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HQ 116302

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September 15, 2004

VES-3-06:RR:IT:EC 116302 IDL

CATEGORY: CARRIER

Michael S. Budelmann, Esq.

Bauer, Moynihan & Johnson, LLP

2101 Fourth Avenue
Suite 2400
Seattle, Washington 98121

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

Dear Mr. Budelmann:

This is in response to your letter, dated September 1, 2004, on behalf of your client, Magone Terminals, LLC, regarding use of non-coastwise-qualified barges as part of a stationary dock facility. Our ruling in this matter is set forth below.

FACTS:

Magone Terminals (“Magone”), a limited liability company organized under the laws of Alaska, intends to purchase several steel flat deck barges initially constructed in Canada and currently owned and documented Canadian, and have them towed to Alaska. The barges will thereafter be removed from navigation and used as part of a stationary dock facility. The barges will be permanently moored parallel to shore, and connected to shore and each other by pilings, struts, and ramps. The barges, pilings, struts, and ramps will collectively be operated as a stationary dock facility on which cargo will be loaded, discharged, and temporarily stored while awaiting loading or following discharge.

Vessels calling at the facility will tie to the permanently moored barges. The movement of cargo to and from the facility will be accomplished by forklifts, mobile cranes operating on the barges and ramps and/or vessel cargo handling gear, and not by movement of the barges. While Magone does not presently contemplate having a crane affixed to the barges, it would like to preserve an option to do so. Should a crane be affixed to the barges, the movement of cargo would be accomplished by that crane and/or the foregoing methods. In no event will the movement of cargo be effected by movement of the barges.

ISSUE:

Whether the use of permanently moored, non-coastwise-qualified barges as a stationary dock facility on which cargo will be loaded, discharged, and temporarily stored, as described above, would violate 46 U.S.C. App. § 883?

LAW AND ANALYSIS:

Title 46, United States Code Appendix, § 883 (46 U.S.C. App. § 883, the merchandise coastwise law 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 one that is coastwise-qualified (i.e., U.S.-built, owned and documented). The coastwise laws generally apply to points in 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.

Section 4.80b(a), CBP (U.S. Customs and Border Protection) Regulations (19 CFR § 4.80b(a)), promulgated pursuant to the aforementioned statute, provides, in pertinent part, as follows:

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,”
(Emphasis added)

CBP has consistently held that a non-coastwise-qualified vessel used as a moored facility, or as a crane barge to load and unload cargo, within territorial waters does not engage in the coastwise trade, and consequently, does not violate the coastwise laws, or any other law administered by CBP, 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. HQ 106351 (November 1, 1983); HQ 108213 (March 6, 1986). As such, Magone’s proposed use of the non-coastwise eligible barges, as described above, or use of a crane affixed to such barges, is consistent with the foregoing.

We note that although the vessels under consideration will not be engaging in the coastwise trade while in operation as a stationary construction facility, the vessels will become coastwise points by virtue of their being anchored within U.S. territorial waters. C.S.D. 89-107. Therefore, any vessel transporting merchandise or passengers between the stationary platform and another coastwise point must be documented for the coastwise trade. 46 U.S.C. App. §§ 289, 883.

HOLDING:

Magone’s use of non-coastwise-qualified barges as part of a stationary dock facility, as described above, would not violate 46 U.S.C. App. § 883.

Sincerely,

Glen E. Vereb
Chief

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