VES-3-06-CO:R:P:C 111175 GV
Darrell L. Evans
President
Judd Development Company, Inc.
19627 145 N., Ste. 200
Spring, Texas 77388
RE: Coastwise Trade; Jack-up Derrick Barge; Documentation;
46 U.S.C. App. 289, 883; 46 U.S.C. 12105, 12106
Dear Mr. Evans:
This is in reference to your letter dated July 17, 1990,
enclosing correspondence and information that has been sent to
the U.S. Coast Guard regarding the documentation of the EAGLE I
under the U.S. flag.
FACTS:
Judd Development Company, Inc. ("Juddco"), the operator of
the EAGLE I, on behalf of Riggers Manufacturing Company (the
owner), is requesting that the EAGLE I be documented under the
U.S. flag. The EAGLE I is a 600 ton, heavy lift, jack-up derrick
rig which was originally built in Germany but has undergone
various rebuilding and modification operations (specifications
provided) in the United States. We note that Juddco's letter to
the U.S. Coast Guard, dated June 12, 1990, requests that the
vessel be issued a certificate of documentation with a coastwise
endorsement whereas their letter of July 17,1990, to Customs
requests a certificate of documentation with a registry
endorsement.
ISSUE:
Whether a foreign-built, 600 ton, heavy lift, jack-up
derrick rig that has undergone several rebuilding and
modification operations in the United States may be documented
under the laws of the United States with either a coastwise or
registry endorsement.
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LAW AND ANALYSIS:
Generally, the laws referred to as the coastwise laws (e.g.,
46 U.S.C. App. 289 and 883, and 46 U.S.C. 12106, and 12110)
prohibit the transportation of merchandise or passengers between
points in the United States embraced within the coastwise laws by
any vessel other than a vessel built in, properly documented
under the laws of, and owned by citizens of the United States
(i.e., a coastwise-qualified vessel). 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.
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.
It has long been the position of the Customs Service that
the use of a non-coastwise-qualified crane or derrick vessel to
load and unload cargo or to construct or dismantle a marine
structure is not coastwise trade and does not violate 46 U.S.C.
App. 883, provided, that any movement of merchandise is effected
exclusively by the operation of the crane and not by movement of
the vessel, except for necessary movement which is incidental to
a lifting operation while it is taking place. Movement of
merchandise while it is suspended from a crane on a crane or
derrick vessel, even if such movement is only between two points
within a harbor, which is effected by a movement of the vessel
which is neither necessary nor incidental to the lifting
operation would constitute coastwise transportation of
merchandise within the purview of 46 U.S.C. App. 883.
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Although Customs determines whether an activity constitutes
an engagement in the coastwise trade as discussed above, the
documentation of vessels under the laws of the United States is
solely within the jurisdiction of the U.S. Coast Guard.
Furthermore, in regard to the rebuilding or modification of
foreign-built vessels, it should be noted that whether such work
done to a vessel of 5 net tons or greater is sufficient for it to
be considered coastwise-qualified is also a determination of the
U.S. Coast Guard. This determination is dependent upon whether
that agency considers the vessel to be "built in the United
States" as that term is defined in Section 67.09-3, Coast Guard
Regulations (46 CFR 67.09-3).
Accordingly, whether the EAGLE I could be issued a
certificate of documentation with either a coastwise or registry
endorsement is within the jurisdiction of the U.S. Coast Guard.
We defer to that agency's determination in this matter.
HOLDING:
Whether a foreign-built, 600 ton, heavy lift, jack-up
derrick rig that has undergone several rebuilding and
modification operations in the United States may be documented
under the laws of the United States with either a coastwise or
registry endorsement is within the jurisdiction of the U.S. Coast
Guard.
Sincerely,
B. James Fritz
Chief
Carrier Ruling Branch