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 > 2003 HQ Rulings > HQ 115170 - HQ 116013 > HQ 115850

Previous Ruling Next Ruling
HQ 115850

---

November 15, 2002

VES-10-01-RR:IT:EC 115850 GEV

CATEGORY: CARRIER

Jeffrey F. Lawrence, Esq.
Heather M. Spring, Esq.
Sher & Blackwell
1850 M Street, N.W.
Suite 900
Washington, D.C. 20036

RE: Salvage; Outer Continental Shelf; 46 U.S.C. App. § 316(d); 43 U.S.C. § 1333(a)

Dear Ms. Spring and Mr. Lawrence:

This is in response to your letter dated October 25, 2002, on behalf of your client, [ ], requesting a ruling regarding the applicability of 46 U.S.C. App. § 316(d) to the use of a foreign-flag vessel for the removal of remnants of broken jack-up legs that remain attached to the outer continental shelf (“OCS”) following the destruction of a mobile offshore drilling unit [ ]. Our ruling on this matter is set forth below.

FACTS:

The mobile offshore drilling unit [ ] (“ rig”), which is owned and operated by [ ], was hired to drill a new gas well at [ ] on the OCS. The rig was positioned at a site alongside a fixed structure which supports the well conductor pipe at the drilling site. The rig was jacked-up to a position 67 feet above the water level. In order to drill the new well under the support structure, the rig’s drilling equipment cantilevered over the support structure so that the drilling apparatus was positioned over the well conductor pipe above the designated well site. Thus, the rig’s legs stood at a separate location adjacent to, but not directly over the well site.

On or about [ ], the drilling equipment was retracted back onto the rig and secured. The rig and support structure were thereafter no longer connected. All personnel were then evacuated from the rig. [ ] the rig’s hull and the upper portion of its legs were ripped from the lower portion of the legs. The hull and other debris were carried away and sank some distance from the drilling site [ ]. Debris was strewn along the way. Those wrecked components will also need to be removed; however, they are not addressed herein as they have been deposited at an area on the OCS at which there are no wells, rigs, or similar devices erected on the seabed for purposes of exploration, development, or production; hence, they are clearly no longer located at a coastwise point.

The lower sections of the jack-up legs remain embedded in the seabed at or near their original location1

1 The exact location of the buried leg base units is not yet known. Given the nature of the damage, it is possible that one or more of the legs may have shifted in the seabed away from their original location. [ ] on the OCS, but are severely damaged and are leaning at approximate [ ] degree angles to the seabed. Two of the legs are further bent such that the top portions form near [ ] degree angles with the seabed. The pieces of the lower leg sections that remain measure approximately [ ] feet, [ ] feet, and [ ] feet from the base unit to the severed top end. The base units under each leg remain embedded to a depth of [ ] to [ ] feet under the seabed. The leg section remnants have been uncleanly severed, bent, and are severely damaged.

[ ] and the leaseholder of the mineral rights are seeking to remove the destroyed leg sections to the [ ] from the seabed. It is their intention to thereafter bring a new rig to the site to commence drilling operations at the adjacent support structure. [ ] proposes to contract with [ ] to remove the leg debris from the floor of the [ ] using a foreign-flag heavy lift sheer leg crane barge. The leg debris would then be lifted from the floor, the crane barge would pivot with only incidental movement, and the material would be placed directly onto a U.S.-flag, coastwise-qualified barge. As such, there would be no Jones Act implications for this operation. However, because of the proximity of the legs to the well site, [ ] does wish to verify that the proposed debris removal by a foreign-flag crane barge will not violate 46 U.S.C. App. § 316(d).

ISSUE:

Whether the removal of the remnant leg sections of the mobile offshore drilling unit by a foreign-flag vessel as described above constitutes a violation of 46 U.S.C. App. § 316(d).

LAW AND ANALYSIS:

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

No foreign vessel shallengage in salvaging operations in territorial waters 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.

The Customs Regulation promulgated pursuant to 46 U.S.C. App. § 316(d) is found at § 4.97, Customs Regulations (19 CFR § 4.97) and provides, in pertinent part, as follows.

Only a vessel of the United States, a numbered motorboat owned by a citizen, or a vessel operating within the purview of paragraph (d) or (e) [Canadian and Mexican vessels operating pursuant to treaties], shall engage in any salvage operation in territorial waters unless an application addressed to the Commissioner of Customs to use another specified vessel in a completely described operation has been granted.

For purposes of the administration of the navigation laws administered by Customs, including 46 U.S.C. App. § 316(d), the territorial sea 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, in cases where the baseline and the coastline differ.

Furthermore, § 4(a) of the Outer Continental Shelf Lands Act of 1953, as amended (67 Stat. 462; 43 U.S.C. § 1333(a)) (OCSLA), provides, in part, that the laws of the United States are extended to:

... the subsoil and seabed of the outer Continental Shelf and to all artificial islands, and all installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing, or producing resources therefrom ... to the same extent as if the outer Continental Shelf were an area of exclusive Federal jurisdiction within a State.

The statute was substantively amended by the Act of September 18, 1978 (Pub. L. 95-372, Title II, § 203, 92 Stat. 635), to add, among other things, the language concerning temporary attachment to the seabed. The legislative history associated with this amendment is telling, wherein it is stated that:

...It is thus clear that Federal law is to be applicable to all activities or all devices in contact with the seabed for exploration, development, and production. The committee intends that Federal law is, therefore, to be applicable to activities on drilling rigs, and other watercraft, when they are connected to the seabed by drillstring, pipes, or other appurte- nances, on the OCS for exploration, development, or production purposes. [House Report 95-590 on the OCSLA Amendment of 1978, page 128, reproduced at 1978 U.S.C.C.A.N. 1450, 1534.]

Under the foregoing provision, we have ruled that the coastwise laws and other Customs and navigation laws “are extended to mobile oil drilling rigs during the period they are secured to or submerged onto the seabed of the Outer Continental Shelf for drilling operations.” (T.D. 54281(1)). We have applied the same principles to drilling platforms, artificial islands, and similar structures, as well as devices attached to the seabed of the OCS for the purpose of resource exploration operations. (Customs Service Decisions (C.S.D.s) 81-214 and 83-52)

In regard to [ ] proposal, at the time of the removal of the severed leg remnants it is readily apparent that these mangled pieces of debris have no function and are no longer attached to the OCS “for the purpose of exploring for, developing, or producing resources therefrom” Their location is therefore no longer considered to be a
coastwise point pursuant to the provisions of the OCSLA discussed above. Consequently, 46 U.S.C. App. § 316(d) is inapplicable to the operation in question.

HOLDING:

The removal of the remnant leg sections of the mobile offshore drilling unit by a foreign-flag vessel as described above does not constitute a violation of 46 U.S.C. App. § 316(d).

Sincerely,

Georgina Grier

Previous Ruling Next Ruling