HQ 0111684 - Use of foreign-flag fixed crane barge within U.S. waters - United States International Trade Commision Rulings

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HQ 111684

June 26, 1991

VES-3-19-CO:R:IT:C 111684 KVS

CATEGORY: CARRIER

Mr. Laney Choest
Edison Choest Offshore
North American Shipbuilding
P.O. Box 309
Galliano, LA 70354

RE: Use of foreign-flag fixed crane barge within U.S. waters

Dear Mr. Choest:

This is in response to your recent request for a ruling regarding the use of a foreign-flag fixed crane barge within U.S. waters. Our findings are set forth below.

FACTS:

Your letter states that North American Shipbuilding, a facility of Edison Choest Offshore, wishes to utilize a foreign- flag fixed crane barge (the Smit Taklift 6) together with three American-flag barge cranes to launch the NATHANIEL B. PALMER ("vessel"), a newly-constructed vessel.

We are informed that the NATHANIEL B. PALMER currently rests upside down on a foundation located 12 feet from the water's edge. The four cranes will be positioned in a straight line alongside the vessel, with the foreign-flag barge placed at the far left end. The four lift barges, attached to the hull of the NATHANIEL B. PALMER by slings connected to the pad-eyes welded to the side of the vessel.

The barges will lift the hull of the NATHANIEL B. PALMER approximately three feet above its current foundation and pivot outward in unison, bringing the vessel perpendicular to the shoreline before lowering it into the water. We are informed that, during this operation, the propulsion systems on the foreign-flag crane barge will be secured and not in use, and that all propulsion necessary for movement will be supplied by U.S. harbor tugs.

After the vessel is lowered into the water, the slings will be lowered until approximately 10-12 feet of slack remains in the lift line. One side of the slings will be removed and the hull
lifted on the remaining slings of the other side in a manner that will "flip" the hull so that the vessel will be righted in the water. After the hull is "flipped," the crane barge slings will be removed and the foreign-flag crane barge will no longer be used. U.S. harbor tugs will then position the NATHANIEL B. PALMER parallel to the shoreline.

ISSUE:

Whether a 90 degree rotation of a non-coastwise-qualified fixed crane barge upon an axis by U.S.-flag harbor tugs constitutes a coastwise transportation in violation of 46 U.S.C. App. 883.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, section 883 (46 U.S.C. App. 883), often called the Jones Act, provides, in part, that no merchandise shall 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 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.

Title 19, United States Code, section 1401(c) defines the term "merchandise" as "goods, wares, and chattels of every description, and includes merchandise the importation of which is prohibited." Moreover, under a recent amendment to 46 U.S.C. App. 883, the term merchandise encompasses even "valueless material."

In interpreting section 883, Customs has ruled that a 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 4.80b(a), Customs Regulations (19 CFR 4.80b(a) provides, in part, that:

A coastwise transportation of merchandise takes place, within the meaning of the coastwise laws, when merchandise laden at a point embraced within the coastwise laws
("coastwise point") is unladen at another coastwise point, regardless of the origin or ultimate destination of the of the merchandise.

Turning to the proposed usage, we understand that the foreign-flag fixed crane barge will be used as one of four crane barges to lift the NATHANIEL B. PALMER from her present position, swing the vessel out and over a foundation, and deposit the vessel in the intercoastal waterway.

Therefore, if this proposed activity constitutes a lading of merchandise at one coastwise point and a discharge at another, with the foreign-flag barge providing the necessary transportation between those points, the coastwise prohibition of 46 U.S.C. App. would prohibit the use of the foreign-flag barge in assisting the movement of the hull.

However, in this case the barge, which holds the fourth crane in line, will utilize no propulsion equipment. Although the barge will not remain completely still, the only movement proposed is the swinging of the bow by U.S.-flag harbor tugs so as to rotate the barge approximately 90 degrees upon an axis. At no time will the barge be used to advance the NATHANIEL B. PALMER in its progress through the water, but will merely rotate approximately 90 degrees upon an axis.

It follows, then, that at least part of the non-coastwise- qualified barge will be over the precise spot, after the use of the crane, as it was before it swung on its axis. We do not consider such a movement to be a point to point transportation of the NATHANIEL B. PALMER by the barge since, as a practical matter, its only movement is of a swinging nature and the entire vessel does not move from one coastwise point to another coastwise point.

HOLDING:

The 90 degree rotation of a non-coastwise-qualified fixed crane barge upon an axis by U.S.-flag harbor tugs does not constitute a coastwise transportation in violation of 46 U.S.C. App. 883.

Sincerely,

B. James Fritz

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