HQ 0112392 - Fisheries; Coastwise Trade; U.S.-Flag Processor; 46 U.S.C. 12101(a); 46 U.S.C. App. 883 - 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 > 1994 HQ Rulings > HQ 0088743 - HQ 0112581 > HQ 0112392

HQ 112392

September 1, 1992

VES-3/7-CO:R:IT:C 112392 GEV

CATEGORY: CARRIER

Lieutenant Commander Jeffrey D. Stieb
Staff Attorney, Vessel Documentation and
Tonnage Survey Section, Merchant Vessel
Inspection and Documentation Division
United States Coast Guard
2100 Second Street, S.W.
Washington, D.C. 20593-0001

RE: Fisheries; Coastwise Trade; U.S.-Flag Processor; 46 U.S.C. 12101(a); 46 U.S.C. App. 883

Dear Lieutenant Commander Stieb:

This is in response to your letter dated July 24, 1992 (your file: G-MVI-5/13 16713/31/2, with enclosures) forwarding a request for a ruling from the Seventeenth Coast Guard District in Juneau, Alaska. Our ruling on this matter is set forth below.

FACTS:

The U.S. Coast Guard Cutter YOCONA boarded the vessel ALL ALASKAN (Official No. 248773) on December 14, 1991, in position 56-37N 169-34W which is north of St. George Island, Alaska, approximately 1400 yards from shore in the Bering Sea. The vessel is a U.S.-flag 363' processor, documented only for the fisheries. The vessel is currently restricted from engaging in the coastwise trade due to too much foreign involvement in the stock ownership.

The boarding officer provided a synopsis of the vessel's movements and activities from November 1 - December 11, 1991, as follows:

DATE POSITION ACTIVITY
1-17 Nov. Anchored 2.6NM On-loading crab at Port Moller inside Doe Pt.

15 Nov. Same Off-loading crab to HAKUYO MARU

17-26 Nov. Anchored 0.75NM On-loading crab Port Moller S. of Gravel Pt.

26 Nov. Moved to 1.0NM unknown, possibly for repairs W. of Entrance Pt.

27 Nov.- Anchored 0.75 S. On-loading crab Port Moller 8 Dec. of Entrance Pt.

4-8 Dec. Same Off-loaded crab to vessel JACHA

11 Dec. 56-37N 169-34W Anchored N. of St. George Island

Port Moller is located on the Alaska Peninsula and St. George Island is approximately 300 nautical miles to the northwest in the Bering Sea. In order to reach St. George Island it is necessary to transit the high seas.

The vessel did not completely off-load crab on November 15, 1991. In fact, it moved three times prior to off-loading to the JACHA from December 4-8, 1991.

In addition, records from the vessel also indicate that its crew sold fuel, stores, food and bait to catcher vessels in Port Moller. According to the master the bait was obtained from Japanese trampers, the vessel's purser stated stores and food were purchased in Seattle through the company purchasing agent, and fuel was purchased at Port Moller from Petro Marine Barge FNT-180.

Furthermore, copies of "Material Requisition" forms obtained from the master indicate the vessel's crew sold bait, stores, food and fuel to the ALASKA TRADER between November 14 - December 6, 1991 within the three mile U.S. territorial sea. As noted above, the vessel moved at least three times within the Port Moller area during this time period.

ISSUES:

1. Whether a U.S-flag processing vessel not eligible to receive a coastwise endorsement pursuant to 46 U.S.C. 12106 is engaged in the coastwise trade in violation of 46 U.S.C. App. 883 when it lades crab, processes it, then unlades the processed crab at various locations entirely within the U.S. territorial sea.

2. Whether a U.S.-flag processing vessel not eligible to receive a coastwise endorsement pursuant to 46 U.S.C. 12106 is engaged in the coastwise trade in violation of 46 U.S.C. App. 883 when it lades crab, processes it, then unlades portions of the processed crab at various locations entirely within the U.S. territorial sea, then moves to another location within the U.S. territorial sea after transiting the high seas to unlade the remainder of the processed crab.

