VES-3/7/10-02-CO:R:P:C 111188 GEV
Hannu Halme
Managing Director
Lannen Engineering
SF-27820 Iso-Vimma, Finland
RE: Watermaster; Dredging; Coastwise Trade; Fisheries; 46 U.S.C.
App. 292, 289, 883, 316(a), 316(d); 46 U.S.C. 12101, 12108
Dear Mr. Halme:
This is in reference to your letters dated July 3 and August
3, 1990, regarding the proposed use of the Watermaster in the
United States. Our ruling on this matter is set forth below.
FACTS:
The Watermaster is a Finnish-built, Finnish-owned,
amphibious, multi-purpose excavator designed to operate in and
around inland waterways such as lakes, ponds, rivers, streams,
canals, settlement ponds, reservoirs, swamps, marshes and other
wetland areas. The Watermaster, with the aid of quickly
changeable attachments, is designed to rehabilitate and maintain
the above waterways by being able to excavate, pump, rake, drill
or hammer, and lift (e.g., logs).
Specifically, the Watermaster performs tasks in three
different areas: environmental management; construction; and
maintenance of waterways for leisure-related activities. In the
area of environmental management, the Watermaster rehabilitates
eutrophic rivers and lakes, and provides landscaping and flood
control. It also performs such technical work as removing
aquatic vegetation and sunken logs, laying underwater pipe and
cable, managing industrial water areas, reservoirs, and special
civil engineering water projects. The Watermaster is also
designed to perform several functions related to maintaining
waterways for leisure activities including: constructing boating
routes; deepening channels and marinas; rehabilitating bathing
beaches; and improving shorelines and banks.
The vessel has a steel frame. Its attachments include a
pump and hoe bucket, discharge pipes, a spout, and excavation
equipment. It is self-propelled by a diesel engine which
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operates a propeller through a transmission. The dimensions of
the Watermaster are as follows: 10.2m in length; 3.2m in width
and 14.1 tons in weight.
In response to a request from Lannen Engineering ("Lannen"),
the Finnish manufacturer, the U.S. Customs Service, by letter
dated May 4, 1990 (CLA-2 CO:R:C:G 084006 VEA) held the
Watermaster to be properly classifiable as a dredger the
navigability of which is subsidiary to its main function, in
heading 8905, subheading 8905.10.00 and subject to a free rate of
duty. The May 4 ruling, however, stated that "the coastwise laws
(i.e., 46 U.S.C. App. 883, 289, 316(a), and 316(d) and the law
prohibiting the use of a foreign-built dredge in the United
States (i.e., 46 U.S.C. App. 292) may affect the permissible use
of the Watermaster." Heeding the advice contained in the May 4
ruling, Lannen contacted the U.S. Customs Service Carrier Rulings
Branch regarding the applicability of the above laws. It is
Lannen's contention that the classification of the Watermaster as
a dredge is a misnomer since their customers are not dredging
contractors but rather earthmoving, pipeline and land reclamation
contractors that need specialized equipment that can perform a
variety of tasks. To illustrate this an updated brochure
depicting the Watermaster was enclosed with Lannen's letter of
July 3, 1990.
ISSUE:
Whether the use of a foreign-built, foreign-owned, multi-
purpose, excavating vessel to preserve, restore, and rehabilitate
inland waterways as described above is prohibited by 46 U.S.C.
App. 883, 289, 292, 316(a) and 316(d).
LAW AND ANALYSIS:
Section 1 of the Act of May 24, 1906 (34 Stat. 204; 46
U.S.C. App. 292), provides that, "a foreign-built dredge shall
not, under penalty of forfeiture, engage in dredging in the
United States unless documented as a vessel of the United
States." The Customs Service has ruled that dredging, for
purposes of 46 U.S.C. App. 292, means the use of a vessel
equipped with excavating machinery in digging up or otherwise
removing submarine material. We have long held that dredging in
United States territorial waters (generally defined as the belt,
3 nautical miles wide, adjacent to the coast of the United States
and seaward of the territorial sea baseline), and certain
dredging on the United States Outer Continental Shelf outside
territorial waters, is dredging in the United States, for
purposes of this statute.
