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HQ 111833


November 26, 1991

VES-10-02-CO:R:P:C 111833 BJF

CATEGORY: CARRIER

Stuart S. Dye, Esquire
Graham and James
Attorneys at Law
2000 M Street, N.W.
Washington, D.C. 20036

RE: The applicability of the coastwise laws to the proposed use of a foreign-built drill barge in a dredging project and the movement of dredge materials in the territorial waters of the U.S.

Dear Mr. Dye:

This is in reference to your letter of August 5, 1991, in which you requested a ruling concerning the use of a foreign- built drill barge in a dredging project within the United States territorial waters.

FACTS:

You state that the proposed activity forming the basis for this ruling request is the contemplated charter and operation by your client of a foreign-built drill barge within the territorial waters of the U.S. as part of a dredging project. The foreign drilling/blasting barge contemplated for use in the proposed activity would employ hydraulic drilling equipment of foreign origin. The equipment would use compressed air to drive numerous holes into the seabed approximately two (2) inches in diameter, 10 to 100 feet apart, and 10 to 100 feet deep. After the barge's crew completes the drilling that is required to place dynamite for the purpose of dislodging the sea bottom, the crew proceeds to do so by placing and detonating the charges.

As to the remaining aspects of the dredging operation, you state that your client intends to employ a U.S. coastwise- qualified vessel that will accompany the foreign drilling/ blasting barge, storing and carrying the dynamite and related materials used in the blasting operation. You state that at each drilling site, the dynamite necessary for the daily drilling activities will be transferred from this U.S. coastwise-qualified storage vessel to the foreign drilling/blasting barge, unlading onto the foreign drilling/blasting barge only that amount of dynamite required for a particular blasting operation at a given site. Other U.S.-built, U.S. flagged vessels will subsequently transport the material removed from its original site.

Counsel cites prior administrative rulings as precedent for the proposition that drilling and pile driving are not "dredging". Those precedents are not decisive in cases of first impression involving novel and unaddressed circumstances. Which is what we address in this ruling.

We are uninformed as to whether the other vessels' owner- ship history, or other factual particulars concerning the vessels, support their use in the coastwise trade.

We are also uninformed as to the means by which the barge's crew is transported between coastwise points.

ISSUES:

1. Is a vessel that removes, by blasting, the sea bottom from one point to another, engaged in " dredging" for the purposes of title 46 U.S.C App. 292?

2. Is the use of a U.S.-built and flagged vessel permitted to transport merchandise and passengers between coastwise points?

LAW AND ANALYSIS:

Section 1 of the Act of May 24, 1906 (34 Stat. 204; 46 U.S.C. App. 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."

In our interpretation of 46 U.S.C. App. 292, we and our predecessor in the administration of the navigation laws, the Bureau of Marine Navigation, have consistently held that, under 46 U.S.C. App. 292, a foreign-built dredge (except those dredges named in section 2 of the Act of May 28, 1906; see below) may not engage in dredging in the United States whether or not documented as a vessel of the United States. This is so because of the historical background and legislative history of the Act of May 28, 1906. The provision was enacted as a result of controversy which arose over the use of foreign-built dredges to repair damage done by a hurricane at Galveston, Texas, in 1900. At the time of the enactment of the provision, foreign-built vessels could not be documented in the United States, unless captured in war by citizens of the United States and lawfully condemned as prize or adjudged to be forfeited for a breach of the laws of the United States (section 4132, Revised Statutes). Thus, at the time of enactment, the proviso in section 1 of the Act of May 28, 1906, "unless documented as a vessel of the United States," was by itself, practically meaningless. However, section 2 of the Act of May 28, 1906, provided:

That the Commissioner of Navigation is hereby authorized to document as vessels of the United States the foreign-built dredges Holm, Leviathan, Nereus, and Triton, owned by American citizens and now under con- struction abroad for use at Galveston, on which an American citizen, the contractor at Galveston, has an option.

Reading both sections together, it is clear that the proviso in section 1, "unless documented as a vessel of the United States," refers to the dredges which were authorized and directed to be documented as vessels of the United States by section 2. The legislative history of the Act confirms this interpretation (see Cong. Rec. 7029 (1906)) and, stated above, the Act has consistently been so interpreted by the agencies responsible for its administration. Even though a foreign-built dredge may now be documented as a vessel of the United States (see 46 U.S.C. 12102, 12105), it would be prohibited by 46 U.S.C. App. 292 from engaging in dredging in the United States.

It is clear from the foregoing that section 292 is a restrictive statute and, if interpretation is required, that interpretation should reflect the legislative purpose of the statute.

