HQ 0113147 - Coastwise Trade; Formal Vessel Entry; Dredging; 46 U.S.C. App. 292 and 883; Vessel Manning Requirements - United States International Trade Commision Rulings

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HQ 113147

July 1, 1994

VES-3/10-02-CO:R:IT:C 113147 GOB

CATEGORY: CARRIER

Alex M. Gonzalez, Esq.
Holland & Knight
P.O. Box 015441
Miami, FL 33101-5441

RE: Coastwise Trade; Formal Vessel Entry; Dredging; 46 U.S.C. App. 292 and 883; Vessel Manning Requirements

Dear Mr. Gonzalez:

This is in response to your letter dated June 24, 1994 in which you request a ruling as described infra.

FACTS:

Your client proposes to use a foreign hopper dredge to transport aragonite, a calcareous material, from the Bahamas to various points off the coast of Florida. It proposes to deliver the aragonite, which was dredged in the Bahamas, from the dredge by pumping it through a pipeline onto the beach. You ask the following questions.

ISSUES:

1. Can entry be made at the point where the aragonite is to be discharged rather than at a formal designated port? If entry must be made at a formal designated port, may future voyages on the same project proceed directly to the discharge point?

2. If you must make formal entry at the nearest port, will the movement of the foreign dredge from the port to several points along the coast and/or the final destination point constitute coastwise transportation under the Jones Act?

3. Is it permissible to have foreign workers on board the vessel as it sits offshore while it is pumping the aragonite?

4. Does the use of the foreign hopper dredge to transport and pump Bahamian aragonite from one point offshore to another point along the coastline constitute coastwise transportation or trade under the Jones Act?

LAW AND ANALYSIS:

Issue No. 1

Pursuant to 19 U.S.C. 1434, entry of the vessel is to be made at the customs facility nearest to the point of the discharge of the aragonite prior to the discharge. With respect to future voyages on the same project, entry must be made in the same manner when the vessel arrives from a domestic port or from a foreign port or place, i.e., from outside the customs territory of the United States.

Issue No. 2

46 U.S.C. App. 883, the coastwise merchandise statute often referred to as the "Jones Act", provides in 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, 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...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...

The movement of the dredge from the Customs port to several points along the coast and/or the final destination point does not constitute coastwise transportation under the Jones Act because there is no lading of merchandise at a coastwise point.

Issue 3

There are no "vessel manning" requirements which we are aware of with respect to foreign-flag vessels.

Issue 4

The dredging statute, 46 U.S.C. App. 292 states:

Vessels that may engage in dredging

(a) In general

Except as provided in subsection (b) of this section, a vessel may engage in dredging in the navigable waters of the United States only if -

(1) the vessel meets the requirements of section 883 of this title and sections 802 and 803 of this title for engaging in the coastwise trade;

(2) when chartered, the charterer of the vessel is a citizen of the United States under sections 802 and 803 of this title for engaging in the coastwise trade; and

(3) for a vessel that is at least 5 net tons, the vessel is documented under chapter 121 of Title 46 with a coastwise endorsement.

(b) Exception

A documented vessel with a registry endorsement may engage in the dredging of gold in Alaska.

(c) Penalty

When a vessel is operated in knowing violation of this section, that vessel and its equipment are liable to seizure by and forfeiture to the United States Government.

The court in Gar-Con Development v. State, 468 So. 2d 413 (Fla. App. 1 Dist. 1985) stated as follows:

Dredging is defined as "excavation" by any means...The word "excavation" 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.

The proposed activity involves the deposit at United States sites of materials taken aboard a dredge in the Bahamas, which is not a coastwise point. 46 U.S.C. App. 292 is not applicable in this instance because there is no dredging in the navigable waters of the United States.

Similarly, 46 U.S.C. App. 883 is not applicable because there is no lading of merchandise at a coastwise point.

HOLDINGS:

As detailed supra: formal entry must be made at the customs facility each time that the vessel arrives from a domestic port or from a foreign port or place; the proposed activity is not prohibited by 46 U.S.C. App. 883 or 292; and there are no "vessel manning" requirements which are applicable with respect to the vessel.

Sincerely,

Arthur P. Schifflin
Chief

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