HQ 0112581 - Dredging; Coastwise Trade; 46 U.S.C. App. 292, 883 - United States International Trade Commision Rulings

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HQ 112581

February 22, 1993

VES-3/10-02-CO:R:IT:C 112581 GEV

CATEGORY: CARRIER

Thomas L. Wescott
708 Fourth Ave.
Laurel, Montana 59044

RE: Dredging; Coastwise Trade; 46 U.S.C. App. 292, 883

Dear Mr. Wescott:

This is in response to your letter dated January 3, 1993, regarding the M/V ATLANTIC AMERICAN. Your letter enclosed copies of the vessel's Certificate of Inspection and Certificate of Documentation. Our ruling on this matter is set forth below.

FACTS:

The M/V ATLANTIC AMERICAN is an oceangoing, self-propelled hopper dredge issued a Certificate of Documentation from the U.S. Coast Guard endorsed with coastwise, Great Lakes, and registry endorsements. The contractual obligations of the vessel include three geographical scenarios: (1) operating wholly within U.S. waters; (2) daily round trips to international waters and back; and (3) operating continuously outside U.S. waters. During these three scenarios, the vessel is neither calling at port nor tying up to a pier, but is continuously engaging in dredging operations.

In addition to the geographical considerations discussed above, the subject vessel has three modes of operation: (1) continuously engaging in dredging operations ceasing only for weather, broken machinery, etc.; (2) suspending dredging operations temporarily in order to sail to a fuel dock located in U.S. waters for fuel and water; and (3) sailing from one U.S. port to another such port, not dredging and not "on contract".

ISSUE:

Whether geographical area and/or mode of operation are determinative as to a dredge's use in the coastwise trade within the meaning of 46 U.S.C. App. 883 commensurate with its documentation pursuant to 46 U.S.C. 12106.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, 292 (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 this statute, we have ruled that dredging in the United States is prohibited by any foreign-built dredging vessel except one of those named in 2 of the Act of 1906 (Customs Service Decision (C.S.D.) 85-11).

Title 46, United States Code Appendix, 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).

The coastwise laws administered by the Customs Service, which include, inter alia, 46 U.S.C. App. 292 and 883, are applicable only to those vessels engaged in activities in U.S. territorial waters generally 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. In addition, pursuant to 4(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1333(a)), Customs has held that dredging on the outer continental shelf outside United States territorial waters constitutes "dredging in the United States" for purposes of 46 U.S.C. App. 292 (C.S.D. 85-11).

Furthermore, Public Law 100-329 (100 Stat. 508; effective June 7, 1988) amended 46 U.S.C. App. 883 to apply to the transportation of "...valueless material or any dredged material regardless of whether it has commercial value, from a point or place in the United States or a point or place on the high seas within the Exclusive Economic Zone 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 the Exclusive Economic Zone..." (emphasis added) The Exclusive Economic Zone 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.

Accordingly, although the scenarios set forth in your letter do not sufficiently specify the geographical area (i.e., internal waters, territorial sea, OCS or beyond) or the mode of operation (dredging only, or a combination of dredging and transportation of merchandise, valueless material, and/or dredged material) for the subject vessel, you should know that Customs has held that the act of dredging while at anchor or moving about is not, in and of itself, considered to be coastwise trade for purposes of 46 U.S.C. App. 883 (C.S.D. 85-11). However, the transportation of merchandise, valueless material, and/or dredged material between points embraced within the coastwise laws (including points in U.S. territorial waters and/or the EEZ, as discussed above) is coastwise trade and is prohibited unless performed by a vessel that is U.S.- built, owned and documented. In view of the fact that the M/V ATLANTIC AMERICAN has been issued a Certificate of Documentation from the U.S. Coast Guard endorsed with coastwise, Great Lakes, and registry endorsements, there appears to be no impediment to its fulfilling its contractual obligations insofar as Customs administration of 46 U.S.C. App. 292 and 883 are concerned.

HOLDING:

The geographical area and mode of operation are determinative as to a dredge's use in the coastwise trade within the meaning of 46 U.S.C. App. 883 commensurate with its documentation pursuant to 46 U.S.C. 12106.

Sincerely,

Acting Chief

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