In our interpretation of 46 U.S.C. App. 292, we and our
predecessor in the administration of the navigation laws, the
Bureau of Marine Navigation, have consistently held that, under
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46 U.S.C. App. 292, a foreign-built dredge (except those dredges
named in section 2 of the Act of May 28, 1906; see below) may not
engage in dredging in the United States whether or not documented
as a vessel of the United States. This is so because of the
historical background and legislative history of the Act of May
28, 1906. The provision was enacted as a result of controversy
which arose over the use of foreign-built dredges to repair
damage done by a hurricane at Galveston, Texas, in 1900. At the
time of the enactment of the provision, foreign-built vessels
could not be documented in the United States, unless captured in
war by citizens of the United States and lawfully condemned as
prize or adjudged to be forfeited for a breach of the laws of the
United States (section 4132, Revised Statutes). Thus, at the
time of enactment, the proviso in section 1 of the Act of May 28,
1906, "unless documented as a vessel of the United States," was
by itself, practically meaningless. However, section 2 of the
Act of May 28, 1906, provided:
That the Commissioner of Navigation is hereby
authorized to document as vessels of the United States
the foreign-built dredges Holm, Leviathan, Nereus, and
Triton, owned by American citizens and now under con-
struction abroad for use at Galveston, on which an
American citizen, the contractor at Galveston, has an
option.
Reading both sections together, it is clear that the proviso
in section 1, "unless documented as a vessel of the United
States," refers to the dredges which were authorized and directed
to be documented as vessels of the United States by section 2.
The legislative history of the Act confirms this interpretation
(see Cong. Rec. 7029 (1906)) and, stated above, the Act has
consistently been so interpreted by the agencies responsible for
its administration. Even though a foreign-built dredge may now
be documented as a vessel of the United States (see 46 U.S.C.
12102, 12105), it would be prohibited by 46 U.S.C. App. 292 from
engaging in dredging in the United States.
Thus, in our interpretation of 46 U.S.C. App. 292 we have,
as is proper, considered the statute as a whole and in the
context of the time that it was enacted. The phrase, "unless
documented as a vessel of the United States," makes it clear that
the statute was intended to apply to dredges which are vessels,
as does section 2 of the Act of May 28, 1906, which refers to the
dredges named therein as vessels and dredges. Moreover, we have
consistently applied 46 U.S.C. App. 292 to dredges which are
vessels and are not aware of any application of the statute to a
dredge which is not a vessel. A vessel is defined as including
"...every description of water craft or other contrivance used,
or capable of being used, as a means of transportation in
water..." (19 U.S.C. 1401(a); see also, 1 U.S.C. 3 and 46 U.S.C.
2101(45)). Pursuant to an Opinion of the Attorney General (42
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Op. Atty. Gen., dated August 7, 1963) Customs has considered
dredges to be vessels for purposes of 46 U.S.C. App. 292, even if
they are not self-propelled.
In response to Lannen's contention that the Watermaster is
not a dredge and therefore not subject to the provisions of the
dredging statute (46 U.S.C. App. 292), we note that while the
statute does not define dredging, other sources offer helpful
guidelines. One court stated that:
Dredging is defined as "excavation" by any means
...The word "excavate" is derived from the latin
word meaning to hollow out. Its common, plain
and ordinary meaning is to make a cavity or hole
in, to dig out, hollow out, to remove soil by
digging, scooping out or other means. The
common plain and ordinary meaning of the word
"dredging" is the removal of soil from the
bottom waters by suction or scooping or other
means. Gar-Con Development v. State, 468 So.2d
413 (Fla. App. 1 Dist. 1985).
