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HQ 115381

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June 15, 2001

VES-10-01-RR:IT:EC 115381 GEV

CATEGORY: CARRIER

Dennis A. Hoffman
Commander
Fourteenth Coast Guard District
PJKK Federal Bldg., Suite 9-216
300 Ala Moana Blvd.
Honolulu, Hawaii 96850-4982

RE: Salvage; Coastwise Trade; Guam; 46 U.S.C. App. §§ 289, 316(d) and 883

Dear Commander Hoffman:

This is in response to your letter dated June 5, 2001, enclosing a letter from an advisor to Pilar Project Limited, requesting an expedited ruling regarding ongoing activities by the M/V WIND CHEETAH within U.S. territorial waters off Guam. Our ruling on this matter is set forth below.

FACTS:

The Pilar Project Limited (PPL) entered into a contract with the Guam Government to conduct underwater surveys in an attempt to locate the sunken 17th century Spanish galleon NUESTRA SENORA DEL PILAR. Since 1990, PPL has used only U.S.-flag vessels to conduct surveys in the waters off Guam. This year it has obtained the services of an Australian-flag vessel, the 16 gross-ton M/V WIND CHEETAH, to conduct a survey within the 3-mile territorial sea off Cocos Island. This vessel is being used as a platform for diving and for operating a remotely operated vehicle (ROV), as well as berthing for the vessel’s crew. As originally intended, the vessel would also have transported 5-6 dive personnel from a pier in Guam to and from the dive site located within the aforementioned territorial sea. The enclosed letter indicates that PPL has modified its operations while awaiting a decision from Customs, in that it is now transporting non-crew support personnel to the dive site on a U.S.-flag vessel, at least temporarily.

ISSUES:

Whether the activities of the M/V WIND CHEETAH constitute “salvage” within the meaning of 46 U.S.C. App. § 316(a).

If the activities of the M/V WIND CHEETAH constitute “salvage” within the meaning of 46 U.S.C. App. § 316(d), are the provisions of that statute applicable to the territorial waters adjacent to Guam?

If the M/V WIND CHEETAH is permitted to conduct salvage operations in the territorial waters adjacent to Guam, does its engagement in the transportation of non-crew workers between the pier and the work site violate 46 U.S.C. App. § 289?

If the M/V WIND CHEETAH is permitted to conduct salvage operations in the territorial waters adjacent to Guam, does its engagement in the transportation of equipment to the work site or in the transportation of treasure trove back to the pier in Guam violate 46 U.S.C. App. § 883.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, § 316(d) (46 U.S.C. App. § 316(d), the salvage statute), provides, in pertinent part:

No foreign vessel shallengage in salvaging operations on thePacific coast of the United StatesProvided, however, that if, on investigation, the Commissioner of Customs is satisfied that no suitable vessel wholly owned by a person who is a citizen of the United States and documented under the laws of the United Statesis available in any particular locality he may authorize the use of a foreign vessel or vessels in salvaging operations in that locality and no penalty shall be incurred for such authorized use.

In regard to the first issue for our consideration (i.e., whether the activities of the subject vessel constitute salvage), we note at the outset that the term “salvage” has been defined as, “The property which has been recovered from a wrecked vessel, or the recovery of the ship herself.” (see de Kerchove’s International Maritime Dictionary, 2d Ed., p. 679, (1961)) Therefore, merely conducting
underwater surveys, prior to locating the sunken galleon and recovering treasure trove, does not constitute “salvage” for purposes of the above-referenced statute.

