HQ 116268 - 46 U.S.C. App. 883; 46 U.S.C. 12101(a)(1); Transportation of Fish; Coastwise Trade; Fisheries - United States International Trade Commision Rulings

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HQ 116268

July 14, 2004

VES-3-6/3-23/7-1 RR:IT:EC 116268 GOB

CATEGORY: CARRIER

William H. Welte, Esq.
Welte & Welte, P.A.
13 Wood Street
Camden, ME 04843-2036

RE: 46 U.S.C. App. 883; 46 U.S.C. 12101(a)(1); Transportation of Fish; Coastwise Trade; Fisheries

Dear Mr. Welte:

This letter is in response to your letter of July 8, 2004 on behalf of Drisko Lobster, Inc.

FACTS:

You state in pertinent part as follows:

Our client operates two Canadian-built, Maine State registered vessels of under five net tons in a lobster buying business. Specifically, the vessels transport lobsters from outlying Maine Islands to the Port of Rockland, Maine. The vessels do not catch the lobsters they transport. . . .

The F/V LOBSTAR and the F/V SARA BELLE are engaged in the fisheries as defined in 46 U.S.C. 12101(a). Since they are foreign-built, regardless of their tonnage they are not eligible for documentation for the fisheries under 46 U.S.C. 12108. They are less than 5 net tons, equipped with propulsion equipment, and numbered pursuant to 46 U.S.C. 12301 et seq. Thus, they are considered vessels of the United States pursuant to 16 U.S.C. 1802(31)(B) and may engage in the fisheries provided they are owned by United States citizens or resident aliens. They are so owned. . . .
There is nothing in 46 U.S.C. 12101(a) requiring that the transportation referred to be incidental to the catching of the shellfish. [Footnote omitted.] Since the vessels here are transporting shellfish (lobster) they are engaged in the fisheries and are not violating the Jones Act’s coastwise trade provisions regarding
foreign-built vessels. 46 U.S.C. 12101(a), on its face, provides the required exception. [Footnote omitted.]

ISSUE:

Whether the transportation described above constitutes an engagement in the fisheries within the meaning of 46 U.S.C. 12101(a) or the coastwise transportation of merchandise pursuant to 46 U.S.C. App. 883?

LAW AND ANALYSIS:

Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. A vessel that is built in, documented under the laws of, and owned by citizens of the United States, and which obtains a coastwise endorsement from the U.S. Coast Guard, is referred to as "coastwise-qualified."

The coastwise laws generally apply to points in the territorial sea, which 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.

Title 46, United States Code Appendix, §883 (46 U.S.C. App. 883), the coastwise merchandise statute often called the “Jones Act”, provides in part that no merchandise shall be transported 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 vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States.

Section 4.80b(a), CBP Regulations (19 CFR 4.80b(a)) provides, in pertinent part:

A coastwise transportation of merchandise takes place, within the meaning of the coastwise laws, 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.

Title 19, United States Code, §1401(c) (19 U.S.C. 1401(c)) defines “merchandise,” in pertinent part, as follows: “goods, wares, and chattels of every description...”

Title 46, United States Code, § 12101(a)(1) (46 U.S.C. 12101(a)(1)) provides:

In this chapter-

“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.

You cite the following language of HQ 111615 dated May 8, 1991:

If its activities in this fishing operation go beyond a net cleaning and repair facility to include those activities listed in 46 U.S.C. 12101(a), it is engaged in the fisheries and, regardless of its tonnage, since it is foreign-built it is not eligible for documentation for the fisheries under 46 U.S.C. 12108(a). If, however, it is numbered pursuant to 46 U.S.C. 12301 et seq. it is considered a vessel of the United States pursuant to 16 U.S.C. 1802(31)(B) and may engage in the fisheries provided it is owned by United States citizens or by resident aliens. [Your emphasis.]

In one of the footnotes in your letter you state:

Drisko is aware of HQ 112849 holding that the transportation of fish is a movement within the coastwise trade requiring an unrestricted endorsement. However, that decision is inapposite to this issue given that the vessels here are under five net tons and cannot be documented, let alone endorsed.

In HQ 112849 dated September 24, 1993, we stated in pertinent part as follows:

The Commercial Fishing Industry Vessel Anti-Reflagging Act of 1987 (the “Act”, Pub. L. 100-239; 101 Stat. 1778) amended 46 U.S.C. 12101 (6) by changing the definition of “fisheries” 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. . . . . . .
The legislative history of the Anti-Reflagging Act of 1987 indicates that one of the purposes of its enactment was to reconcile differences between United States fisheries laws and maritime law . . . The aforementioned reconciliation, however, cannot be construed as a means of superseding or overriding the coastwise laws. It should be noted that Customs, in rulings involving the coastwise laws (specifically 46 U.S.C. App. 883), has stated that there is no transportation in violation of section 883 unless there is both a lading and an unlading at a coastwise point . . . The clear language of section 883, which contains no provision excluding proprietary property from its application, contemplates both a lading at a coastwise point and an unlading at a coastwise
point. The definition of “fisheries” in 46 U.S.C. 12101(a)(1) includes the transportation of fish in the EEZ and the navigable waters of the United States. It does not refer to a coastwise movement, merely a transportation.

