HQ 0111878 - Application of the dredge statute (46 U.S.C. App. 292) to dredging in American Samoa. - United States International Trade Commision Rulings

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HQ 111878

September 4, 1991

VES 7-03 CO:R:IT:C 111878 BEW

CATEGORY: CARRIER

Mr. Chris Costain
MK Ferguson
MK Ferguson Plaza
1500 West 3rd Street
Cleveland, Ohio

RE: Application of the dredge statute (46 U.S.C. App. 292) to dredging in American Samoa.

Dear Mr. Costain:

This is in reference to your facsimile transmission dated August 26, 1991, in which you inquiry as to what effect the "Federal Dredge Statute" (46 U.S.C. App. 292) has on a proposed dredge project located in American Samoa.

FACTS:

You state that McConnell Dowell of New Zealand is currently bidding on a dredging contract in which it is proposed to dredge in Loeation, a man-made shipping harbor entrance and turning basin which has silted up over the past twenty (20) years. The proposed site is located in American Samoa. You state that McConnell Dowell intends to build a small pontoon on site and mount a standard excavator on the pontoon for excavating the seabed material, which will be placed on a barge and towed ashore. You state that the material will be removed from the barge and trucked to the client's designated disposal site. You ask what effect the dredging statute (46 U.S.C. App. 292) has on this project.

ISSUES:

1. Whether the dredging statute is applicable to dredge operations performed in American Samoa.

2. Whether the coastwise laws are applicable to commerce between the islands of American Samoa and other ports of the United States?

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." The Customs Service has ruled that dredging, for purposes of 46 U.S.C. App. 292, means the use of a vessel equipped with excavating machinery in digging up or otherwise removing submarine material. We have long held that dredging in United States territorial waters is dredging in the United States, for purposes of this statute (see C.S.D. 83-106).

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 a foreign-built dredge (except those dredges named in section 2 of the Act of May 28, 1906; may not engage in dredging in the United States whether or not documented as a vessel 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 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 ....

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.

Title 48, United States Code, section 1664 (48 U.S.C. 1664) provides:

The provisions of law of the United States restricting to vessels of the United States the transportation of passengers and merchandise directly or indirectly from any port of the United States to another port of the United States shall not be applicable to commerce beween1 the islands of American Samoa or between those islands and other ports under the jurisdiction of the United States.

(1 So in original. Probably should be between).

We have ruled that the act of dredging is not a coastwise law (rulings letter 101693 R, 103693 MKT, 104642 PH; see also Great Lakes Dredge & Dock Co. v. Ludwig, et. al., Civ-78-185, U.S. Dist. Ct., W. Dist., N.Y. March 26, 1980). However, the transportation of merchandise or passengers from or to the dredge, or by the dredge, would be deemed coastwise trade if the transportation were between ports or places in the United States.

HOLDING:

1. Since the exemption stated in 48 U.S.C. 1664 does not apply. The use of a foreign-built dredge to engage in dredging in the harbors of American Samoa is prohibited under 46 U.S.C. App. 292.

2. By virtue of the exception stated in 48 U.S.C. 1664, the coastwise laws are inapplicable to the transportation of the merchandise (dredged material) or passengers directly or indirectly between any port of the United States and the islands of American Samoa or between the islands or within the harbors of American Samoa.

Sincerely,

B. James Fritz

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