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HQ 115823




October 28, 2002

VES-10-02-RR:IT:EC 115823 GEV

CATEGORY: CARRIER

Charles A. Patrizia, Esq.
Paul, Hastings, Janofsky & Walker LLP
1299 Pennsylvania Avenue, NW
10th Floor
Washington, D.C. 20004-2400

RE: Dredging; 46 U.S.C. App. § 292

Dear Mr. Patrizia:

This is in response to your letter dated October 14, 2002, with supporting documentation, on behalf of your client, [ ] and its members (“the Company”), requesting a ruling regarding a pipelaying/burial project. Our ruling on this matter is set forth below.

FACTS:

The Company is a foreign pipelay and subsea construction company that operates specialized vessels designed in-house to lay pipe and perform other specialized tasks. It has contracted a pipeline installation project that includes, amongst other installation work, the installation of approximately 14.2 miles of 18-inch pipe in the Gulf of Mexico off the United States, including connecting the offshore pipeline to production platforms. Approximately 2.98 miles of the project is located within the territorial waters of the United States.

The Company proposes using foreign-flagged, foreign-built vessels for this project. One vessel, the LORELAY, will lay pipe on the seabed surface starting in 33 feet of water and proceeding beyond the territorial waters of the United States.

To comply with U.S. requirements regarding pipelines, however, the pipeline must be buried. Moreover, quality and safety requirements, and the specific contract documents for the proposed activity, dictate that the pipeline must undergo comprehensive hydrostatic testing
before burial takes place. Accordingly, the process of laying the pipe and burying the pipe will not take place at the same time. These activities are part of the same process, however, and are all phases of a single, overall operation.

For the purposes of the requested ruling, the company proposes to use a separate vessel, the [ ], to bury the pipe at depth. The [ ] is a foreign-built, Panamanian-flagged vessel which has a Dynamic Positioning System and is equipped with and will use a burial tool with a variety of capabilities in this operation. It will be used such that it will temporarily displace the seabed sediment and then bury the top of the pipeline to a level at least three feet beneath the seabed. The burial tool is a self-propelled, remotely operated vehicle called the “Digging Donald” that is attached to the [ ] with appropriate tethering and communications cables. The Digging Donald locates and follows the previously installed pipeline on the sea floor. Although the Digging Donald is equipped with tracks for sea floor contact, in this case the soil conditions require that part of the weight be held by a crane on the [ ] during the activity, resulting in the Digging Donald “floating” above the seabed. Another feature of the Digging Donald is that it will not touch the newly installed pipeline, thereby minimizing the risk of damage to it.

The Digging Donald is equipped with a water jet system to be used on this project. The nozzles have a minimum setting of 57”, but are otherwise adjustable to allow for fluidization of the sediment. The fluidization occurs because the water jets are directed underneath the Digging Donald. The force of the jets loosens the soil, brings it into suspension, and loosens the material underneath the pipeline, which was installed, flooded, and hydrostatically tested prior to the burying operation.

The seabed at the location of the proposed activity is composed of very soft, olive-gray silty clay, and it is too soft to handle mechanical excavation. The use of the water-jets and the resulting emulsification process creates an effect of displacing the sediment temporarily. The actual weight of the pipe causes the pipeline to sink through the fluidized soil to the desired minimum depth. When the sediment falls out of suspension, the vast majority of it will settle back around the pipeline, thereby burying it, and the sea currents will completely restore the seabed to its natural, original state. What little sediment falls to either side of the buried pipeline will be disbursed with the natural flow of the sea currents. The seabed will be restored to its
natural state at a minimum within several hours and, almost assuredly, within several days. The process does not require any backfill procedure, and there is no mechanical excavation or side-casting of seabed material.

ISSUE:

Whether the use in United States territorial waters of a cable burial device as described in the FACTS portion of this ruling is an engagement in dredging for purposes of 46 U.S.C. App. § 292.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, § 292 (46 U.S.C. App. § 292, the coastwise dredging statute), provides that with one exception not herein applicable, vessels may dredge in the navigable waters of the United States only if they meet the requirements of 46 U.S.C. App. § 883 (i.e., built in and documented under the laws of the United States and owned by persons who are citizens of the United States (i.e., a coastwise-qualified vessel)).

Customs has long-held that “dredging” for purposes of 46 U.S.C. App. § 292 is the use of a vessel equipped with excavating machinery in digging up or otherwise removing submarine material. With respect to the use of cable-burial devices employing a jetting action resulting in the emulsification of the seabed surrounding the cable, Customs has also long-held that such an operation does not constitute an engagement in “dredging” for purposes of the aforementioned statute. (see Customs ruling letter 109412, dated March 29, 1988, published as Customs Service Decision (C.S.D.) 88-7; Customs ruling letter 109882, dated December 2, 1988, published as C.S.D. 89-40; and Customs ruling letter 115646, dated August 12, 2002)

Accordingly, in view of the fact that the Digging Donald attached to the [ ] is essentially the same device performing the same function as those discussed in C.S.D.s 88-7 and 89-40, and Customs ruling letter 115646, we reach the same conclusion in this case. The pipeline burial operation under consideration does not constitute dredging for purposes of 46 U.S.C. App. § 292.

HOLDING:

The use in United States territorial waters of a cable burial device described in the FACTS portion of this ruling is not an engagement in dredging for purposes of 46 U.S.C. App. § 292.

Sincerely,

Georgina Grier

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