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July 8, 1994

HQ 113032

VES-3-CO:R:IT:C 113032 LLB

CATEGORY: CARRIER

Mr. Bill Thayer
President and General Manager
Waldron Steamship Company, Ltd.
Pier One Control Tower
Honolulu, Hawaii 96813

RE: Coastwise trade; Indirect shipment; Shipping to Hawaii; 46 U.S.C. App. 883; Third proviso

Dear Mr. Thayer:

Reference is made to your request for a ruling on the legality of moving cargo from the mainland United States to Hawaii, through a location in Canada.

FACTS:

It is proposed that steel of United States origin be shipped by either truck or rail to the port of Vancouver, British Columbia, Canada. The steel would then be placed aboard a foreign-flag vessel together with merchandise originating at that port. The vessel would then proceed to Hawaii where all cargo would be discharged.

ISSUE:

Whether merchandise transported by either truck or rail from a point in the United States to Vancouver, British Columbia, Canada, may then be placed aboard a foreign-flag vessel for transportation to and discharge in Hawaii without violating the provisions of the coastwise merchandise transportation statute.

LAW AND ANALYSIS:

The coastwise law pertaining to the transportation of merchandise, section 27 of the Act of June 5, 1920, as amended (41 Stat. 999; 46 U.S.C. App. 883, often called the Jones Act), provides that:

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 trans- portation, 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...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...

Under the plain terms of the statute,the proposed transportation would be a violative indirect transportation via foreign territory. The proposed transportation would not be covered within the terms of the so-called third proviso to section 883. That proviso would permit transportation of the type described if the United States points involved were either in the continental United States or Alaska, but not Hawaii.

HOLDING:

Merchandise may not be transported in part by a foreign-flag vessel between a point in the continental United States and Hawaii, via a port of lading in Hawaii. Such a movement would be in violation of 46 U.S.C. App. 883.

Sincerely,

Arthur P. Schifflin

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