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HQ 114907

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December 23, 1999
VES-3/3-02/3-04-RR:IT:EC 114907 GOB

CATEGORY: CARRIER

Michael J. Kurman, Esq.
Matthew J. McConkey, Esq.
Arent Fox Kintner Plotkin & Kahn, PLLC
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036-5339

RE: 46 U.S.C. App. 289, 883; Coastwise transportation; Stationary parking facility

Dear Messrs. Kurman and McConkey:

This ruling is in response to your letter of December 14, 1999 on behalf of MTP Operating Corp. (“MTP”).

FACTS:

You describe the facts as follows:

MTP, a New York corporation, owns and operates automobile parking facilities in New York City. MTO proposes to procure a newly built, non-self-propelled barge of at least five net tons to be constructed outside of the United States

The following usage (item #1) and movements (items #2 and #3) of the barge are contemplated:

MTP intends to use its barge solely and exclusively as a floating parking facility to be moored at a pier or at a bulkhead along the shore of the Hudson River. Accordingly, the barge would be equipped only with items common and customary for the conduct of the business and operations of a typical automobile parking facility (and, therefore, necessary for the operation of such a facility on the barge). During such usage, the barge would be stationary – tied to the pier structure or bulkhead, with a ramp between ship and shore to provide access to/from parking on the barge for automobiles (whether driven by such automobiles’ owners/operators, or via valet service as part of MTP’s operations).

2. Occasionally, the barge may have to be moved from its mooring solely for purposes of complying with local zoning regulations. Such movements would be for short periods of time during which the barge would not be used as a parking facility. In each such instance, the barge would make no intermediate stops at coastwise points, and would be returned to its original mooring (and to its use as a moored, floating parking facility); at no time during such movements would it transport merchandise or passengers.

3. In addition, the barge might be moved at some future date to another fixed location, again to serve exclusively as a moored parking facility; at no time during such movement would it transport merchandise or passengers.

With regard to the barge movement identified in #3, MTP is aware that such movement of the barge must be performed by a coastwise-qualified vessel. See 46 App. U.S.C.A. § 316(a).

MTP requests a ruling confirming that neither the proposed barge usage nor the contemplated barge movements described above constitute engagement in the coastwise trade, and that use of a non-coastwise-qualified (i.e., foreign-built) barge therefor would not be prohibited by the coastwise laws.

ISSUE:

Whether the proposed activities are prohibited by 46 U.S.C. App. 289 or 883.

LAW AND ANALYSIS:

Statutory and Regulatory Background

Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. A vessel that is built in, documented under the laws of, and owned by citizens of the United States, and which obtains a coastwise endorsement from the U.S. Coast Guard, is referred to as "coastwise-qualified."

The coastwise laws generally apply to points in the territorial sea, which is 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.

46 U.S.C. App. 883, the coastwise merchandise statute often called the AJones 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 a vessel built in, documented under the laws of, and owned by citizens of the United States.

19 U.S.C. 1401(c) defines Amerchandise,@ in pertinent part, as follows: Agoods, wares, and chattels of every description...@

The coastwise law applicable to the carriage of passengers is found in 46 U.S.C. App. 289 and 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.

Section 4.50(b), Customs Regulations (19 CFR 4.50(b)) states as follows:

A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business.

46 U.S.C. App. 316(a) prohibits the use of a non-coastwise-qualified vessel to tow any vessel, other than a vessel in distress, between ports or places in the United States embraced within the coastwise laws, either directly or by way of a foreign port, or to do any part of such towing, or to tow any such vessel between points in a harbor of the United States.

Application of the Coastwise Laws and Regulations to the Stated Facts

The following constitutes our analysis of the coastwise laws within the context of the stated FACTS.

The Customs Service has consistently held that the use of a stationary, moored facility on water is not an engagement in coastwise trade, i.e., it does not involve the transportation of passengers or merchandise. For example, in Ruling 113164 of July 20, 1994, we held that the use of stationary floating garages was not violative of 46 U.S.C. App. 289 or 883.

Accordingly, the activity which you propose in item one of your factual description, above, is not violative of 46 U.S.C. App. 289 or 883.

Additionally, the scenarios described in items two and three of your request, above, do not describe activities which are violative of 46 U.S.C. App. 289 or 883 because you state that the described movements would not involve the transportation of passengers or merchandise, i.e., no passengers or merchandise would be on the facility when it is moved. In this regard, we note that if there are any individuals on the facility while it is moved, such individuals would have to be connected with the operation, navigation, ownership, or business of the vessel in order for them to be considered non-passengers.

We note that you state that you are aware that the movement of the barge described in item three must be performed by a coastwise-qualified vessel per the requirement of 46 U.S.C. App. 316(a).

HOLDING:

As described above, the proposed activities are not prohibited by 46 U.S.C. App. 289 or 883.

Sincerely,

Jerry Laderberg
Chief,

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