HQ 114305 - Coastwise Trade; Cable-Laying; Vessel Equipment; 46 U.S.C. App. ? 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 > 1998 HQ Rulings > HQ 114268 - HQ 114493 > HQ 114305

Previous Ruling Next Ruling
HQ 114305

March 31, 1998

VES-3-01-RR:IT:EC 114305 GEV

CATEGORY: CARRIER

Terrence B. Price
Secretary Treasurer
Robert E. Landweer & Co., Inc.
911 Western Avenue, Suite 208
Seattle, Washington 98104

RE: Coastwise Trade; Cable-Laying; Vessel Equipment; 46 U.S.C. App. ? 883

Dear Mr. Price:

This is in response to your letter dated March 23, 1998, regarding the proposed use of a foreign-flagged vessel in a cable-laying operation in Alaska. Our ruling in this matter is set forth below.

FACTS:

A local company represented by Robert E. Landweer & Co., Inc., has been awarded a cable-laying contract in Alaska. In connection with this contract the company has chartered a Panamanian-flagged cable-laying vessel.

The current program calls for the vessel to arrive at Morgan City, Louisiana, where the charter will start. In Morgan City the vessel will load cable-handling equipment and tools necessary for the loading of cable. Upon completion of this loading the vessel will sail to South Hampton, England, to load the cable. This loading can only be done with the cable-handling equipment placed on the vessel in Morgan City.

Upon completion of the cable loading, the vessel will proceed to Seattle, Washington, where the balance of the cable-handling equipment will be loaded onto the vessel. The vessel will then proceed to Alaska to lay cable between Skagway, Alaska, and Haines, Alaska. There will be no dredging operations performed in connection with the cable-laying. Upon completion of the job, any excess cable (expected to be a small amount) will be offloaded in Skagway.

The vessel will then proceed back to Seattle where the equipment loaded at Seattle will be offloaded at the same pier where it was loaded. The equipment loaded in Morgan City will also be offloaded at Seattle. At this time the vessel will come off charter and depart the United States.

ISSUES:

1. Whether the use of a foreign-flagged vessel to lay cable between coastwise points constitutes a violation of 46 U.S.C. App. ? 883.

2. Whether the unlading of cable-laying equipment by a foreign-flagged cable-laying vessel at a coastwise point other than the one at which it was laded constitutes a violation of 46 U.S.C. App. ? 883.

3. Whether the unlading of foreign-laded excess cable by a foreign-flagged cable-laying vessel at a coastwise point constitutes a violation of 46 U.S.C. App. ? 883.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, ? 883 (46 U.S.C. App. Act"), provides in part, that no merchandise shall 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 vessel other than one that is coastwise-qualified (i.e., U.S.-built, owned and documented). Pursuant to title 19, United States Code, ? 1401(c) (19 U.S.C.?1401(c)), the word "merchandise" is defined as "...goods, wares and chattels of every description, and includes merchandise the importation of which is prohibited."

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.

With respect to the laying of cable, the Customs Service has held that the sole use of a non-coastwise-qualified vessel to lay cable between points in the United States or in international waters does not violate 46 U.S.C. App. ? 883. The rationale for this holding is that such cable is not only laid, and not "transported," between points in the United States, but it is also being used in furtherance of the primary mission of the cable-laying vessel and is therefore similar to vessel equipment. (Customs ruling letter 110402, dated April 18, 1989)

As noted above, vessel equipment is not included within the general meaning of merchandise for purposes of 46 U.S.C. App. ? 883. Vessel equipment has been defined as articles, "...necessary and appropriate for the navigation, operation or maintenance of the vessel and for the comfort and safety of the persons on board." (Treasury Decision (T.D.) 49815(4), dated March 13, 1939) Customs has specifically ruled that, "Vessel equipment placed aboard a
vessel at one United States port may be removed from the vessel at another United States port at a later date without violation of the coastwise laws." (Customs ruling letter 102945, dated November 8, 1978) Decisions as to whether a given article comes within the definition of "vessel equipment" are made on a case-by-case basis.

In regard to equipment used by a cable-laying vessel during the course of a cable-laying operation, Customs has held that such equipment may be laden on a vessel at a coastwise point and used by the vessel for reasons relating to the operation of the vessel may later be unladen at a second coastwise point without violation of 46 U.S.C. App. ? 883. Such equipment is not only "vessel equipment" as defined above, its use aboard the vessel between United States points is considered to break the continuity of the transportation between coastwise points. (Customs ruling letters 109054, dated August 4, 1987)

As for the excess cable in question, since it was laded foreign (South Hampton, England), the fact that it is to be unladed at a coastwise point (Skagway, Alaska) is of no consequence for purposes of this ruling. There is no coastwise movement, consequently no violation of 46 U.S.C. App. ? 883 would arise as a result of its being unladed at Skagway.

HOLDINGS:

1. The use of a foreign-flagged vessel to lay cable between coastwise points does not constitute a violation of 46 U.S.C. App. ? 883.

2. The unlading of cable-laying equipment by a foreign-flagged cable-laying vessel at a coastwise port other than the one at which it was laded does not constitute a violation of 46 U.S.C. App. ? 883.

3. The unlading of foreign-laded excess cable by a foreign-flagged cable-laying vessel at a coastwise point does not constitute a violation of 46 U.S.C. App. ? 883.

Sincerely,

Jerry Laderberg

Previous Ruling Next Ruling