HQ 0112038 - Coastwise transportation; Cattle; Indirect transportation; 46 U.S.C. App. 883 - United States International Trade Commision Rulings

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HQ 112038

March 3, 1992

VES-3-CO:IT:C 112038 LLB

CATEGORY: CARRIER

Mr. Don Fancher
Three Toed Feedlot
S/R 35-Highway 281
Quincy, Washington 98848

RE: Coastwise transportation; Cattle; Indirect transportation; 46 U.S.C. App. 883

Dear Mr. Fancher:

Reference is made to your letter of December 10, 1991, in which you seek a ruling on the applicability of the merchandise transportation statute, popularly known as the Jones Act, to the transportation of certain live cattle from Hawaii to Canada and then to Washington State.

FACTS:

The matter under consideration concerns the transportation via non-coastwise-qualified vessel of live cattle from Hawaii. The cattle would initially be landed in Canada. It is stated that they would be the property of a Canadian feedlot operator. They would then be purchased by a domestic concern and transported to Washington State.

ISSUE:

Whether the merchandise transportation statute imposes a barrier to the transportation of cattle from Hawaii to Canada by non-qualified vessel, when those cattle will then be shipped to a point in Washington State.

LAW AND ANALYSIS:

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...), 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...
(Emphasis added).

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 merchandise. 19 CFR 4.80b.

Section 4.80b(a), Customs Regulations (19 CFR 4.80b(a)), promulgated under the authority of 46 U.S.C. App. 883, provides that:

... merchandise is not transported coastwise if at an intermediate port or place other than a coastwise point (that is at a foreign port or place, or at a port or place in a territory or possession of the United States not subject to the coastwise laws), it is manufactured or processed into a new and different product, and the new and different product thereafter is transported to a coastwise point.

In the instant case, the cattle are being transported on one continuous voyage from Hawaii (laden at a coastwise point) to Canada, and from Canada to a destination in Washington State (unladen at a coastwise point). There is no manufacturing or processing of the cattle when first unladen in Canada which breaks the continuity of the transportation under section 4.80b(a). Although section 4.80b(a) is inapplicable to the facts of this case because the cattle are not manufactured into a new and different product in Canada prior to their shipment to Washington State, it should be noted that we have held that cattle transported from Hawaii to Vancouver, British Columbia, and fattened to almost double their original weight also do not result in a new and different product pursuant to 19 CFR 4.80b(a) and subsequent transportation thereof from Vancouver to the United States would result in a violation of 46 U.S.C. App. 883. On the other hand, cattle transported from Hawaii to Vancouver, British Columbia, where they will be slaughtered, dressed or packed etc., result in a new and different product pursuant to 19 CFR 4.80b(a) and subsequent transportation thereof from Vancouver to the United States would not result in a violation of 46 U.S.C. App. 883.

We find that the transportation in question results in a transportation between points in the United States (Hawaii and Washington State), via a foreign port (Canada). The words "either directly or via a foreign port" were inserted in the original statute (46 U.S.C. App. 883) by the Congress in 1893. Congress, seeing how easily the protection to American shipping would be vitiated by a simple transshipment of the same cargo, inserted the words "either directly or via a foreign port" to prohibit such transshipments.

HOLDING:

The transportation of cattle from Hawaii to Canada, and subsequently from Canada to Washington State results in a coastwise transportation under 46 U.S.C. App. 883, which is prohibited in any vessel other that 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 intermediate foreign ownership of the cattle does not alter this result.

Sincerely,

B. James Fritz
Chief

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