With respect to recovering treasure trove, it should be noted that in order for a marine operation to constitute “salvage,” according to the law developed in this area (see B.V. Bureau Wijsmuller v. United States, 702 F.2d 333, 337 (1983), in which the history of salvage law is briefly discussed), three elements are necessary. These elements are: “marine peril; service voluntarily rendered, not required by duty or contract; and success in whole or in part, with the service rendered having contributed to the success.” (Wijsmuller, 702 F.2d at 338, citing The Sabine, 101 U.S. 384, 25 L.Ed. 982 (1880)) To quote further from Wijsmuller, 702 F.2d at 338: “[p]eril necessary to give rise to a claim for salvage must be present and impending, although it need not be immediate or absolute. ‘A situation of actual apprehension, though not of actual danger, is sufficient.’ Absent danger, any services rendered a vessel cannot properly be called salvage” (See also Cope v. Vallette Dry-Dock Co., 119 U.S. 625 (1887); Simmons v. The Steamship Jefferson, 215 U.S. 130 (1909); de Kerchove’s International Maritime Dictionary, 2d Ed., 1961, p. 680, and Black’s Law Dictionary, 5th Ed., 1979 p. 1202, 1203)

In Treasure Salvors v. Unidentified Wrecked, etc., 569 F.2d 330 (1978), the court determined that the critical element of marine peril existed in efforts to raise the ATOCHA, a Spanish galleon laden with gold bullion that sank off the Florida Keys in 1622. Notwithstanding the fact that this vessel lay buried beneath sand for over three centuries, the court nonetheless stated that “[e]ven after discovery of the vessel’s location it is still in peril of being lost through the actions of the elements.” Id. at p. 337 (See also Cobb Coin Co., Inc. v. Unidentified Wrecked, Etc., 549 F.Supp. 540, 557 (1982); Platoro Ltd., Inc. v. Unidentified Remains, Etc., 659 F.2d 893, 901 (1983); and Customs ruling letter 103091, dated November 15, 1977)

Accordingly, the actual removal of treasure trove from the sunken Spanish galleon NUESTRA SENORA DEL PILAR meets the requisite elements of salvage provided in the above-cited legal authority and is therefore within the meaning of 46 U.S.C. App. § 316(d).

The second issue for our consideration concerns the applicability of 46 U.S.C. App. § 316(d) to the territorial waters of Guam. At the outset, we note that this statute is distinguished from other navigation laws (see below) in that it enumerates particular parts of the United States
in which it is applicable. Further in this regard, it is a rule of statutory construction that the enumeration of particular things, or in this case, places, excludes other things, or places, not mentioned. The coast of Guam is not, and never has been, enumerated in the salvage statute. It has therefore been our long-standing position that Guam is not a place on the Pacific coast within the meaning of 46 U.S.C. App. § 316(d). (Customs ruling letter 101463, dated January 23, 1975) Consequently, the provisions of 46 U.S.C. App. § 316(d) are not applicable to Guam, and the M/V WIND CHEETAH may therefore engage in the removal of treasure trove (and/or any other activities meeting the criteria of “salvage” as discussed above) in the territorial waters adjacent to Guam without violating that statute.

The third issue pertaining to the transportation of non-crew workers to and from the pier to the work site is governed by the Act of June 19, 1886, as amended (24 Stat. 81; 46 U.S.C. App. § 289, sometimes called the coastwise passenger law), which 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 laws (including the passenger coastwise law cited above as well as the merchandise coastwise law discussed below) 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.

Pursuant to 46 U.S.C. App. § 877, the coastwise laws are applicable to Guam. However, pursuant to title 46, United States Code, § 12105(b) (46 U.S.C. § 12105(b)), a vessel for which a registry endorsement is issued may be employed in trade with Guam. In this regard, Customs has held, at least since 1939, that foreign-built vessels issued a certificate of documentation endorsed with a
registry endorsement may engage in trade between United States coastwise points and Guam. With regard to the transportation of passengers and merchandise between points within Guam, the Commissioner of Customs informed the Commandant of the Coast Guard by letter dated August 14, 1970 (file no. CR 216.131 G), that since such vessels were permitted to operate between the United States mainland and Guam, there was an equitable basis for holding that they should not be precluded from use in a shorter voyage between two points in Guam. It is therefore Customs position that passengers and merchandise may be transported between United States coastwise points and Guam and between points within Guam on a foreign-built, U.S.-flag vessel.