Accordingly, with the exception of a catching vessel transporting its own catch, and any incidental movement of an anchored vessel due to tides, high seas, etc., the transportation by a vessel of fish and fish products from their point of lading in the U.S. territorial sea to their point of unlading at another coastwise point constitutes coastwise trade pursuant to 46 U.S.C. App. 883. Vessels engaged in this activity would be required to have both a fishery endorsement and a coastwise endorsement . . . . [All emphasis supplied.]

In HQ 111615, excerpted above, we also stated:

With regard to vessels of less than 5 net tons, Customs has long held that such vessels, if owned by United States citizens or by resident aliens, may engage in the fisheries even if foreign-built (see e.g., Treasury Division (T.D.) 56382 (6)).

T.D. 56382 (6) was decided on February 26, 1965, which preceded the amendment of the definition of “fisheries” by the Anti-Reflagging Act of 1987 to include the “processing, storing and transporting (except in foreign commerce)” of fish. Thus, we believe it is clear that T.D. 56382 (6) did not contemplate the transportation of fish in a manner as proposed by Drisko Lobster, i.e., the transportation of fish from one coastwise point to a second coastwise point by a vessel other than the catching vessel.

It is our view that “transportation,” as used in 46 U.S.C. 12101(a), contemplates transportation by the catching vessel. It does not contemplate transportation by a non-catching vessel in the manner proposed by Drisko Lobster. Therefore, we find that the subject vessels are not engaged in the fisheries within the meaning of 46 U.S.C. 12101(a). The transportation engaged in by Drisko Lobster, with the lobster laden on the vessels in outlying Maine islands and unladen in Rockland, Maine, is a coastwise movement of merchandise which is subject to 46 U.S.C. App. 883.

Our determinations are consistent with HQ 112849, excerpted above. They are also consistent with Memorandum 115701 dated June 24, 2002, wherein we stated:

In regard to the facts presented for our consideration, it is undisputed that the foreign-built [vessel] laded merchandise (i.e., fish) at one coastwise point (Nantucket Island) and transported it to another coastwise point (New Bedford)
where it was unladed. This activity took place while the vessel was employed solely in its capacity as a transport vessel, not as a fishing vessel . . . This is clearly a violation of the Jones Act and, as noted above, pursuant to §4.80(a)(2), the fact that the subject vessel’s tonnage exempts it from documentation by the Coast Guard does not obviate the provisions of that statute. [Emphasis supplied.]

Our determinations are also consistent with the following: Customs Service Decision (C.S.D.) 89-85 (HQ 110141 dated April 5, 1989; “. . . a vessel which both harvests the aquatic plants and transports them to a disposal point on the shore is engaged in the fisheries within the meaning of 46 U.S.C. 12101(a)(1).”); and HQ Letter 111760 dated October 23, 1991 (“. . . with the exception of a catching vessel transporting its own catch, and any incidental movement of an anchored vessel due to tides, high seas, etc., the transportation by a vessel of fish and fish products from their point of lading in the U.S. territorial sea to their point of unlading within the U.S. territorial sea constitutes coastwise trade pursuant to 46 U.S.C. App. 883.”)

It is our position that vessels of less than five net tons must be U.S.-built and U.S.-owned in order to engage in coastwise transportation. Accordingly, the F/V LOBSTAR and the F/V SARA BELLE, which are foreign-built, are not qualified to engage in coastwise transportation and are not qualified to transport fish from one coastwise point to a second coastwise point.

HOLDING:

The transportation described in the FACTS section of this ruling (i.e., the transportation of lobsters from outlying Maine Islands to Rockport, Maine) is not an engagement in the fisheries within the meaning of 46 U.S.C. 12101(a)(1). Such transportation constitutes the coastwise transportation of merchandise within the meaning of 46 U.S.C. App. 883. Therefore, it may only be accomplished only by vessels which possess a coastwise endorsement or vessels of less than five net tons which are U.S.-built and U.S.-owned. The F/V LOBSTAR and the F/V SARA BELLE, which are foreign-built, are not eligible for the coastwise trade.

Sincerely,

Glen E. Vereb,
Chief,

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