HQ 116694 - 46 U.S.C. App. § 316(d); 19 CFR § 4.97; Salvage - United States International Trade Commision Rulings

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HQ 116694

July 26, 2006

VES-10-01-RR:BSTC:CCI 116694 GOB

CATEGORY: CARRIER

Christopher W. Nicoll, Esq.
Nicoll Black Misenti & Feig
816 Second Avenue
Suite 300
Seattle, WA 98104

RE: 46 U.S.C. App. § 316(d); 19 CFR § 4.97; Salvage

Dear Mr. Nicoll:

This is in response to your letter of July 18, 2006 on behalf of Seaspan International Ltd. Our ruling follows.

FACTS:

You state in pertinent part as follows:

We are writing on behalf of Seaspan International Ltd. (“Seaspan”), a Canadian company, to apply to the Commissioner of Customs under the provisions of 19 C.F.R. Part 4.97 for permission to use Seaspan’s Canadian flagged self-loading log barge, the SEASPAN PHOENIX, in salvaging a vessel, the F/V MILKY WAY, that sunk in U.S. waters off the coast of Washington near Destruction Island. According to the U.S. Coast Guard (“USCG”), the MILKY WAY is currently leaking oil and needs to be removed. It is presently resting at the bottom in a marine sanctuary. . . . Blackledge Diving, Inc, (“BDI”) is the U.S. contractor coordinating the salvage operation. We believe that no suitable U.S.-flagged vessel is available to conduct this salvage operation. . . .
The F/V MILKY WAY sank in about 195 feet of water off the Washington coast near Destruction Island, approximately 35 miles due south from Cape Flattery and the entrance to the Straits of Juan de Fuca. The MILKY WAY is located within a federal marine sanctuary. When it sank the MILKY WAY had 110 gallons of lube oil and 2200 gallons of diesel
on board. A recent survey showed it was upright on the bottom with a slight list to port, resting on the vessel’s port chine. USCG and NOAA officials want the vessel removed because it is leaking fuel and lube oil. The USCG has threatened to impose civil penalties against the vessel owner if he does not take action to remove the pollution threat.

This will be the second effort to salvage the vessel. The first occurred about 6 months ago and was conducted by Global Diving and Salvage, based in Seattle, Washington. They used the derrick barge PACIFIC, owned by General Construction Co. of Poulsbo, Washington. PACIFIC proved unable to raise the vessel in the rough coastal waters and the job was abandoned when winter weather moved in. General Construction is reportedly unwilling to use PACIFIC for a second attempt.

BDI of Long Beach, California either has or is in the process of getting the contract to remove the MILKY WAY. BDI first searched the West Coast of the United States and then conducted a national search for an available vessel with heavy lift capability. . . . The bottom line is that BDI found no available U.S. vessels to conduct this salvage.

The safest, fastest, and surest way to stop the MILKY WAY from discharging pollutants into the marine sanctuary is to remove the vessel. . . . According to BDI’s investigations, when the MILKY WAY was launched it weighed 155 tons. It is presently sitting on its keel on a sandy bottom, resting on a port chine. This will cause bottom suction that will add to the difficulty of the lift to a degree that is difficult to estimate. The PHOENIX is equipped with two sturdy cranes on its deck. BDI believes that the combined lifting capacity of the PHOENIX’ cranes, coupled with their ability to be used in tandem to lift the bow and the stern of the MILKY WAY in varying increments, will enable BDI to overcome the bottom suction and lift the MILKY WAY intact more easily than if carried out as a dead lift using a single derrick crane. The PHOENIX is a self-loading log barge that operates in open conditions along the West Coast of North America from Alaska to California. BDI plans to use the domestic vessel, M/V SILENT LADY, to help rig the MILKY WAY for hoisting and to carry equipment and personnel to the site who will assist in the operation and try to minimize the danger of MILKY WAY discharging additional pollutants. As described by BDI, the salvage plan is complex and accounts for the safety precautions needed to protect the environment and those persons engaged in the salvage.

Seaspan owns and operates the Canadian-flagged SEASPAN PHOENIX (O.N. 0395390), a 397 foot barge. . . . The SEASPAN PHOENIX has two custom built heavy lift cranes rated at approximately 89 tons each with considerable open deck space between the cranes. It is an ocean-going craft designed to withstand and operate in heavy weather and has the lift capacity necessary to safely perform the salvage operation. Moreover, the fact that it has two cranes and that they can safely perform the lift at a desirable boom angle means that the MILKY WAY’s superstructure does not have to be altered to make the lift safely. Use of a derrick barge would likely have resulted in a need to remove parts of the MILKY WAY’s superstructure in order to prevent interference with the boom of a single crane. Seaspan also owns and operates the Canadian-flagged tug vessel SEASPAN COMMODORE, which will tow the PHOENIX to and from the salvage site.

ISSUE:

Whether a foreign-flag vessel may be used for the above-described operation without violating 46 U.S.C. App. § 316(d)?

LAW AND ANALYSIS:

Title 46, United States Code Appendix, Section 316(d) (46 U.S.C. App. §316(d)), sometimes referred to as the salvage statute, provides in pertinent part:

No foreign vessel shall, under penalty of forfeiture, engage in salvaging operations on the Atlantic or Pacific coast of the United States, in any portion of the Great Lakes or their connecting or tributary waters, including any portion of the Saint Lawrence River through which the international boundary line extends, or in territorial waters of the United States on the Gulf of Mexico, except when authorized by a treaty or in accordance with the provisions of section 725 of this title; Provided, however, That if, on investigation, the Commissioner of Customs is satisfied that no suitable vessel wholly owned by a person who is a citizen of the United States and documented under the laws of the United States . . . is available in any particular locality he may authorize the use of a foreign vessel or vessels in salvaging operations in that locality and no penalty shall be incurred for such authorized use.

Section 4.97(a), Customs and Border Protection Regulations (19 CFR § 4.97(a)) provides in pertinent part that:

Only a vessel of the United States . . . shall engage in any salvage operation in territorial waters of the United States unless an application addressed to the Commissioner of Customs to use another specified vessel in a completely described operation has been granted. [Footnote omitted.]

We have contacted the Maritime Administration of the Department of Transportation with respect to your request to use the Canadian-flag SEASPAN PHOENIX for the above-described salvage operation. The Maritime Administration has advised us that there are numerous U.S.-flag vessels which are available and suitable for the proposed operation.

Accordingly, based upon the information provided by the Maritime Administration and based upon the standard provided in 46 U.S.C. App. § 316(d) (“. . . if, on investigation, the Commissioner of Customs is satisfied that no suitable vessel wholly owned by a person who is a citizen of the United States and documented under the laws of the United States . . . is available in any particular locality . . .”), we are not able to grant your request to use the SEASPAN PHOENIX for the subject salvage operation.

We suggest that you contact the Maritime Administration for information with respect to the U.S.-flag vessels which are available and suitable for this salvage operation.

HOLDING:

Pursuant to 46 U.S.C. App. § 316(d), inasmuch as there are U.S.-flag vessels which are available and suitable for the subject salvage operation, we are unable to grant your request to use the Canadian-flag SEASPAN PHOENIX. Its use for this proposal would therefore constitute a violation of that statute.

Sincerely,

Glen E. Vereb
Chief

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