3. Whether a U.S.-flag processing vessel not eligible to receive a coastwise endorsement pursuant to 46 U.S.C. 12106 is engaged in the coastwise trade in violation of 46 U.S.C. App. 883 when it lades bait, stores, food and fuel at either a U.S. port or on the high seas, and transports those items for sale to various locations within the U.S. territorial sea where they are unladed.

LAW AND ANALYSIS:

The Commercial Fishing Industry Vessel Anti-Reflagging Act of 1987 (the "Act", Pub. L. 100-239; 101 Stat. 1778) amended 46 U.S.C. 12101(6) by changing the definition of "fisheries" set forth therein to include the "processing, storing, and transporting (except in foreign commerce)" of fish and related fishery resources in United States navigable waters and the Exclusive Economic Zone (EEZ), as well as the catching-related activities provided for in the former definition. Accordingly, the new definition of fisheries, now set forth in 46 U.S.C. 12101(a)(1) reads as follows:

"fisheries" includes processing, storing, transporting (except in foreign commerce), planting, cultivating, catching, taking, or harvesting fish, shellfish, marine animals, pearls, shells, or marine vegetation in the navigable waters of the United States or in the exclusive economic zone.

The EEZ is defined in Presidential Proclamation 5030 of March 10, 1983 (48 FR 10605), as extending outward for 200 nautical miles from the baseline from which the territorial sea is measured.

The above definition of fisheries supersedes the definition of "fishing" found in section 4.96(a)(5), Customs Regulations (19 CFR 4.96(a)(5) which included the transportation of marine products by a vessel other than the taking vessel under the complete control and management of a common owner or bareboat charterer. It should be noted that this superseded definition was applicable only to the transportation of marine products taken and transferred on the high seas and did not provide any exception to the coastwise laws.

Title 46, United States Code, section 12108(b) limits the employment in the fisheries to a vessel issued a certificate of documentation with a fishery endorsement, "subject to the laws of the United States regulating the fisheries" (see e.g., 16 U.S.C. 1801, et seq., under which a foreign vessel may obtain a permit from the National Marine Fisheries Service to engage in fishing in the EEZ). Pursuant to 19 U.S.C. 1401(a), the word "vessel" includes every description of water craft or other contrivance
used, or capable of being used, as a means of transportation in water, but does not include aircraft. Under 46 U.S.C. 12108(a), only a vessel eligible for documentation (i.e., over 5 net tons and owned by a U.S. citizen) which was built in the United States may be endorsed for the fisheries. Pursuant to 46 U.S.C. 12108(b), subject to the laws of the United States regulating the fisheries, only a vessel so endorsed may engage in the fisheries.

Title 46, United States Code Appendix, section 883 (46 U.S.C. App. 883), the coastwise merchandise statute often called the "Jones Act", provides, in part, that no merchandise shall 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 vessel other 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 (i.e., a coastwise-qualified vessel). This statute has been found to apply even to the transportation of merchandise from point to point within a harbor. Pursuant to 19 U.S.C. 1401(c), the word "merchandise" means goods, wares and chattels of every description and includes fish and fish products. We note, however, that Public Law 97-389 (96 Stat. 1954) amended section 883 to exclude from its application "...supplies aboard United States documented fish processing vessels, which are necessary and used for the processing or assembling of fishery products aboard such vessels..."

The coastwise laws generally apply to points in 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. (It should be noted that although Presidential Proclamation 5928 of December 27, 1988, extended the U.S. territorial sea to 12 miles, this extension is only for international purposes. Thus, Customs enforcement activities are not altered as a result of the proclamation.)

In regard to Issues 1, 2 and 3 above, we note that the operation of the vessel in question involved the transportation of various articles between points within the U.S. territorial sea. Counsel for the vessel owner contends, in part, that although this transportation between coastwise points was done by a vessel which did not meet the 75% U.S. ownership requirement for corporate-owned vessels engaging in the coastwise trade pursuant to 19 U.S.C. App. 802, it is nonetheless permissible in view of the fact that the vessel in question is documented for the fisheries and that such "...a vessel which engages in the transportation only of fish does not require a coastwise trade
license." (See page 1 of counsel's letter marked "Enclosure 2") For the reasons set forth below, we are not in accord with this position.

