HQ 116680 - 46 U.S.C. App. §§ 289, 292, 316(a), 883; Coastwise Transportation; Crane Barge; Towing; Dredging - United States International Trade Commision Rulings

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HQ 116680

June 29, 2006

VES- 3-RR:BSTC:CCI 116680 GOB

CATEGORY: CARRIER

Bruce A. King, Esq.
Garvey Schubert Barer
Second & Seneca Building
1191 Second Avenue
18th Floor
Seattle, Washington 98101-2939

RE: 46 U.S.C. App. §§ 289, 292, 316(a), 883; Coastwise Transportation; Crane Barge; Towing; Dredging

Dear Mr. King:

This letter is in reply to your submission of June 27, 2006 on behalf of Hayward Baker/Soletanche/Traylor (the “Joint Venture”). Our ruling on this matter is set forth below.

FACTS:

The Joint Venturers are Hayward Baker Inc., Soletranche Inc., and Traylor Bros., Inc. The Joint Venture is not a citizen of the United States for the purposes of the coastwise trade laws.

You describe the pertinent facts as follows:

The Joint Venture has a contract with the San Francisco Bay Area Rapid Transit District (“BART”) to inject stone columns into the subsoil of the San Francisco Bay, by forcing stones into the soft bottom of the bay. The technology employed works as follows: a vibrator-injector hangs from the head of a crawler crane on a barge and is dropped into the bottom of the bay. It burrows down vertically into the subsoil some distance. It is then raised a couple of feet, and it injects stones into the drilled hole below. It then drops into the stones and pushes the stones laterally into the surrounding subsoil. This process is repeated, with the result that the soft subsoil becomes reinforced due to the presence of the stones, which “densifies” the soft subsoil material. Then the vibrator-injector is raised a few more feet in the hole, and the process is repeated. This is repeated at higher levels until, in effect, a reinforced stone column is created in the subsoil. While injecting a stone column the crane barge will remain anchored and will not move, except for incidental jostling movements that may occur due to wave action, the movement of the arm of the crane, or the like. The crane then swivels and the process is repeated. Through this process the subsoil in a particular area is effectively reinforced due to the insertion of several of these stone columns. A global positioning system, with a transponder located at the top of the crane and on the barge from which the crane operates, is used to precisely spot the operation.

The crane barge will be equipped with a hopper to hold the stones, an air compressor, and a pneumatic hose through which stones will be moved from the hopper to the vibrator-injector unit. There will also be two portable work rooms installed on the barge for the surveyors who are responsible for monitoring the position of the crane head and equipment, and for the other workers.

The crane barge will be bareboat chartered to the Joint Venture. The Joint Venture will be the owner or lessee of the crane, vibrator-injector, hopper, compressor, and pneumatic hose that is used on the crane barge. It is currently anticipated that the equipment will be loaded on and unloaded from the crane barge at precisely the same location in the San Francisco Bay. The equipment will remain on the barge for the duration of the project unless it is removed for replacement or repairs.

There will be a supply barge that is used to carry the stone to the crane barge. The supply barge will be documented to engage in the coastwise trade. The supply boat will be bareboat chartered by its third-party owner to a coastwise qualified tugboat company that will move the barge to and from the crane barge under a time charter or other service contract with the Joint Venture. When the supply barge arrives at the project location, the supply barge will be lashed to the crane barge, and a backhoe on the supply barge that will be operated by Joint Venture personnel will transfer stone to the hopper on the crane barge as needed. When the supply barge is out of stone, it will be towed away and will return with a new supply of stone. The Joint Venture will not be a sub-bareboat charterer of the supply barge or tugboats, and Joint Venture personnel will not navigate the supply barge or the tugboats.

The crane barge will move itself around the jobsite by means of adjustments to its anchor cables that will run to at least four anchors. In so doing, the supply barge that is lashed to it will follow along. When the crane barge needs to be moved farther than such winching adjustments will allow, the crane barge and its companion supply barge will be towed by the above-referenced tugboat company. The crane barge’s anchors will be reset with the assistance of the tugboat company, and the entire operation will be repeated as described above.

When the crane barge is moved, whether by means of anchor adjustments or by being towed, none of the stone will be present on board the crane barge or in its equipment.

At various times the crane barge will have the following personnel aboard it:

Joint Venture employees who operate the machinery Employees of the Joint Venture, the Joint Venturers, or affiliates of the Joint Venturers who manage or inspect the Joint Venture’s operations described above Officials from the U.S. Army Corps of Engineers, the Port of Oakland, BART, or other interested state, federal, or local agencies who are inspecting the project Subcontractors who assist in the GPS surveying, or who provide other engineering, consulting, or technical assistance to the project Equipment repair and servicing personnel who are employed by the Joint Venture or third parties[.]

The barges and tugboats that will be employed in the described operations will all have been built in the United States, will be documented for the coastwise trade under U.S. flag pursuant to Chapter 121 of Title 46 of the United States Code (or exempt from documentation as inland barges under 46 C.F.R. § 67.9(c)), and will be towed only by an independent tugboat company that is qualified to engage in the coastwise trade and that will use only tugboats that are qualified to engage in the coastwise trade.

ISSUE:

The applicability of the coastwise laws to the proposed activity.

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. In this letter, we will use the term “territorial waters” to include internal waters and navigable waters of the U.S.

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 . . . either directly or via a foreign port, or for any part of the transportation, in any other vessel 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 . . ."

