HQ 115940 - Coastwise Trade; Crane Barge; 46 U.S.C. App. § 883 - United States International Trade Commision Rulings

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HQ 115940

April 17, 2003

VES-3-07-RR:IT:EC 115940 CK

CATEGORY: CARRIER

Mr. Richard A. Bunnell
Vice President
Bunnell Foundation, Inc.
3033 N.W. No. River Drive
Miami, FL 33142

RE: Coastwise Trade; Crane Barge; 46 U.S.C. App. § 883

Dear Mr. Bunnell:

This is in response to your letter dated March 12, 2003 regarding the use of a crane barge which bears Panamanian documentation for use in placing coral rock boulders on the ocean bottom in a mitigation project. The ruling you request and the information you seek is set forth below.

FACTS:

You state you would like to use a deck barge, and a heavy deck crane for a mitigation project along the coast of Ft. Lauderdale. The heavy deck crane and corresponding barge for the project bears Panamanian documentation. The project is to place 100,000 tons of coral rock boulders on the ocean bottom in predetermined areas.

The boulders will be purchased in Freeport, Bahamas, and will be transported to the site utilizing ABS load line barges. The barges are to be brought alongside of the crane barge and the crane (which is affixed to its barge in one position) will offload these boulders one by one and place them on the ocean floor. You state that the boulders will not be placed or transported on the crane barge at any time during this project.

You also state that the boulder barges will not be off loaded in any way onto the upland at Ft. Lauderdale, instead, they will come directly to the stationary crane barge on site to be off loaded. Additionally, you state the only movement of the crane barge will be to reposition itself in area for proper unloading. The crane barge will not transport any material to be utilized on this project.

ISSUE:

Whether the use of a Panamanian-flagged crane barge to place coral rock boulders on the ocean floor in U.S. waters as described above is coastwise trade in violation of 46 U.S.C. App. § 883?

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, the Bureau of Customs and Border Protection (CBP) 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, 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.

CBP has long held that the use of a non-coastwise-qualified crane vessel to load and unload cargo or construct or dismantle a marine structure is not coastwise trade and does not violate the coastwise laws, provided, that any movement of merchandise is effected exclusively by the operation of the crane and not by movement of the vessel, except for necessary movement which is incidental to a lifting operation while it is taking place. Thus, such a crane barge could lift merchandise with its crane at one coastwise point, be pivoted while remaining in one location, and put down the merchandise at a place other than that from which it was lifted. The crane barge would be prohibited from lifting merchandise with its crane at one coastwise point, and while the merchandise is suspended from the crane, placing the merchandise at a second coastwise point (see CBP ruling letters VES-3-CO:R:P:C 106351 PH, dated November 1, 1983; VES-3/VES-10-01 CO:R:P:C 108213 PH, dated March 6, 1986; and VES-3-24-RR:IT:EC 115630 GEV, dated March 25, 2002).

In the facts you present, boulders will be purchased in the Bahamas and transported to the site where the stationary crane barge is located to be offloaded and placed on the ocean floor. The barges carrying the boulders will not be off loaded anywhere within the U.S. territory except by the crane barge for placement on the ocean floor. The crane barge will remain stationary except for being repositioned for the proper unloading of the boulders. These facts do not constitute coastwise trade within the meaning of 46 U.S.C. App. § 883 for which the foreign-flagged crane barge is not qualified.

HOLDING:

The use of a Panamanian-flagged crane barge to place coral rock boulders on the ocean floor in U.S. waters as described above does not constitute coastwise trade in violation of 46 U.S.C. App. § 883.

Sincerely,

Glen E. Vereb

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