VES-3-15/16-CO:R:P:C 111126 GV
Mr. Mike Bletsch
Bletsch Steamship Company
1314 Texas Ave., Suite 1306
Houston, Texas 77002
RE: Coastwise Trade; Pipe-laying; Towing; OCS; 46 U.S.C. App.
883; 46 U.S.C. App. 316(a); 43 U.S.C. 1333(a)
Dear Mr. Bletsch:
This is in response to your facsimile transmission dated
June 20, 1990, requesting a ruling regarding a project proposal
of your company. Our ruling is set forth below.
FACTS:
Your company proposes to use a foreign-flag pipe-laying
barge approximately 100 miles off the coast of Louisiana. You
ask four questions regarding this proposed transaction:
1. Is a foreign-flag pipe-laying barge allowed to lay pipe
on the United States outer continental shelf?
2. Do all vessels (crew boats, barges, supply vessels)
transporting personnel or equipment from a U.S. port to the barge
have be U.S.-flag?
3. Can a foreign-flag tug boat be used to tow the barge
during the pipe-laying operation in the Gulf of Mexico and can it
be used for anchor handling purposes for the foreign-flag barge?
4. Would a foreign-flag supply vessel be able to deliver
equipment or supplies direct from foreign to the barge while in
international waters 100 miles offshore Louisiana?
ISSUES:
1. Whether a foreign-flag barge may engage in the laying of
pipe on the United States outer continental shelf without
violating 46 U.S.C. App. 883.
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2. Whether support vessels (crew boats, barges, supply
vessels) transporting personnel or equipment from a U.S. port to
a barge laying pipe on the United State outer continental shelf
must be coastwise-qualified pursuant to 46 U.S.C. App. 289 and
883.
3. Whether a foreign-flag tug boat may be used to tow a
barge during a pipe-laying operation in the Gulf of Mexico and
for anchor handling purposes without violating 46 U.S.C. App.
316(a), 289 and 883.
4. Whether a foreign-flag supply vessel may deliver
equipment or supplies direct from foreign to a pipe-laying barge
in international waters without violating 46 U.S.C. App. 883.
LAW AND ANALYSIS:
Title 46, United States Code Appendix, section 883 (46
U.S.C. App. 883), the coastwise merchandise statute often called
the "Jones Act"), provides in part, 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 a vessel
built in and documented under the laws of the United States and
owned by persons who are citizens of the United States (i.e., a
coastwise-qualified vessel).
Title 46, United States Code Appendix, section 289 (46
U.S.C. App. 289, the passenger coastwise statute), prohibits the
transportation of passengers between points embraced within the
coastwise laws of the United States, either directly or by way of
a foreign port, in a non-coastwise-qualified vessel. Pursuant to
section 4.50(b), Customs Regulations (19 CFR 4.50(b)) a
"passenger" for purposes of section 289 is defined as "any person
carried on a vessel who is not connected with the operation of
such vessel, her navigation, ownership or business."
Title 46, United States Code Appendix, section 316(a) (46
U.S.C. App. 316(a), the coastwise towing statute) prohibits the
use of a non-coastwise-qualified vessel to tow any vessel other
than a vessel in distress, from any point or place embraced
within the coastwise laws of the United States to another such
port or place, or for any part of such towing.
Points embraced within the coastwise laws include all points
within the territorial waters of the United States, including
points within a harbor. The territorial waters of the United
States consist of the territorial sea, defined as the belt, 3
nautical miles wide, adjacent to the coast of the United States
and seaward of the territorial sea baseline.
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Furthermore, section 4(a) of the Outer Continental Shelf
Lands Act of 1953, as amended (43 U.S.C. 1333(a)) (OCSLA),
provides, in part, that the laws of the United States 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 ... to the same
extent as if the outer Continental Shelf were an area of
exclusive Federal jurisdiction within a State."
Under the foregoing provision, we have ruled that the
coastwise laws and other Customs and navigation laws are extended
to mobile oil drilling rigs during the period they are secured to
or submerged onto the seabed of the outer continental shelf
(OCS). We have applied the same principles to drilling
platforms, artificial islands, and similar structures, as well as
devices attached to the seabed of the outer continental shelf for
the purpose of resource exploration operations.
In regard to the first issue under consideration, Customs
has long-held that the use of a vessel solely in laying pipe is
not considered a use in the coastwise trade of the United States,
even when the pipe is laid between two points in the United
States embraced within the coastwise laws. Accordingly, the use
of a foreign-flag barge to lay pipe on the OCS would not violate
46 U.S.C. App. 883.
In regard to the second issue under consideration, in view
of the fact that the barge in question would be used for pipe-
laying purposes and not for the purpose of "exploring for,
developing, or producing resources" from the OCS, it is not
considered "attached" to the seabed as that term is used in the
OCSLA and therefore not a coastwise point. Accordingly, support
vessels transporting personnel or equipment from a U.S. port to
the barge laying pipe on the OCS are not required to be
coastwise-qualified pursuant to 46 U.S.C. App. 289 and 883.
In regard to the third issue under consideration, a foreign-
flag tug may be used to tow the subject barge during the pipe-
laying operation in the Gulf of Mexico provided it does not tow
the barge between two points embraced within the coastwise laws
(see discussion above as to what constitutes a coastwise point
including points attached to the OCS). Furthermore, Customs has
ruled that the use of a foreign-flag tug to move anchors for
vessels, whether the vessels are in territorial waters or waters
over the OCS, does not violate the coastwise laws since anchor
handling is not considered to constitute coastwise trade.
In regard to the fourth issue under consideration, the
coastwise laws would not prohibit a foreign-flag supply vessel
from delivering equipment or supplies direct from foreign to the
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barge (not considered a coastwise point as discussed above) while
in international waters 100 miles offshore Louisiana. We
reiterate, however, that under section 4(a) of the OCSLA, the
Customs and navigation laws, including the coastwise laws, the
laws on entrance and clearance of vessels, and the provisions for
dutiability of merchandise, are extended mobile rigs during the
period they are secured to or submerged onto the seabed of the
OCS (Treasury Decision 54281(1), copy enclosed). Subsequent
rulings applied the same principles to drilling platforms and
production platforms, artificial islands, and other installations
and devices attached to the OCS for any of the requisite
purposes.
HOLDINGS:
1. A foreign-flag barge may engage in the laying of pipe on
the United States outer continental shelf without violating 46
U.S.C. App. 883.
2. Support vessels (crew boats, barges, supply vessels)
transporting personnel or equipment from a U.S. port to a barge
laying pipe on the United States outer continental shelf is not
required to be coastwise-qualified pursuant to 46 U.S.C. App. 289
and 883.
3. A foreign-flag tug boat may be used to tow a barge
during a pipe-laying operation in the Gulf of Mexico provided
the tow is not between two coastwise points, and may be used for
anchor handling purposes, without violating 46 U.S.C. App.
316(a), 289 and 883.
4. A foreign-flag supply vessel may deliver equipment or
supplies direct from foreign to a pipe-laying barge operating in
international waters on the United States outer continental shelf
without violating 46 U.S.C. App. 883.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch
Enclosure