HQ 0112074 - Application of the dredge statute (46 U.S.C. App. 292) to dredging in South Carolina. - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1992 HQ Rulings > HQ 0112009 - HQ 0112144 > HQ 0112074

HQ 112074

May 14, 1992

VES 7-03 CO:R:IT:C 112074 BEW

CATEGORY: CARRIER

John V. Esposito, Esquire
Esposito & Esposito
21 New Orleans Road
Hilton Head Island, South Carolina 29938

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

Dear Mr. Esposito:

This is in reference to your letter dated January 14, 1992, in which you inquire as to whether or not there are any requirements that dredges must be built in the United States in order to engage in, dredging operations in the United States.

FACTS:

You state that there is an increased interest in "beach nourishment" in the United States. In South Carolina, an extensive beach nourishment project has just been completed in Hilton Head Island. You state that planning is now underway for a maintenance program for beach nourishment. You state that this will involve the pumping of sand from off shore on to the beach. You ask whether a foreign-built dredge can be used for this operation.

ISSUES:

Whether the use of a foreign-built dredge to dredge sand from an off-shore point in South Carolina and pump it on to the beach at Hilton Head Island, South Carolina, is prohibited under 46 U.S.C. App. 292

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 construction 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.

While the statute does not define dredging, other sources offer helpful guidelines. The Florida Administrative Code, Rule 17-4.02(12) defines dredging 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. Gar-Con Development v. State, 468 So. 2d 413 (Fla. App. 1 Dist. 1985).

Customs has long held that dredging in United States territorial waters, and certain dredging on the United States Outer Continental Shelf outside territorial waters, is dredging in the United States, for purposes of section 292.

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.

Giving the word "excavate" its common, plain and ordinary meaning, the proposed dredging and pumping of sand operation would be dredging in that the operation would be removing soil from the seabed.

Given the foregoing definition, it is clear that the proposed activity constitutes dredging so as to come within the purview of 46 U.S.C. App. 292, as discussed above.

In conclusion, a foreign-built dredge may not engage in dredging in the United States, including the islands in South Carolina, 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.

Customs has held, however, that the use of a dredge in effecting the movement of dredged material through a pipeline, and not by movement of the dredge itself, is not considered transportation of merchandise by the dredge between points within the United States within the meaning of 46 U.S.C. App. 883 (See ruling letters 101671 ML; 104541 PH; 106913 PH and 109056 GV).

HOLDING:

The use of a foreign-built dredge to engage in dredging in the harbors and islands of South Carolina is prohibited under 46 U.S.C. App. 292.

Sincerely,

B. James Fritz

Previous Ruling Next Ruling