HQ 115886 - Use of a Vessel for deploying cultch materials for constructing oyster habitat/sanctuaries and research; Coastwise Trade; Definition of Fisheries; Cultivation; 46 U.S.C. App. 883, 289, 46 U.S.C. 12101(a)(1); 46 U.S.C. 12108 - United States International Trade Commision Rulings

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HQ 115886

February 10, 2003

VES-1:RR:IT:EC 115886 RSD

CATEGORY: CARRIER

Mr. Craig Hardy
Chief, Resource Enhancement Section
North Carolina Department of Environment and Natural Resources Division of Marine Fisheries
P.O. Box 769
Morehead City, North Carolina 28557

RE: Use of a Vessel for deploying cultch materials for constructing oyster habitat/sanctuaries and research; Coastwise Trade; Definition of Fisheries; Cultivation; 46 U.S.C. App. 883, 289, 46 U.S.C. 12101(a)(1); 46 U.S.C. 12108

Dear Mr. Hardy:

This is in response to your letter dated December 19, 2002, concerning the documentation requirements for a vessel that the North Carolina Department of Marine Fisheries (DMF) has procured. You have enclosed a copy of a letter that Customs issued to the North Carolina Commercial and Sport Fisheries Division on February 9, 1973, regarding the use of vessels for oceanographic research and the distribution of cultch material to establish oyster beds.

FACTS:

The North Carolina DMF has procured a 1600 Class Landing Craft Utility (LCU) from the U.S. Army Reserve Unit in Morehead City, North Carolina. Modern Technologies Corp., an agent for Army TACOM, sold the vessel to the DMF. Previously, for a number of years, the DMF operated two 1400 Class LCUs in its oyster restoration program and artificial reef program. These vessels were used to deploy cultch materials in order to build and enhance oyster habitats and to deploy various materials on permitted artificial reef sites. On February 9, 1973, Customs issued a letter to the North Carolina Commercial and Sport Fisheries Division stating that the two vessels were not engaged in coastwise trade.

DMF intends that the newly obtained 1600 Class LCU will replace the two 1400 Class LCUs. The newly obtained vessel will be the primary platform used to deploy materials for the construction of oyster habit/sanctuaries in the estuarine waters of North Carolina. Artificial reef material deployment will occur in estuarine and near shore ocean waters of North Carolina. The DMF Resource Enhancement Section will operate the vessel and North Carolina State employees will staff it. The vessel will be used for long-term research and habitat enhancement activities. The vessel will not be used to transport materials or passengers for monetary compensation. You request information regarding what is the proper endorsement for this newly procured vessel.

ISSUES:

Whether the coastwise laws at 46 U.S.C. App. § 883 or 46 U.S.C. App. § 289 would be violated when a vessel is used to do oceanographic research and for deploying materials in the construction of oyster habit/sanctuaries.

Whether the use of the vessel as described above constitutes an engagement in "fisheries" as defined in 46 U.S.C. § 12101(a) for which a fisheries endorsement is required pursuant to 46 U.S.C. § 12108.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, § 883 (the merchandise coastwise law often called the "Jones Act") prohibits the transportation of merchandise between United States coastwise points, either directly or via a foreign port, or for any part of the transportation, in any vessel other 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 (i.e., a coastwise-qualified vessel).

Pursuant to section 4.80b, Customs Regulations (19 CFR § 4.80b), a coastwise transportation of merchandise takes place, within the meaning of the 46 U.S.C. App. 883, when merchandise laden at a point embraced within the coastwise laws ("coastwise point") is unladen at another coastwise point, regardless of the origin or ultimate destination of the merchandise.

In interpreting the coastwise laws, Customs has ruled that a point in United States territorial waters is a point in the United States embraced within the coastwise laws. The territorial waters of the United States consist of the territorial sea, defined as the belt, 3 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.

In addition, Section 289 of title 46 (46 U.S.C. App. § 289), prohibits the transportation of passengers between points in the United States embraced within the coastwise laws, either directly or by way of a foreign port, in a non-coastwise-qualified vessel (see above). We note that for purposes of § 289, "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" (19 CFR § 4.50(b)). In its interpretation of the coastwise laws with regard to the issues under consideration, Customs has long held that the use of a vessel solely to engage in oceanographic research is not considered a use in the coastwise trade (see ruling letters 109344, dated July 6, 1988, and 110399, dated August 23, 1989). We have held that the use of non-coastwise-qualified vessels to engage in oceanographic research, including the transportation of persons participating in such research to, from, and between research sites in United States territorial waters, whether or not the persons participating in the research temporarily leave the vessels at the research sites, would not violate the coastwise laws. Furthermore, we have held that the collection of marine specimens at the research sites and the transportation of those specimens from the research sites to points in the United States would not violate the coastwise laws. Of course, if such a vessel transported between coastwise points, or provided any part of such transportation, any persons other than the vessel crew, persons engaging in oceanographic research and students receiving instruction in such research, or any merchandise other than the usual supplies and equipment necessary for the research and/or research specimens or samples, the coastwise laws would be violated.

This interpretation of the coastwise laws is buttressed by the Act of July 30, 1965 (Pub.L. 89-99; 79 Stat. 424; 46 U.S.C. App. 441-444, often called the Oceanographic Research Vessel Act), as amended, 3 (46 U.S.C. App. 443) of which provides that, "An oceanographic research vessel shall not be deemed to be engaged in trade or commerce." This Act, in defining the term "oceanographic research vessel," defines oceanographic research as "...including, but not limited to, such studies pertaining to the sea as seismic, gravity meter and magnetic exploration and other marine geophysical or geological surveys, atmospheric research, and biological research." (46 U.S.C. App. 441(1))

In addition, the transportation of materials to establish and improve state-owned oyster beds and the transportation of persons engaging in that activity would not be considered the transportation of merchandise or passengers between coastwise points. Accordingly, the proposed use of the vessel does not constitute an engagement in coastwise trade within the meaning of 46 U.S.C. App. § 883 for which a coastwise endorsement is required pursuant to 46 U.S.C. § 12106. Therefore, the holding in the February 9, 1973, letter that Customs issued to your office would still represent the position of the Customs Service with regard to the issue of whether the vessel would be engaged in coastwise trade.

