VES-10-03-CO:R:P:C 110979 LLB
Mr. Fred M. G. Sullivan
President, IMC Corporation
501-2001 Beach Avenue
Vancouver, British Columbia, Canada V6G-173
RE: Oil Tanker Escort Service; Emergency Towing; Oil
Spills; 46 U.S.C. App. 316(a); 46 U.S.C. 883
Dear Mr. Sullivan:
Reference is made to your letters of April 3 and June 5,
1990, in which you request a ruling on the proposed use of a
foreign-flag vessel to provide oil tanker escort and related
services from points originating in Canadian waters and
terminating at United States refinery sites in Washington State,
as well as for the return trip commencing off-shore from the
refinery sites and returning to Canadian waters.
FACTS:
The correspondence under consideration proposes the use of
two named foreign-flag vessels, the PANDORA and the ATLANTIC.
However, in a telephone call of July 6, 1990, to Customs
Headquarters, it was indicated that the PANDORA is no longer
being considered for the service specified in this ruling and
that the ATLANTIC alone is now the subject of this ruling
request.
The vessel ATLANTIC is a deep sea salvage tug boat under
foreign documentation. It is proposed to utilize the vessel to
provide oil tanker escort and 24-hour emergency response
services to include oil spill containment and recovery, fire-
fighting, jet helicopter and remote control rescue services for
aiding over-board survivors in rough seas, and emergency towing
should a tanker experience loss of motive power. It is stated
that the vessel would not engage in the transportation of any
merchandise.
ISSUE:
Whether the provision of oil tanker escort and related
towing, rescue, and oil spill containment/recovery services is
proscribed by any statute or regulation administered by the
Customs Service.
LAW AND ANALYSIS:
Section 4370 of the Revised Statutes, as amended (R.S. 4370;
46 U.S.C. App. 316(a), the coastwise towing statute), prohibits
the towing of any vessel, other than a vessel in distress, by a
vessel not documented under the United States flag to engage in
the coastwise or Great Lakes trade between ports or places in the
United States embraced within the coastwise laws, either directly
or by way of a foreign port or place, or for any part of such
towing, or such towing between points in a harbor of the United
States. The penalties for violation of this prohibition are a
fine of from $250 to $1,000 against the owner and master of the
towing vessel and a further penalty against the towing vessel of
$50 per ton of the towed vessel.
Section 27 of the Act of June 5, 1920, as amended (41 Stat.
999; 46 U.S.C. App. 883, often called the Jones Act), provides,
in pertinent part, that:
No merchandise shall be transported by water, or by
land and water, on penalty of forfeiture of the mer-
chandise (or a monetary amount up to the value thereof
as determined by the Secretary of the Treasury, or the
actual cost of the transportation, whichever is great-
er, to be recovered from any consignor, seller, owner,
importer, consignee, agent, or other person or persons
so transporting or causing said merchandise to 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 transporta-
tion, in any other vessel than a vessel built in and
documented under the laws of the Untied States and
owned by persons who are citizens of the United
States...
Section 883 was recently amended by the Act of June 7, 1988
(Public Law 100-329: 102 Stat). Among other things, Public Law
100-329 added the so-called valueless materials amendment. Under
this provision, the section 883 restriction:
...applies to the transportation of valueless
material or any dredged material regardless
of whether it has commercial value, from a
point or place in the United States or a
point or place on the high seas within the
Exclusive Economic Zone...to another point or
place in the United States or a point or
place on the high seas within that Exclusive
Economic Zone...
In applying the above-cited statutory provisions to the
operations intended in this case, we find that the towing of
vessels in U.S. waters when they are disabled due to engine
failure is considered an aid to a distressed vessel. The statute
(section 316(a)) permits the towing by a foreign-flag vessel in
U.S. waters of a vessel in distress. Further, since it does not
appear from the information provided that it is intended to take
any materials aboard at a U.S. point and to unlade them at
another U.S. point, there would not be any coastwise merchandise
transportation concerns under section 883, at least not in the
conventional sense. This finding is qualified because we do not
know exactly what is contemplated in regard to any proposed oil
spill clean up operations. If it is anticipated that the vessel
would be utilized to either skim to or receive recovered oil in
U.S. waters and unlade that oil at another U.S. point, such a use
would be considered coastwise trade. Such would be the case even
if it were determined that the recovered oil was contaminated
such that it no longer had commercial value, this by virtue of
the 1988 "valueless material" amendment to section 883 discussed
previously. As concerns the escort, rescue, and firefighting
elements of the proposed service, there are no statutes or
regulations administered by Customs which would proscribe such
activities.
All of these findings are predicated upon there being no
contact between the vessel ATLANTIC and any "escorted" tankers
except in the advent of an emergency situation.
HOLDING:
As specified in the law and analysis section of this ruling,
the vessel ATLANTIC may engage in proposed oil tanker escort
services, with the possible exception of oil spill clean up
operations. If such operations entail the skimming or receipt of
recovered oil by the vessel in U.S. waters, any deposit of such
oil at another U.S. point would constitute a violation of 46
U.S.C. App. 883.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch