VES-3-21-CO:R:P:C 109833 LLB
Ms. Jeri L. Jordan
United Texas Corporation
Post Office Box 22763
Houston, Texas 77227
RE: Applicability of the coastwise laws to stationary vessel to
be used as an oil storage facility while anchored next to an
oil well, eight miles off the Coast of Texas
Dear Ms. Jordan:
Reference is made to your letter of October 27, 1988, in
which you request that we rule upon the proposed use of a non-
coastwise-qualified vessel to act as a stationary oil storage
facility while anchored next to a producing oil well located off
the Texas Coast.
FACTS:
A 326 net ton Honduran-flag tanker vessel the M/T MARK III,
has been purchased for the purpose of anchoring it next to an oil
well owned by the vessel owner. It is planned to "produce oil
into the tanker for storage" from the adjacent well which is
located eight miles off the Coast of Texas. For the purpose of
this ruling it is assumed that the stored oil will be removed and
transported to either foreign or domestic ports by other vessels.
ISSUE:
Whether the coastwise laws are violated when a non-
coastwise-qualified tanker vessel is anchored next to, and
receives oil for purpose of storage from, a producing oil well
located eight miles off the Texas Coast.
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LAW AND ANALYSIS:
Title 46, United States Code App., section 883 (46 U.S.C.
App. 883) in pertinent part, prohibits the transportation of
merchandise 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 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(a) of the Outer Continental Shelf Lands Act of
1953, as amended (43 U.S.C. 1333(a)) (OCSLA), provides, in
pertinent part, that the laws of the U.S. are:
... extended to the subsoil and seabed of the outer
Continental Shelf and to all artificial islands, and all
installations and other devices permanently or temporarily
attached to the seabed, which may be erected thereon for
the purpose of exploring for, developing, or producing
resources therefrom, or any such installation or other
device (other than a ship or vessel) for the purpose of
transporting such resources, to the same extent as if the
outer Continental Shelf were an area of exclusive Federal
jurisdiction located within a State...
The Customs Service consistently has held that the use of a
foreign-flag vessel as a storage facility does not violate the
coastwise laws, or any other law administered by the Customs
Service, provided that the vessel remains stationary. Customs
also has held that if the vessel is being loaded or unloaded and
must be moved to another location because of stress of weather or
other reason involving the vessel's safety, subsequently is
returned to the same point to continue its loading or unloading,
and loads or unloads no merchandise at any other point in the
United States, the coastwise laws are not violated.
Although the vessel will not be engaging in coastwise trade
while in operation as a stationary storage facility, the point
should be made that by virtue of its being anchored next to and
receiving petroleum products from an oil well located on the
outer Continental Shelf, the vessel itself will become a
coastwise point through operation of the OCSLA. The practical
effect of this fact is that any vessel moving merchandise
(including oil products) or passengers between the storage vessel
and another coastwise point (in either direction), must itself be
documented for the coastwise trade.
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HOLDING:
The use of a stationary non-coastwise-qualified storage
vessel does not violate the coastwise laws administered by the
Customs Service.
Sincerely,
B. J. Fritz
Chief
Carrier Rulings Branch
LBURTON:ga: 11/23/88