While the proposed use of the vessel will not constitute an engagement in coastwise trade, because of a statutory change regarding fisheries which was enacted subsequent to 1973, a second issue concerning whether the vessel would be engaging in fisheries must be considered. In 1987, Congress adopted a new statute regarding the use of vessels employed in fisheries known as The Commercial Fishing Industry Vessel Anti-Reflagging Act of 1987 (the "Act", Pub. L. 100-239; 101 Stat. 1778). This statutory change amended 46 U.S.C. 12101(6) by modifying the definition of "fisheries" set forth therein to include the "processing, storing, and transporting (except in foreign commerce)" of fish and related fishery resources in United States navigable waters and the Exclusive Economic Zone (EEZ), as well as the catching-related activities provided for in the former definition. Accordingly, the new definition of fisheries, now set forth in 46 U.S.C. 12101(a)(1) reads as follows:

"fisheries" includes processing, storing, transporting (except in foreign commerce), planting, cultivating, catching, taking, or harvesting fish, shellfish, marine animals, pearls, shells, or marine vegetation in the navigable waters of the United States or in the exclusive economic zone.

The above definition of fisheries supersedes the definition of "fishing" found in section 4.96(a)(5), Customs Regulations (19 CFR 4.96(a)(5)) which included the transportation of marine products by a vessel other than the taking vessel under the complete control and management of a common owner or bareboat charterer. It should be noted that this superseded definition was applicable only to the transportation of marine products taken and transferred on the high seas and did not provide any exception to the coastwise laws.

Title 46, United States Code, section 12108(b) limits the employment in the fisheries to a vessel issued a certificate of documentation with a fishery endorsement, "subject to the laws of the United States regulating the fisheries" (see e.g., 16 U.S.C. 1801, et seq., under which a foreign vessel may obtain a permit from the National Marine Fisheries Service to engage in fishing in the EEZ). Pursuant to 19 U.S.C. 1401(a), the word "vessel" includes every description of watercraft or other contrivance used, or capable of being used, as a means of transportation in water, but does not include aircraft. Under 46 U.S.C. 12108(a), only a vessel eligible for documentation (i.e., over 5 net tons and owned by a citizen) which was built in the United States may be endorsed for the fisheries. Pursuant to 46 U.S.C. 12108(b), subject to the laws of the United States regulating the fisheries, only a vessel so endorsed may engage in the fisheries.

In applying the definition of fisheries found at 46 U.S.C. 12101(a)(1) to determine whether the proposed use of the vessel would constitute an engagement in the fisheries, we note that this definition of fisheries includes the word “cultivating”. The statute does not provide an explanation as to what activities would be considered “cultivating”. Similarly, a review of the legislative history of The Commercial Fishing Industry Vessel Anti-Reflagging Act of 1987, offers no guidance as to what Congress intended when it included the term “cultivating” in the definition of fisheries. Accordingly, in the absence of any indication to the contrary, we believe that we should apply an ordinary understanding or plain meaning of the word “cultivating” to see if it applies to any of the activities for which the vessel will be used. Therefore, we will look to a standard dictionary definition of the word “cultivating” to determine its meaning.

According to WEBSTER’S NEW WORLD DICTIONARY OF THE AMERICAN LANGUAGE, pp. 344-45 (2nd College ed. 1974) the first definition listed for the verb “cultivate” is “to prepare and (soil land etc.) for growing crops; till.” One of the other definitions of the word cultivate provided is “to promote the development or growth of; acquire and develop.”

The use of the vessel for the deployment of materials to construct and prepare the oyster beds and artificial reefs in the near ocean waters of North Carolina would fit within the above definitions of the term “cultivate”. The deploying of materials in the enhancement of oyster habitat/sanctuaries would be preparing the seabed for the growth of oysters, and thus would promote the development or the growth of oysters. Consequently, we conclude that the activity that has been described would be considered as cultivating oysters. Therefore, the proposed use of the vessel to spread materials to construct and prepare oyster beds and artificial reefs would be an engagement in the fisheries under the definition of the 46 U.S.C. 12101(a)(1). Because the proposed use of the vessel would constitute an engagement in a fisheries activity, 46 U.S.C. §12108(b) requires that vessel must obtain a certificate of documentation with a fishery endorsement.

However, it is our understanding that the vessel in question was built in the United States, and since it will be owned by the State of North Carolina, it would be eligible to obtain a fisheries endorsement from the United States Coast Guard. However, we defer to that agency with respect to the qualification to obtain such an endorsement.

HOLDINGS:

The proposed use of the vessel to do oceanographic research and spread materials to build and prepare oyster beds off the North Carolina coast would not constitute coastwise trade and would not violate 46 U.S.C. § App. 883 or 46 U.S.C.§ App. 289. Thus the Customs letter issued to North Carolina Commercial and Sport Fisheries Division on February 9, 1973, remains valid.

The proposed use of the vessel to build and prepare oyster beds would constitute an engagement in the fisheries, under the definition at 46 U.S.C. 12101(a)(1). This means in accordance with 46 U.S.C. 12108, to engage in the proposed activity the vessel must be documented with a fisheries endorsement.

Sincerely,

Glen E. Vereb
Acting Chief
Entry Procedures and Carriers Branch

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