HQ H020051 - Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b) - United States International Trade Commision Rulings

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HQ H020051

December 4, 2007

VES-3-OT:RR:BSTC:CCI H020051 LLB

CATEGORY: CARRIER

Ms. Carrie Wolfe
National Oceanographic Atmospheric Administration Southern California Marine Institute
820 S. Seaside Avenue
Terminal Island, California 90731

RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b)

Dear Ms. Wolfe:

This is in response to your correspondence of November 21 and 30, 2007, in which you inquire about a “coastwise waiver” for two individuals that will be transported aboard the M/V AL RICKMERS. We are construing your correspondence as a request for a ruling pursuant to 19 C.F.R. § 177.1(d)(1) regarding the applicability of the coastwise and navigation laws to the factual scenario you present in your letter. Our decision follows.

FACTS

The voyage in question involves the transportation of the subject individuals aboard the non-coastwise-qualified M/V AL RICKMERS (the “vessel”) from Oakland, California to Long Beach, California. The individuals are scheduled to embark in Oakland on December 6, 2007, and disembark in Long Beach on December 7, 2007. As part of the National Oceanographic and Atmospheric Administration’s (NOAA) Volunteer Observing Ship program, NOAA uses commercial vessels to carry and operate NOAA’s scientific equipment, and occasionally NOAA’s scientists. The data from the projects are used for marine forecasting, climate modeling, and safety at sea. The shipping companies who take an interest in the foregoing information, you state, “benefit the ships in ways like providing better sea temperatures, improved meteorological information, redundant GPS systems, and improving marine forecasts.” On this particular voyage, you indicate that the individuals will be engaged in removing and maintenance of NOAA equipment aboard the vessel.

ISSUE

Whether the use of a non-coastwise-qualified vessel to transport the subject individuals and equipment, as stated in the FACTS section above, is permissible under the coastwise laws.

LAW and ANALYSIS

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. See 33 C.F.R. § 2.22(a)(2)(2007).

The coastwise law pertaining to the transportation of merchandise, 46 U.S.C. § 55102,

Formerly 46 U.S.C. App. § 883. Recodified by Pub. L. 109-304 (Oct. 6, 2006). often called the Jones Act, provides 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. Pursuant to the regulations promulgated under the authority of 46 U.S.C. § 55102, "[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." 19 C.F.R. § 4.80b(a)(2007).

The coastwise laws also 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. The coastwise law applicable to the carriage of passengers is found in 46 U.S.C. § 55103 Formerly 46 U.S.C. App. § 289. Recodified by Pub. L. 109-304 (Oct. 6, 2006). which provides:

(a) In General. Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not transport passengers between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel- (1) is wholly owned by citizens of the United States for purposes of engaging in coastwise traffic; (2) has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement. (b) Penalty. The penalty for violating subsection (a) is $300 for each passenger transported and landed.

The Customs and Border Protection (“CBP”) Regulations, promulgated under the authority of 46 U.S.C. § 55103, provide:

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

19 C.F.R. § 4.50(b)(2007).
a. Transportation of NOAA’s equipment between coastwise points

As stated above, the Jones Act prohibits the coastwise transportation of merchandise by non-coastwise qualified vessels. Pursuant to 19 U.S.C. § 1401(c), the word “merchandise” is defined as “goods, wares and chattels of every description, and includes merchandise the importation of which is prohibited.” In addition, CBP has also held the equipment of a vessel to be considered as other than merchandise for purposes of that authority. To that end, vessel equipment has been defined as articles, "...necessary and appropriate for the navigation, operation, or maintenance of the vessel and for the comfort and safety of the persons on board." Treas. Dec. 49815(4)(Mar. 13, 1939). In this regard, CBP has held that vessel equipment is not considered “merchandise” for purposes of 46 U.S.C. § 55102 when transported in the vessel on which it is used. See HQ 109236 (Feb. 24, 1988); HQ 108223 (Mar.13, 1986) and HQ 106910 (July 9, 1984).

You state that NOAA’s equipment is transported for the purpose of collecting data for marine forecasting, climate modeling, and safety at sea. Insofar, as such equipment is not necessary for the navigation, operation, or maintenance of the vessel, itself, NOAA’s equipment would not be considered vessel equipment, rather, it would be considered merchandise pursuant to 19 U.S.C. § 1401(c). Therefore, the coastwise transportation of NOAA’s equipment would be in violation of 46 U.S.C. § 55102. We note, however, that equipment, which is used for oceanographic research, that is transported on a vessel engaged solely in oceanographic research, is not coastwise trade. See discussion below.
b. Transportation of NOAA’s scientists between coastwise points

A legal notice published in the June 5, 2002, Customs Bulletin, in precise concert with the protectionist nature of section 46 U.S.C. § 55103, The June 5, 2002, notice was issued under the former codification of § 55103, 46 U.S.C. App. § 289. See n. 1, supra. imposed a circumscribed construction as to the meaning of the term "passenger" under the U.S. coastwise trade laws, including section 55103. Under this strict interpretation of the term “passenger,” as finalized in the June 5, 2002, Customs Bulletin notice, persons transported on a vessel are considered passengers unless they are "directly and substantially" connected with the operation, navigation, ownership or business of that vessel itself. See e.g., HQ 110967 (Apr.12, 1990) (finding that to the effect that persons on commercial (non-pleasure) vessels are considered passengers unless they enjoy some status which ties them "intimately" to the operation, navigation, ownership or business of the vessel itself).

In the present case, you propose to transport the subject individuals to perform maintenance and remove scientific equipment for the purpose of a research project. Specifically, the research project involves collecting data that is used for marine forecasting, climate modeling, and safety at sea. These activities do not connect the individuals directly and substantially with the business, operation, or navigation of the vessel itself. Rather, it appears that the research activity is connected to the operation of all commercial shipping vessels. To the extent that the subject individuals would not be engaging in any shipboard activities while traveling on the foreign vessel between coastwise ports, that would be “directly and substantially” related to the operation or business of the vessel itself, such individuals would be considered passengers within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). See also, HQ H015735 (Aug. 17, 2007) (holding that individual analyzing water samples in commercial shipping lanes aboard foreign commercial vessels for a research project for the Smithsonian Environmental Research Center was a passenger for purposes of 46 U.S.C. § 55103). Therefore, the transportation of these individuals between coastwise ports would be in violation of 46 U.S.C. § 55103.

However, you assert that HQ H010661 (May 4, 2007), is applicable to your ruling request. In HQ H010661, CBP held that the individual transported whom deployed NOAA floats in international waters was not a passenger for purposes of 46 U.S.C. § 55103. In doing so, CBP held in accordance with its long-standing position that use of a vessel solely to engage in oceanographic research is not coastwise trade. See HQ 110399 (Aug. 23, 1989); HQ 109815 (Dec. 5, 1988); and HQ 109344 (July 6, 1988). HQ H010661 is distinguishable from the present case because it does not involve the transportation of merchandise between two coastwise points. Second, no evidence has been provided to support that the subject vessel is being used solely to engage in oceanographic research.

HOLDING

The individuals described in the FACTS section above are “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b) and the equipment transported aboard the vessel is merchandise within the meaning of 19 U.S.C. § 1401(c). Therefore, the coastwise transportation of such individuals and equipment would be in violation of 46 U.S.C. §§ 55103 and 55102, respectively.

Sincerely,

Glen E. Vereb
Chief

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