The legislative history of the Anti-Reflagging Act of 1987 indicates that one of the purposes of its enactment was to reconcile differences between United States fisheries laws and maritime law. In the House Report on this Act (H.R. Rep. No. 100-423, 100th Cong., 1st Sess. (1987); published at 1987 U.S.C.C.A.N. 3245), this is described as the "genesis of the legislation." The aforementioned reconciliation, however, cannot be construed as means of superseding or overriding the coastwise laws. It should be noted that Customs, in rulings involving the coastwise laws (specifically 46 U.S.C. App. 883), has stated that there is no transportation in violation of section 883 unless there is both a lading and an unlading at a coastwise point, based on the precise reading that must be given to all punitive statutes. (see 19 CFR 4.80b(a)) Section 883 provides, in pertinent part, that "[n]o merchandise shall be transported by water, or by land and water,...between points in the United States...embraced within the coastwise laws." The clear language of section 883 contemplates both a lading at a coastwise point and an unlading at a coastwise point. This is the scenario set forth in Issues 1 , 2 and 3 above. The definition of "fisheries" in 46 U.S.C. 12101(a)(1) includes, inter alia, the transportation of shellfish in the EEZ and the navigable waters of the United States. It does not refer to a coastwise movement, merely a transportation (see Customs rulings 111018, 111630, 111639 and 111760).

Accordingly, in regard to Issues 1 and 2, the transportation by the processing vessel of crab from its point of lading in the U.S. territorial sea to various locations within the U.S. territorial sea where the crab is unladed after processing on board the vessel constitutes coastwise trade pursuant to 46 U.S.C. App. 883. The fact that a vessel at some time during the course of a coastwise movement transits the high seas is of no consequence.

In regard to Issue 3, any article laded outside of U.S. territorial waters and unladed within U.S. territorial waters is not considered to have moved coastwise. Accordingly, the bait in question, if laded from Japanese trampers outside the U.S. territorial sea and subsequently unladed at a coastwise point, would not be transported in violation of 46 U.S.C. App. 883. We note, however, that the stores and food (purchased in Seattle) and the fuel (purchased at Port Moller), all of which were sold to the ALASKA TRADER within the U.S. territorial sea, do appear to have been transported coastwise. Although these items would not ordinarily be considered merchandise for purposes of 46 U.S.C. App. 883, the fact that they were not used by the ALL ALASKAN but were being transported for sale renders
applicable the restrictive provisions of that statute. This rationale is supported by the Public Law 97-389, cited above, wherein there exists an exclusion from the applicability of section 883 for "...supplies aboard United States documented fish processing vessels, which are necessary and used for the processing or assembling of fishery products aboard such vessels..." (emphasis added)

HOLDINGS:

1. A U.S.-flag processing vessel not eligible to receive a coastwise endorsement pursuant to 46 U.S.C. 12106 is engaged in the coastwise trade in violation of 46 U.S.C. App. 883 when it lades crab, processes it, then unlades the processed crab at various locations entirely within the U.S. territorial sea.

2. A U.S.-flag processing vessel not eligible to receive a coastwise endorsement pursuant to 46 U.S.C. 12106 is engaged in the coastwise trade in violation of 46 U.S.C. App. 883 when it lades crab, processes it, then unlades portions of the processed crab at various locations entirely within the U.S. territorial sea, then moves to another location within the U.S. territorial sea after transiting the high seas to unlade the remainder of the processed crab.

3. A U.S.-flag processing vessel not eligible to receive a coastwise endorsement pursuant to 46 U.S.C. 12106 is engaged in the coastwise trade in violation of 46 U.S.C. App. 883 when it lades bait, stores, food and fuel at a U.S. port and transports those items for sale to various locations within the U.S. territorial sea where they are unladed.

Sincerely,

B. James Fritz

Previous Ruling Next Ruling