The International Maritime Dictionary defines a dredge as:
A vessel or floating structure equipped with
excavating machinery, employed in deepening
channels and harbors, and removing submarine
obstructions such as shoals and bars. De
Kerchove, International Maritime Dictionary,
Second Edition (1961), p. 241.
Given the foregoing definition, it is clear that the various
uses of the Watermaster, with the exception of cable and pipe-
laying, drilling/pile driving and harvesting aquatic vegetation,
constitute dredging so as to come within the purview of 46 U.S.C.
App. 292, as discussed above.
Accordingly, the use of the foreign-built Watermaster as a
dredge in the United States is prohibited by 46 U.S.C. App. 292
regardless of whether it is documented as a vessel of the United
States or, as in this case, foreign-owned which would preclude it
from U.S. documentation pursuant to 46 U.S.C. 12102. In the
event that the Watermaster would be constructed in North America
(a possibility stated in your letter of August 3, 1990) you
should know that only construction in the United States, not
Canada as suggested in your letter, would suffice for purposes of
46 U.S.C. App. 292 and the other navigation laws administered by
Customs. The determination as to whether a particular vessel's
construction renders it U.S. built for purposes of the fisheries
and navigation laws, is a function of the U.S. Coast Guard
(USCG). This determination, made by the U.S. Coast Guard for
vessels 5 net tons or greater, is dependent upon whether that
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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). We suggest you contact the USCG regarding this
matter. We note that although the fact that the Watermaster is
Finnish-owned precludes it from being documented as a vessel of
the United States pursuant to 46 U.S.C. 12102, if it is
considered to be U.S.-built as discussed above, its use in the
United States is permitted since the prohibition in section 292
is applicable only to foreign-built dredges.
In regard to the uses of the Watermaster which do not
constitute dredging (i.e., cable and pipe-laying, drilling/pile
driving, and harvesting aquatic vegetation) we note the
following.
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). Pursuant to title 19, United States
Code, section 1401(c) (19 U.S.C. 1401(c)) the word "merchandise"
means goods, wares and chattels of every description and includes
merchandise the importation of which is prohibited. Furthermore,
Public Law 100-329 (102 Stat. 508) amended section 883 to apply
to the transportation of "valueless material..."
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."
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.
In regard to the laying of cable and pipe, Customs has long-
held that the use of a vessel solely in laying cable and pipe is
not considered a use in the coastwise trade of the United States,
even when the cable and pipe are laid between two points in the
United States embraced within the coastwise laws. Accordingly,
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regardless of foreign build or ownership, the Watermaster would
not be prohibited from engaging in this type of activity.
Furthermore, this vessel would not be prohibited from being used
for drilling or pile driving.
The aforementioned May 4, 1990 letter from Customs
referenced 46 U.S.C. App. 316(a) and 316(d). 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. Accordingly, the use of the Watermaster
to tow any vessel, other than a vessel in distress, between two
coastwise points, or for any part of such towing, is prohibited.
Title 46, United States Code Appendix, section 316(d) (46
U.S.C. 316(d)), in pertinent part, prohibits the engagement of a
foreign vessel in salvaging operations on the Atlantic or Pacific
Coast of the United States, or in territorial waters of the
United States on the Gulf of Mexico, except when authorized by
treaty or when the Commissioner of Customs, after investigation,
authorizes the use of a foreign vessel or vessels in the
salvaging operations. For purposes of the navigation laws
administered by Customs, including 46 U.S.C. App. 316(d) a point
in the United States territorial waters (discussed above) is
considered a point within the navigation laws.
In order for a marine operation to constitute "salvage,"
according to the law developed in this area (see B.V. Bureau
Wijsmuller v. United States, 702 F.2d 333, 337 (1983), in which
the history of salvage law is briefly discussed), three elements
are necessary. These elements are: "marine peril; service
voluntarily rendered, not required by duty or contract; and
success in whole or in part, with the service rendered having
contributed to the success." (Wijsmuller, 702 F.2d at 338,
citing The Sabine, 101 U.S. 384, 25 L.Ed. 982 (1880)) To quote
further from Wijsmuller, 702 F.2d at 338: "[p]eril necessary to
give rise to a claim for salvage must be present and impending,
although it need not be immediate or absolute. 'A situation of
actual apprehension, though not of actual danger, is sufficient.'