We believe that the present case is clearly distinguishable from those cited by counsel; the latter cases involved vessels whose mission was limited to work preparatory to the dislodging and displacement of the sea bottom. In the case before us, the vessel drills as a secondary, ancillary activity to its primary purpose, which is dislodging and removal, as part of a dredging operation, of the sea bottom from one site to another. This first displacement of the dredged material (for discussion of "dredged" please see discussion immediately below.) is perhaps followed by a further transportation to a second site.

At the above point in time (prior to any further movement of the material) the issue is not one of "transportation" but one of "dredging." While section 292 does not define dredging, Customs has in the past cited a definition relied upon by the court in Gar-Con Development, Inc. v. State of Florida, Department of Environmental Regulation, found at 468 So. 2nd 414. That definition is as follows:

Dredging" is the "excavation" by any means, in waters of the state....

...The word "excavate" is derived from the latin word meaning to hollow out. Its common, plain and ordinary meaning is to make a cavity or hole in, to dig out, hollow out, to remove soil by digging, scooping out or other means. The common plain and ordinary meaning of the word "dredging" is the removal of soil from the bottom waters by suction or scooping or other means.

Giving the word "excavate" its common, plain and ordinary meaning, the use of a foreign drilling/blasting barge for the proposed blasting operation would be dredging in that the operation would involve removing soil from one place on the seabed to another.

The Customs Service has ruled that dredging, for purposes of 46 U.S.C. App. 292, includes the use of a vessel equipped with excavating machinery in digging up or otherwise removing submarine material. Thus we have held that a foreign-built tug which was used to tow a metal plow along the floor of the sea to create a furrow in which to lay pipe would be engaging in dredging and prohibited under section 292 (see rulings 103692 MKT and 108222 PH).

Given the foregoing, we hold that the proposed activity constitutes dredging so as to come within the prohibition of 46 U.S.C. App. 292.

As to the second point, i.e., whether a U.S.-built and flagged vessel may transport passengers and crew between coastwise points, counsel's ruling request evidences his familiarity with the basic issues. However, we cannot comment on whether all the vessels in question may engage in those activities because we do not know whether they are coastwise qualified, as opposed to merely built and flagged in the United States. Section 177.2(a)(iv) of the Customs Regulations (19 CFR 177.2(a)(iv) provides that where a transaction involves a vessel, the request for a ruling should include information relating to a place of build and nationality of registration and, if to be used in waters under the jurisdiction of the United States, the exact place or places of intended use, if known. Further submissions relating to this ruling or future ruling requests must comply with the requirements set forth in section 177.2(a)(iv) before we will issue a ruling.

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 transportation, 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 ....

"Merchandise" is defined in section 1401(c) of title 19, United States Code, to include goods, wares, and chattels of every description, and includes fish, fish products, and fish packaging materials that are assembled into packages containing fish. Section 883 specifically provides that, for purposes of its provisions, "merchandise" includes valueless material (Pub.L. 100-329; 102 Stat. 588). The transportation of valueless material, whether or not it has commercial value, from a point or place in the United States or point or place on the high seas within the Exclusive Economic Zone (EEZ) as defined in the Presidential Proclamation of March 10, 1983, to another point or place in the United States or a point or place on the high seas within that EEZ would also be prohibited under the provisions of section 883. Dynamite is considered merchandise for the purpose of section 883.

The transportation of dynamite which has been laden onto a foreign blasting/drill barge from a coastwise-qualified-vessel, to points embraced within the coastwise laws, where it would be unladen, would be prohibited under the provisions of 46 U.S.C. App. 883.

The transportation of the dredged material on a non- coastwise-qualified vessel from a point or place in the United States or a point or place on the high seas within the Exclusive Economic Zone (EEZ) as defined in the Presidential Proclamation of March 10, 1983, to another point of place in the United States or a point or place on the high seas within the EEZ would be prohibited under the provisions of 46 U.S.C. App. 883.

Title 46, United States Code Appendix, section 289 (46 U.S.C. App. 289, the passenger coastwise statute), prohibits the transportation of passengers between points embraced within the coastwise laws of the United States, either directly or by way of a foreign port, in a non-coastwise-qualified vessel. Pursuant to section 4.50(b), Customs Regulations (19 CFR 4.50(b)) a "passenger" for purposes of section 289 is defined as "any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership or business."

HOLDINGS:

1. The use of a foreign drilling/blasting barge to participate in a dredging operation by blasting and dislodging the sea bottom from its original sea bottom position to another such position, is an engagement in dredging and therefore is a violation of 46 U.S.C. App. 292.

2. The transportation of the dynamite from the shore to the foreign/blasting drill barge on a coastwise-qualified vessel is not a violation of 46 U.S.C. App. 883.

The transportation of dynamite which has been laden onto a foreign blasting/drill barge from a coastwise- qualified-vessel, to points embraced within the coastwise laws, where it would be unladen, would be prohibited under the provisions of 46 U.S.C. App. 883.

Sincerely,

Stuart P. Seidel
Director, International

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