HQ 0111927 - Coastwise; Pipelaying; Transport Barge; 46 U.S.C. App. 883; 19 C.F.R. 4.80b(a). - United States International Trade Commision Rulings

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HQ 111927

May 6, 1992

VES-3-16 CO:R:IT:C 111927 JBW

CATEGORY: CARRIER

Thomas A. Lorenzen
Paul, Hastings, Janofsky & Walker
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036

RE: Coastwise; Pipelaying; Transport Barge; 46 U.S.C. App. 883; 19 C.F.R. 4.80b(a).

Dear Mr. Lorenzen:

This letter is in response to your request that we rule on the application of the coastwise laws to the use of a foreign registered barge for the transportation of pipe from the shore to a pipelaying vessel.

FACTS:

By letter of August 12, 1991, the Carrier Rulings Branch issued a ruling letter in which we determined that, subject to certain limitations, the foreign-flagged vessel the LORELAY may be used to transport and to lay pipe in connection with the Exxon Santa Ynez Unit Expansion Project. We again ruled, by letter dated September 24, 1991, that the use of cranes on the LORELAY to load and unload work decks for movement on coastwise-qualified vessels is permitted provided that the LORELAY remains stationary while the cranes are being used.

In the instant submission, you request a ruling on the application of the coastwise laws to the use of the LORELAY's gondola barge for the transportation of pipe between Port Hueneme, California, and the LORELAY. Specifically, Allseas Marine Contractors ("Allseas"), the company contracted to install the pipe, will load pipe in Port Hueneme into the gondola barge. The barge will be towed by a United States-flag tug to the LORELAY, which will either be attached to the quay, moored in the harbor, or free-floating in the harbor. The LORELAY will then be ballasted to permit the barge to be moved into its hold. You state that once the barge is inside the LORELAY, the barge is fixed to and actually becomes part of the hold of the vessel. The LORELAY will then sail to the work site, which is beyond the three mile territorial sea limit. At the work site, the pipe will be moved from the barge by means of elevators, cranes, or conveyor belts to the LORELAY's "firing line" for fabrication and laying.

ISSUE:

Whether the transportation by a foreign-registered barge of pipe for use in a pipe laying project is in violation of the coastwise laws where the pipe is loaded on the barge at one coastwise point, the barge is loaded on the pipe laying vessel at another coastwise point, and the pipe is transferred from the barge to the pipe laying vessel and is payed out at point not embraced within the coastwise laws.

LAW AND ANALYSIS:

Section 883 of Title 46, United States Code Appendix, provides, in pertinent part:

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...), between points in the United States, including Districts, Territories, and possessions thereof 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....

The Customs Service has ruled that a point within the territorial waters of the United States is a point embraced within the coastwise laws. The territorial waters of the United States consist of the territorial sea, defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline, in cases where the baseline and the coastline differ.

The Customs Regulations provide that a coastwise transportation of merchandise takes place when the merchandise is laden at a point embraced within the coastwise laws and is unladen a another coastwise point, regardless of the origin or ultimate destination of the merchandise. 19 C.F.R. 4.80b(a) (1991). Applying this rule to the present facts, the merchandise under consideration--the pipe--is laden on the gondola barge at Port Hueneme, a coastwise point. The barge in turn is moved into the hold of the LORELAY, but at this point, no unlading of the pipe has occurred. The pipe is unladen for purposes of the coastwise laws when it is moved from the gondola barge to the LORELAY for use in the pipe laying operation. This unlading takes place at the work site, which is beyond the territorial waters of the United States. Therefore, the pipe is not unladen at a coastwise point. We find no violation of the coastwise laws. You should be aware, however, that United States law requires that a coastwise-qualified vessel tow the barge between the point of lading and the LORELAY. 46 U.S.C. App. 316(a).

HOLDING:

The transportation by foreign-registered barge of pipe for use in a pipe laying project is not in violation of the coastwise laws where the pipe is loaded on the barge at one coastwise point, the barge is loaded on the pipe laying vessel at another coastwise point, and the pipe is transferred from the barge to the pipe laying vessel and is payed out at point not embraced within the coastwise laws.

Sincerely,

B. James Fritz
Chief

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