HQ 0112905 - Coastwise; Construction; Barge; Crane; Work Platform; 46 U.S.C. app. 883. - United States International Trade Commision Rulings

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HQ 112905

November 3, 1993

VES-3-06 CO:R:IT:C 112905 JBW

CATEGORY: CARRIER

William S. Magann
W. F. Magann Corporation
3220 Mariner Avenue
Portsmouth, Virginia 23703

RE: Coastwise; Construction; Barge; Crane; Work Platform; 46 U.S.C. app. 883.

Dear Mr. Magann:

This letter is in response to your inquiry dated September 23, 1993, in which you request a ruling on the application of the United States coastwise laws to the use of a foreign-built, United States-flagged construction barge in Puerto Rico and in Guantanamo, Cuba.

FACTS:

In your letter, you state that your company is engaged in marine construction. You are currently bidding for jobs with the United States Navy in Cuba and with the Army Corps of Engineers in Puerto Rico. Your company was recently awarded a contract to build a rock breakwater in Aguadilla, Puerto Rico. You state that you intend to use in this project a foreign-built barge that is documented with a United States registry. While in use at the work site, the barge will be used as a work platform. The barge will also be used to transport construction equipment from your company's home port in Virginia to the work site and back. The barge will not be used to transport construction materials that will be incorporated in the breakwater.

ISSUE:

(1) Whether the coastwise laws prohibit the use of a foreign- built construction barge in United States waters.

(2) Whether a foreign-built barge may transport construction equipment between points in United States waters.

LAW AND ANALYSIS:

The coastwise laws of the United States prohibit the transportation of merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built 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 (referred to as "the Jones Act"). Generally, the coastwise laws apply to points within the territorial sea of the United States, 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. Headquarters Ruling Letter 111275, dated November 13, 1990.
The coastwise laws are applicable to the waters of Puerto Rico, 46 U.S.C. app. 877, but are not applicable to the waters of Guantanamo Bay, Cuba. Headquarters Ruling Letter 112538, dated January 15, 1993.

The Customs Service has consistently held that a non- coastwise-qualified vessel used as a moored facility within territorial and internal waters does not engage in the coastwise trade and consequently does not violate the coastwise laws, or any other law administered by the Customs Service, provided that the vessel remains stationary. E.g., C.S.D. 89-107, 23 Cust. B. & Dec., No. 44, 8, 9 (1989). Thus, the use of a foreign-built, moored, stationary barge for construction does not violate the coastwise laws. If, however, the vessel is not secured or attached to the seabed while in use, then such operations would be prohibited by the coastwise laws.

We note that although the vessel under consideration may not be engaging in the coastwise trade while in operation as a moored, stationary construction facility, the vessel itself will become a coastwise point if used as such. C.S.D. 89-107. Therefore, any vessel moving merchandise or passengers between the stationary platform and another coastwise point must be documented for the coastwise trade. 46 U.S.C. App. 289 & 883. Furthermore, United States law requires that a coastwise-qualified vessel tow the vessel under consideration between coastwise points. 46 U.S.C.A. App. 316(a).

The barge itself may not have any passengers or merchandise aboard during its initial movement to the work site, during its movement from work site to work site, or during its movement following the completion of the project, provided these sites are points subject to the application of the coastwise laws. C.S.D. 89-107. The term merchandise does not include legitimate equipment and supplies of the barge. C.S.D. 79-331, 13 Cust. B. & Dec. 1496, 1498 (1979). The Customs Service has defined equipment to include portable articles necessary or appropriate for the operation of the vessel, but not permanently incorporated in or permanently attached to its hull or propelling machinery. Id. We stress that equipment must be used in conjunction with the barge; construction equipment merely transported on the barge to the work site and is used independently from the barge is merchandise subject to the prohibition.

HOLDING:

(1) The coastwise laws do not prohibit the use of a non- coastwise-qualified barge for construction activities provided that the barge, while operating, is moored and remains stationary. Under such circumstances, the barge becomes a coastwise point itself. Transportation of passengers and merchandise to or from the barge and other coastwise points must be by coastwise-qualified vessels. Coastwise-qualified vessels must be used to tow the barge between coastwise points.

(2) While being moved from the home port to the work site or from work site to work site, the barge may not transport passengers or merchandise. The Customs Service has defined equipment to include portable articles necessary or appropriate for the operation of the vessel, but not permanently incorporated in or permanently attached to its hull or propelling machinery. Sincerely,

Arthur P. Schifflin

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