwise point and actually paid-out from that vessel in the course of pipelaying operations. The legality depends upon the character of the intended operation. Only in circumstances where vessel is used to transport materials either from or to a non-coastwise point, or is actually laying the piping materials in question will the proposed usage be permissible under the coastwise laws.

With regard to the transportation of the non-self-propelled vessel itself, you should be aware that pursuant to 46 U.S.C. App. 316(a), only a vessel properly documented under the laws of the United States with an endorsement for the coastwise trade may be employed to tow the vessel if such tow is to be between two coastwise points.

HOLDING:

Following a full review of the facts and analysis of the law and applicable precedents, we have determined that the use of a non-coastwise-qualified crane barge as detailed in this case is permissible under 46 U.S.C. App. 883, with the exception that such vessel may not be used to lade materials at one coastwise point and unlade them at another, regardless of whether those points may be located within territorial waters or on the outer Continental Shelf.

Sincerely,

B. James Fritz

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