HQ 0112209 - Coastwise; Foreign-Flag Vessel; Sixth Proviso; Stevedoring Equipment; Cranes; Grabs; Excavator; 46 U.S.C. App. 883. - United States International Trade Commision Rulings

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HQ 112209

April 23, 1992

VES-3-17/3-20 CO:R:IT:C 112209 JBW

CATEGORY: CARRIER

Jim McKay
Southern Star Shipping Co.
245 Park Avenue
New York, New York 10167-0248

RE: Coastwise; Foreign-Flag Vessel; Sixth Proviso; Stevedoring Equipment; Cranes; Grabs; Excavator; 46 U.S.C. App. 883.

Dear Mr. McKay:

This letter is in response to your facsimile transmission of April 21, 1992, in which you request a ruling on the application of the coastwise laws to the transportation of certain grabs and excavators for use in unlading scrap steel.

FACTS:

Your company acts as vessel agent for a shipping company that intends to transport scrap steel between Portsmouth, New Hampshire, and Matanzas, Venezuela. The vessel that will be used to transport the scrap steel is the M/V CHRISTINA C, a Greek- registered bulk carrier. In order to unload this cargo in Venezuela, you state that you must have on board two excavators and four orange peel-type grabs for use with the ship's cranes. The excavators are required to move the steel to a place in the hold of the ship to permit the grabs to remove the steel. The excavators and grabs have been transported by land from Florida to New Hampshire for loading on the vessel. After the discharge of the cargo in Venezuela, the excavators and grabs will be returned to an unspecified point in the United States either by the CHRISTINA C or by another vessel. You state that the excavators and grabs are owned by the vessel operator and will be transported without freight charge.

ISSUE:

Whether a Greek-registered ship may transport in the coastwise trade excavators and grabs that will be used to unload scrap steel from the ship.
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....

46 U.S.C. App. 883. 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.

Pursuant to the sixth proviso of 46 U.S.C. App. 883, the prohibitions contained in that section do not apply to the coastwise transportation of, among other items, stevedoring equipment in vessels of foreign nations that are found to extend reciprocal privileges to vessels of the United States. The foreign nations that have been found to extend these privileges to vessels of the United States are listed in section 4.93(b)(2) of the Customs Regulations; Greece is among those countries. The CHRISTINA C, as a Greek-registered vessel, may transport stevedoring equipment.

Having found that the vessel may be used to transport stevedoring equipment, we must determine whether the items to be transported qualify as stevedoring equipment subject to the exception. The Customs Service considers items qualifying as stevedoring equipment to be limited to equipment that is necessary to unlade cargo from its place of stowage aboard a vessel to its first place of rest on the shore or to lade cargo from its last place of rest on the shore to its place of stowage aboard a vessel. T.D. 91-87, 56 Fed. Reg. 51168, 51169 (October 10, 1991). This definition eliminates from consideration any equipment used to manipulate cargo while it is ashore. Id. Further, the statute requires that the stevedoring equipment be owned or leased by the owner or operator of the vessel or the stevedoring company and that the equipment be transported without charge for use in the handling of cargo in the foreign trade. 46 U.S.C. App. 883; 19 C.F.R. 4.93(a)(2).

From these definitions, we determine that the excavators and the grabs may be transported by the subject vessel under the exemption provided for by the sixth proviso. The excavators and grabs are necessary to unlade the particular cargo being carried by the vessel. The equipment is owned by the vessel operator and will be transported without freight charge. We note, however, that the items being transported may be used in a variety of situations not related to the loading and unloading of cargo. Consequently, our determination that the excavators and grabs qualify as stevedoring equipment is restricted to the transportation and use of these items on the subject vessel. Any use of these items for purposes other than unlading the scrap steel from its place of stowage on the vessel will result in a violation of 46 U.S.C. App. 883 upon the return of these items to the United States, unless they are returned to their point of lading.

Finally, you raise the possibility that the equipment will be returned to the United States in a vessel other than the CHRISTINA C. The law requires that the vessel providing the transportation must, itself, be the object of use of the stevedoring equipment. T.D. 91-87. Consequently, any vessel other than the CHRISTINA C that provides the return transportation for the excavators and grabs must either use this equipment for the loading or unloading of cargo or operate with a coastwise endorsement.

HOLDING:

The excavators and the grabs described above may be transported by the subject vessel under the exemptions provided for by the sixth proviso. Our determination that the excavators and grabs qualify as stevedoring equipment is restricted to the transportation and use of these items on the vessel. Any use of these items for purposes other than unlading the scrap steel from its place of stowage on the vessel will result in a violation of 46 U.S.C. App. 883 upon the return of these items to the United States, unless they are returned to their point of lading.

Sincerely,

B. James Fritz
Chief

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