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HQ 113465

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June 22, 1995

VES-3-06-R:IT:C 113465 GEV

CATEGORY: CARRIER

Edward K. Roe
President
Clean Channel Association
111 East Loop North, Room 270
Houston, Texas 77029

RE: Coastwise Trade; Oil Skimming Vessel; 46 U.S.C. App. ? 883

Dear Mr. Roe:

This is in response to your letter of May 25, 1995, to Capt. George M. Williams, Commandant G-MVI, U.S. Coast Guard (USCG) Headquarters, regarding the use of the LORI BEAVER in oil skimming operations. You enclosed the seller's position on this matter in your letter. In view of the fact that this matter is within the purview of the U.S. Customs Service, your letter was forwarded to this office for direct response. Our ruling is set forth below.

FACTS:

Hyde Products of Cleveland, Ohio has offered for sale a 19 ft. work boat with a LORI skimming system and one cubic meter of storage capacity for skimmed oil. The boat, called the LORI BEAVER, was exhibited at the 1993 International Oil Spill Conference and has had considerable exposure. It is presently stored in Houston.

Clean Channel Association, as a potential purchaser, is concerned that since the hull of the vessel was manufactured in Finland, its use in oil skimming operations in the United States may be contrary to law. The vessel is stated to be approximately four tons and would transport up to one cubic meter of recovered oil as part of skimming operations.

ISSUE:

Whether the use of a foreign-built vessel in oil skimming operations in United States waters constitutes coastwise trade in violation of 46 U.S.C. App. ? 883.

LAW AND ANALYSIS:

The coastwise law pertaining to the transportation of merchandise, ? 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, in pertinent part, 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 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 ...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...

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. The term "merchandise" as used in ? 883 includes valueless material (see amendment to ? 883 by the Act of June 7, 1988, Pub.L. 100-329; 102 Stat. 588). Furthermore, the statute provides that the prohibitions set forth therein 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 [(EEZ)] 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 that [EEZ]." Id. The March 10, 1983, Presidential Proclamation defined the EEZ as a zone contiguous to the territorial sea extending to a distance 200 nautical miles from the territorial sea baseline.

From the above statutory framework, the Customs Service has concluded that the removal of surface oil by skimming constitutes a lading of merchandise (see Headquarters Ruling 111420, dated June 17, 1991). The deposit of the skimmed oil at a point other than which it is laded would constitute an unlading of merchandise. The merchandise coastwise law (46 U.S.C. App. and documented) for such recovery and transportation of oil in waters within its jurisdiction as discussed above (see Headquarters Ruling 110386, dated September 29, 1989).

Accordingly, the use of the foreign-built LORI BEAVER in skimming operations in waters subject to 46 U.S.C. App. ? 883 constitutes a violation of that statute. Parenthetically, we note that if in fact this vessel is less than five net tons thereby excluding it from the U.S. Coast Guard documentation requirements (see ? 67.9, USCG Regulations, 46 CFR ? 67.9), it would still be prohibited from engaging in the coastwise trade in view of its having been built foreign (see ? 4.80(a)(2), Customs Regulations, 19 CFR ? 4.80(a)(2)).

HOLDING:

The use of a foreign-built vessel in oil skimming operations in United States waters constitutes coastwise trade in violation of 46 U.S.C. App. ? 883.

Sincerely,

Arthur P. Schifflin

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