HQ H022357 - Vessel Entry; Vessel Clearance; 19 U.S.C. § 1434(a)(4); 46 U.S.C. - United States International Trade Commision Rulings

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HQ H022357

February 12, 2008

VES-5-07-OT:RR:BSTC:CCI H022357 JLB

CATEGORY: CARRIER

Mr. Peter Moerman
Operations Manager
GAC-RUR Shipping
302 West 5th Street, Suite 203
San Pedro, California 90731

RE: Vessel Entry; Vessel Clearance; 19 U.S.C. § 1434(a)(4); 46 U.S.C.

Dear Mr. Moerman:

This letter is in response to your correspondence dated January 24, 2008, in which you request a ruling on whether a U.S.-flagged water-taxi/tugboat, which assists in lightering operations beyond U.S. territorial waters, is subject to vessel entry and clearance requirements and the fees associated with such services. Our ruling on your request follows.

FACTS

A U.S.-flagged water-taxi/tugboat assists foreign-flagged Very Large Crude Carriers (“VLCC”) and shuttle vessels with lightering operations at the Pacific Area Lightering (“PAL”), located approximately thirty miles off the coast of Long Beach, California. The water-taxi/tugboat transports lightering equipment, fenders and personnel from the port of Long Beach, California to the PAL. The personnel then assist in setting up the fenders, which are utilized to provide a necessary buffer during the ship-to-ship transfers. Upon completion of the lightering operations, the water-taxi/tugboat subsequently returns to the Long Beach port with the fenders, equipment and personnel.

ISSUE

Whether a U.S.-flagged water-taxi/tugboat assisting in the operations described above must make formal entry and obtain clearance under 19 U.S.C. § 1434(a)(4) and 46 U.S.C. § 60105(a)(3), respectively?

LAW AND ANALYSIS

The navigation laws administered by U.S. Customs and Border Protection (“CBP”) require that any vessel “which has visited a hovering vessel or has delivered or received merchandise while outside the territorial sea” must immediately make formal entry. See 19 U.S.C. § 1434(a)(4). See also CBP regulation 19 C.F.R. § 4.3.

Additionally, U.S.-flagged vessels must obtain clearance from CBP before proceeding from a port or place in the United States “outside the territorial sea to visit a hovering vessel or to receive merchandise while outside the territorial sea.” See former 46 U.S.C. App. § 91(a)(3) recodified as 46 U.S.C. § 60105(a)(3), pursuant to P.L. 109-304 (October 6, 2006). Similar language is found in 19 C.F.R. § 4.60(a)(4) which provides, in pertinent part, that such vessels must obtain clearance from CBP if “departing for points outside the territorial sea to visit a hovering vessel or to receive merchandise or passengers while outside the territorial sea,.” Pursuant to 19 C.F.R. §§ 4.60(e)(1) and (e)(2), no vessel shall be cleared for the high seas except a vessel “bound to another vessel on the high seas to—(1) transship export merchandise which it has transported from the U.S. to the vessel on the high seas; or (2) receive import merchandise from the vessel on the high seas and transport the merchandise to the U.S. The navigation fees associated with the entry and clearance requirements are assessed pursuant to 19 C.F.R. § 4.98.

The territorial sea 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. Pursuant to 19 U.S.C. § 1401(k)(1), a hovering vessel is “any vessel which is found or kept off the coast of the United States within or without the customs waters, if, from the history, conduct, character or location of the vessel, it is reasonable to believe that such vessel is being used or may be used to introduce or promote or facilitate the introduction or attempted introduction of merchandise into the United States in violation of the laws of the United States.” We assume, for purposes of this ruling, that the subject vessel’s destination in the PAL is not a hovering vessel.

The central issue with regard to whether the subject vessel must make entry and obtain clearance concerns whether there has been a receipt and/or delivery of merchandise while outside of the U.S. territorial sea. Merchandise for purposes of these statutory requirements “means goods, wares, and chattels of every description, and includes merchandise the importation of which is prohibited, and monetary instruments as defined in section 5312 of Title 31.” 19 U.S.C. § 1401(c). However, merchandise does not include the equipment of a vessel which will be used by that vessel. Such articles have been defined as those which are "...necessary and appropriate for the navigation, operation or maintenance of the vessel and for the comfort and safety of the persons on board." See Headquarters Decision 114298, dated July 7, 1998 quoting Treasury Decision (“T.D.”) 49815(4), March 13, 1939. CBP has held that in some circumstances fenders utilized to provide a buffer during lightering operations are vessel equipment as they are used in furtherance of the operation of the vessel as well as for the safety of the crew. See Headquarters Decision 111892, dated September 16, 1991. However, in that case, the fenders were carried and utilized by a vessel actually involved in the lightering operation. In this case, the water-taxi/tugboat will merely be transporting the fenders which will be utilized by the VLCC and shuttle vessels performing the ship-to-ship transfer. Therefore, the fenders do not constitute vessel equipment of the water-taxi/tugboat, nor does the lightering equipment used during operations at the PAL based on the information provided.

In Headquarters Decision 114992, dated March 28, 2000, CBP held that a U.S.-flagged crew boat is not delivering or receiving passengers when it transports a testing crew from a U.S. port to a barge beyond U.S. territorial waters to conduct an anchor test and subsequently returns with the testing crew to the same U.S. port at the conclusion of the test. In the present case, the personnel are being similarly transported on the water-taxi/tugboat to install fenders at a location beyond territorial waters and then are subsequently returning to the same U.S. port aboard the same vessel with the fenders and lightering equipment at the conclusion of the ship-to-ship transfers. Since the water-taxi/tugboat is not visiting a hovering vessel, or delivering or receiving merchandise or passengers while outside the territorial sea as contemplated by the aforementioned authority, it is not required to make formal entry, or obtain clearance when departing or returning from the PAL under this scenario.

HOLDING

The subject vessel, assisting in the operations described above, is not subject to the entry and clearance requirements under 19 U.S.C. § 1434(a)(4), and 46 U.S.C. § 60105(a)(3), respectively. Consequently, it is not required to pay the fees associated with such services.

Sincerely,

Glen E. Vereb, Chief

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