HQ 113481 - Coastwise Trade; Merchandise; Passengers; Logistics Support; GLORITA; 46 U.S.C. App. ? 289, 883 - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1995 HQ Rulings > HQ 113298 - HQ 113511 > HQ 113481

Previous Ruling Next Ruling
HQ 113481

June 29, 1995

VES-3-R:IT:C 113481 GEV

CATEGORY: CARRIER

Mitchell G. Seil
Operations Manager
American Workboats
Pier 14, First Floor
Honolulu, Hawaii 96817

RE: Coastwise Trade; Merchandise; Passengers; Logistics Support; GLORITA; 46 U.S.C. App. ? 289, 883

Dear Mr. Seil:

This is in response to your letter of June 14, 1995, requesting a ruling regarding the use of a vessel to provide logistics support to National Marine Fisheries Service (NMFS) field research camps in the Northwestern Hawaiian Islands. Enclosed with your letter was a copy of the vessel's documentation from the States of Oregon and California, a copy of the letter award sent to you describing the scope of the work as per the contract, and a copy of the narrative report regarding the subject vessel.

FACTS:

On March 22, 1995, the U.S. Department of Commerce, National Oceanic and Atmospheric Association (NOAA), Western Administration Support Center (WASC) Procurement Division-WC32, awarded contract no. 50ABNA500036 to Geo 3 Incorporated of 2090 Navato Boulevard, Navato, California, owners of the GLORITA. The subject vessel, which was built foreign, is not documented under the laws of the United States by the U.S. Coast Guard having been removed from such documentation as of June 5, 1990.

The aforementioned contract requires that the vessel provide logistics support in the Northwestern Hawaiian Islands. Specifically, the vessel was to load, store, transport and unload government equipment, supplies, and scientific personnel. The transportation in question was to take place between Honolulu and remote NMFS field research camps located at Laysan Island, - 2 -

Lisianski Island, Pearl and Hermes Reef, French Frigate Shoals, and Kure Atoll. The transportation was to take place on two cruises during March and May of 1995. Included among those items transported were seven caged seal pups to be released in the wild.

ISSUE:

Whether the use of the GLORITA to conduct logistics operations for the NMFS between points within the State of Hawaii pursuant to the terms of the NOAA contract described above was violative of 46 U.S.C. App. ?? 289 and 883.

LAW AND ANALYSIS:

The Act of June 19, 1886, as amended (24 Stat. 81; 46 U.S.C. App. ? 289, sometimes called the coastwise passenger law), provides that:

No foreign vessel shall transport passengers between ports or places in the United States either directly or by way of a foreign port, under a penalty of $200 for each passenger so transported and landed.

Customs has consistently interpreted the above prohibition to apply to all vessels except United States-built, owned, and properly documented vessels (see 46 U.S.C. ? 12106, 12110; 46 U.S.C. App. ? 883; 19 CFR ? 4.80). Furthermore, for purposes of the above statute a "passenger" is defined as "...any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business." (See 19 CFR ? 4.50(b))

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, including merchandise owned by the United States Government, ...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... (Emphasis added)

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 any article, including valueless materials (see amendment to ? 883 by the Act of June 7, 1988, Pub.L. 100-329; 102 Stat. 588).

In its interpretation of the coastwise laws, Customs has long held that the use of a vessel solely to engage in oceanographic research is not considered a use in the coastwise trade (see ruling letters 109344, dated July 6, 1988, and 110399, dated August 23, 1989). We have held that the use of non-coastwise-qualified vessels to engage in oceanographic research, including the transportation of persons participating in such research to, from, and between research sites in United States territorial waters, whether or not the persons participating in the research temporarily leave the vessels at the research sites, would not violate the coastwise laws. Furthermore, we have held that the collection of marine specimens at the research sites and the transportation of those specimens from the research sites to points in the United States would not violate the coastwise laws. Of course, if such a vessel transported between coastwise points, or provided any part of such transportation, of any persons other than the vessel crew, persons engaging in oceanographic research and students receiving instruction in such research, or any merchandise other than the usual supplies and equipment necessary for the research and/or research specimens or samples, the coastwise laws would be violated.

This interpretation of the coastwise laws is buttressed by the Act of July 30, 1965 (Pub.L. 89-99; 79 Stat. 424; 46 U.S.C. App. ?? 441-444, often called the Oceanographic Research Vessel Act), as amended, ? 3 (46 U.S.C. App. ? 443) of which provides that, "An oceanographic research vessel shall not be deemed to be engaged in trade or commerce." This Act, in defining the term "oceanographic research vessel," defines oceanographic research as "...including, but not limited to, such studies pertaining to the sea as seismic, gravity meter and magnetic exploration and other marine geophysical or geological surveys, atmospheric research, and biological research." (46 U.S.C. App. ? 441(1))

In regard to the GLORITA, upon reviewing the terms of the contract it is apparent that the vessel was not obtained for the purpose of engaging in any form of oceanographic research. No reference to any such activity is made therein. Rather, the contract specified that the vessel was to be used merely as a means of waterborne transportation for supplies and equipment (i.e., "merchandise") as well as scientific personnel (i.e., "passengers") from Honolulu destined to NMFS research camps located at other points within the State of Hawaii. In view of the fact that the vessel is foreign-built and therefore precluded from being documented for the coastwise trade, this transportation constituted an illegal engagement in the coastwise trade in violation of both 46 U.S.C. App. ?? 289 and 883.

HOLDING:

The use of the GLORITA to conduct logistics operations for the NMFS between points within the State of Hawaii pursuant to the terms of the NOAA contract described above was violative of 46 U.S.C. App. ?? 289 and 883.

Parenthetically, we note that in view of our above holding, should you choose to pursue this matter further, we suggest you contact the District Director, U.S. Customs Service, in Honolulu.

Sincerely,

Previous Ruling Next Ruling