Section 4.80b(a), Customs and Border Protection (“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 Appendix, § 883 provides that “the term ‘merchandise’ includes valueless material.”

The coastwise law applicable to the carriage of passengers is found in title 46, United States Code Appendix, § 289 (46 U.S.C. App. § 289) and provides that no foreign vessel shall transport passengers between ports or places in the United States either directly or by way of a foreign port. The penalty for violation of 46 U.S.C. App. 289 is $300 for each passenger so transported and landed.

Section 4.50(b), CBP Regulations (19 CFR § 4.50(b)) states as follows:

A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business.

Title 46, United States Code Appendix, § 316(a) (46 U.S.C. App. § 316(a)) prohibits the use of a non-coastwise-qualified vessel to tow any vessel, other than a vessel in distress, between ports or places in the United States embraced within the coastwise laws, either directly or by way of a foreign port, or to do any part of such towing, or to tow any such vessel between points in a harbor of the United States.

Title 46, United States Code Appendix, § 292 (46 U.S.C. App. § 292) provides that only coastwise-qualified vessels may engage in dredging in the navigable waters of the United States.

We have carefully considered the proposed activities and the authorities you have cited in your analysis.

46 U.S.C. App. § 883

The supply barge will be coastwise-qualified. The crane barge will not be coastwise-qualified. You indicate that when the crane barge is moved there will be no stone or other merchandise, other than equipment of the vessel, on board.

In HQ 116111, dated January 30, 2004, we stated as follows:

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, not remain stationary, and while the merchandise is suspended from the crane, placing the merchandise at a second coastwise point. (See, CBP ruling letters 106351, dated November 1, 1983; 108213, dated March 6, 1986; 115630 GEV, dated March 25, 2002; and 115940, dated April 17, 2003).

In the facts you present, a foreign crane barge will be moored in place by four anchors. While the barge remains stationary, its crane will swing its arm to a supply barge lashed to the crane barge in order to pick up boulders which will be placed in the water to create a breakwater. The crane barge, without any rock on board or suspended from its crane, will be moved along the construction line by manipulation of its anchor lines. If further repositioning is needed the movement will be accomplished by a coastwise-qualified tug. The use of the foreign crane barge as described above does not constitute a violation of 46 U.S.C. App. §883.

CBP has long held that neither drilling nor pile driving constitutes coastwise trade or coastwise transportation. See HQ 109817, dated November 14, 1988 and HQ 111412, dated November 28, 1990, respectively. The proposed activity with respect to injection of stone columns is very similar to drilling and pile driving and is governed by the same principle. Therefore, we find that the process involving the injection of stone columns does not constitute coastwise trade or coastwise transportation.

In summary, we find that the engagement in the proposed activity will not result in a violation of 46 U.S.C. App. § 883.

46 U.S.C. App. § 289

You have enumerated the individuals who will at various times be on board the crane vessel. It appears that the presence of these individuals on the crane barge will be directly related to the proposed activities of the crane barge. Therefore, we find that these individuals will not be considered passengers, provided that their presence on the crane barge is directly related to the proposed activities of the crane barge. Because these individuals will not be considered passengers, their transportation on the crane barge will not constitute a violation of 46 U.S.C. App. § 289.

46 U.S.C. App. § 316(a)

You state that: “[t]he barges and tugboats that will be employed in the described operations . . . will be documented for the coastwise trade . . . and will be towed only by an independent tugboat company that is qualified to engage in the coastwise trade and that will use only tugboats that are qualified to engage in the coastwise trade.”

In addition to being towed by a coastwise-qualified tug, the non-coastwise-qualified crane barge will be moved by means of adjustments to its anchor cables that will run to at least four anchors. In such a process, the supply barge that is lashed to the crane barge will move with the crane barge. This process does not constitute towing by the crane barge. See HQ 116111, dated January 30, 2004, and Letter 112541, dated December 3, 1992.

46 U.S.C. App. § 292

We have stated that dredging, for purposes of 46 U.S.C. App. 292, “means the use of a vessel equipped with excavating machinery in digging up or otherwise removing submarine material.” See Ruling 111188 dated September 14, 1990.

The court in Gar-Con Development v. State of Florida, 468 So. 2d 413, 414-415 (Fla. App. 1 Dist. 1985) stated as follows:

Dredging is defined as "excavation" by any means ... The word "excavate" is derived from the latin word meaning to hollow out. Its common, plain and ordinary meaning is to make a cavity or hole in, to dig out, hollow out, to remove soil by digging, scooping out or other means. The common, plain and ordinary meaning of the word "dredging" is the removal of soil from the bottom waters by suction or scooping or other means. The common, plain and ordinary meaning of the term “pile driving” is the driving of a long slender member, usually of timber, steel or reinforced concrete, into the ground to carry a vertical load, to resist a lateral force, or to resist water or other earth pressure. Pile driving has absolutely nothing to do with the excavation or removal of soil or forming a hole or cavity in the ground.

Dredge is defined in The International Maritime Dictionary (De Kerchove, 2nd ed., 1961) as: “A vessel or floating structure equipped with excavating machinery, employed in deepening channels and harbors, and removing submarine obstructions such as shoals and bars.”

We find that the proposed activity does not involve dredging within the meaning of 46 U.S.C. App. 292 in that it does not involve the excavation or removal of submarine material.

HOLDING:

The coastwise laws apply to the proposed activity as described in the Law and Analysis section of this ruling. Based upon the facts as stated, the proposed activity will not involve a violation of the coastwise laws.

Sincerely,

Glen E. Vereb
Chief

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