As we understand the facts presented, the non-crew support personnel (5-6 dive personnel) would be transported aboard the M/V WIND CHEETAH from a pier in Guam to and from the dive site located within U.S. territorial waters where the vessel would be used as a dive platform from which the divers would conduct underwater surveys of the sunken vessel. In view of the fact that the divers are engaged in activities in furtherance of the business of the M/V WIND CHEETAH (a specialized vessel designed to conduct underwater surveys, in this case in an attempt to locate the aforementioned sunken galleon), they have a nexus sufficient for them to be considered other than passengers as that term is defined in 19 CFR § 4.50(b). Consequently, their transportation aboard this vessel within U.S territorial waters off Guam as described herein would not be violative of 46 U.S.C. App. § 289.

The final issue for our review concerns the coastwise law governing the transportation of merchandise. This law, found at § 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,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...

With respect to the term "merchandise" as used in § 883, it is defined as, “goods, wares and chattels of every description, and includes merchandise the importation of which is prohibited.” (19 U.S.C. § 1401(c)). In this regard, Customs has long-held the equipment of a vessel to be considered as other than merchandise for purposes of 46 U.S.C. App. § 883. To that end, 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." (T.D. 49815(4), dated March 13, 1939)

Accordingly, it is readily apparent that the equipment to be transported to the work site by the M/V WIND CHEETAH during the operations described herein is in furtherance of the mission of the vessel operating as a survey/salvage vessel, and is therefore vessel equipment and not “merchandise” for purposes of 46 U.S.C. App. § 883. Assuming, arguendo, that it does constitute merchandise, if it is loaded and unloaded at the same coastwise point and does not come off the vessel at any other coastwise point (e.g., the dive site located within U.S. territorial waters), it is not considered to have been transported in the coastwise trade within the meaning of 46 U.S.C. App. § 883.

With respect to the treasure trove retrieved from the work site, it is clearly “merchandise” for purposes of 46 U.S.C. App. § 883. Consequently, its transportation from that site (its coastwise point of lading) to the pier in Guam (its coastwise point of unlading) aboard the M/V WIND CHEETAH would constitute a violation of 46 U.S.C. App. § 883. This position is reflected in Customs ruling letter 101463, dated January 23, 1975, cited herein. The treasure trove may, however, be transferred from the M/V WIND CHEETAH at the work site to a U.S.-flag vessel (either coastwise or registry endorsed as discussed above) for further transport to the pier in Guam without violating 46 U.S.C. App. § 883.

We note your inquiry as to whether the treasure trove may be imported duty-free into Guam pursuant to 19 U.S.C. § 1310. In view of the fact that Guam is not included as part of the “United States” as that term is defined in 19 U.S.C. § 1401(h), the provisions of 19 U.S.C. § 1310 are inapplicable in this case. However, it should be noted that pursuant to § 7.2(b), Customs Regulations (19 CFR § 7.2(b)), importations into Guam are governed by the customs administration of Guam under the Government of Guam. Consequently, any inquiry pertaining to duty-free treatment of the treasure trove should be directed to the appropriate authorities in Guam

HOLDINGS:

The activities of the M/V WIND CHEETAH regarding the conducting of underwater surveys prior to removing treasure trove do not constitute “salvage” within the meaning of 46 U.S.C. App. § 316(a). The removal of treasure trove would constitute “salvage” within the meaning of that statute.

The provisions of 46 U.S.C. App. § 316(d) are not applicable to the territorial waters adjacent to Guam.

Since the M/V WIND CHEETAH is permitted to conduct salvage operations in the territorial waters adjacent to Guam, its engagement in the transportation of non-crew workers in furtherance of these operations between the pier and the work site does not violate 46 U.S.C. App. § 289 since such workers are sufficiently connected to the business of the vessel so as not to be considered “passengers” as that term is defined in 19 CFR

Since the M/V WIND CHEETAH is permitted to conduct salvage operations in the territorial waters adjacent to Guam, its transportation of equipment to the work site to be used in furtherance of these operations does not violate 46 U.S.C. App. § 883. However, its transportation of treasure trove back from the work site to the pier in Guam does violate 46 U.S.C. App. § 883 and must be accomplished by a U.S.-flag vessel in order to be in compliance with that statute.

Sincerely,

Larry L. Burton
Chief
Entry Procedures and Carriers Branch

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