...Absent danger, any services rendered a vessel cannot properly
be called salvage ..." (See also Cope v. Vallette Dry-Dock Co.,
119 U.S. 625 (1887); Simmons v. The Steamship Jefferson, 215 U.S.
130 (1909); and de Kerchove's International Maritime Dictionary,
2d Ed., 1961, p. 680, defining "Salvage Service.")
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Accordingly, although it does not appear from the literature
submitted that the Watermaster would be used for salvage
operations, its use in such operations would be prohibited by 46
U.S.C. App. 316(d).
We note that other than legislation enacted by Congress to
explicitly exempt a particular vessel from the application of the
navigation laws discussed above, the only other waiver authority
is that contained in the Act of December 27, 1950 (64 Stat.
1120), under which the navigation laws may be waived by the
Secretary of the Treasury in the interest of national defense.
This Act, among other things, directs the granting of a waiver
upon the request of the Secretary of the Defense and permits such
a waiver upon the written recommendation of the head of any other
United States Government agency.
Aside from the applicability of the various navigation laws
discussed above, we note an additional concern not mentioned in
Customs letter of May 4, 1990, pertaining to the use of the
Watermaster in harvesting marine vegetation. In this regard we
note that the Commercial Fishing Industry Vessel Anti-
Reflagging Act of 1987 (the "Act", Pub. L. 100-239; 101 Stat.
1778) amended 46 U.S.C. 12101(6) by changing the definition of
"fisheries" set forth therein to include the "processing,
storing, and transporting (except in foreign commerce)" of fish
and related fishery resources in the United States navigable
waters and the United States Exclusive Economic Zone (EEZ), as
well as the catching-related activities provided for in the
former definition. Accordingly, the new definition of fisheries,
now set forth in 46 U.S.C. 12101(a) reads as follows:
"fisheries" includes processing, storing,
transporting (except in foreign commerce),
planting, cultivating, catching, taking, or
harvesting fish, shellfish, marine animals,
pearls, shells, or marine vegetation in the
navigable waters of the United States or in
the exclusive economic zone. (emphasis added)
The EEZ is defined in Presidential Proclamation 5030 of
March 10, 1983 (48 FR 10605), as extending outward for 200
nautical miles from the baseline from which the territorial sea
is measured.
Title 46, United States Code, section 12108(b) limits the
employment in the fisheries to a vessel issued a certificate of
documentation with a fishery endorsement, "subject to the laws of
the United States regulating the fisheries" (see e.g., the
Magnuson Fishery Conservation and Management Act of 1976 (MFCMA),
16 U.S.C. 1801 et seq., under which a foreign vessel may obtain a
permit from the National Marine Fisheries Service (NMFS) to
engage in fishing in the EEZ). Under 46 U.S.C. 12108(a), only a
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vessel eligible for documentation (i.e., over 5 net tons and
owned by a citizen) which was built in the United States may be
endorsed for the fisheries. Pursuant to 46 U.S.C. 12108(b),
subject to the laws of the United States regulating the
fisheries, only a vessel so endorsed may engage in the fisheries.
Accordingly, it is apparent that the use of the Watermaster
to harvest aquatic vegetation constitutes an engagement in the
fisheries within the meaning of 46 U.S.C. 12101(a)(1). Since it
is foreign-built it is not eligible for documentation in the
fisheries under 46 U.S.C. 12108(a) and therefore cannot engage in
this activity.
It should be noted that the provisions of title 46, United
States Code, relating to the fisheries and navigation laws
administered by Customs, are applicable only to those vessels
engaged in activities in U.S. territorial waters including the
inland navigable waters of the United States and its territories
and possessions. The U.S. Coast Guard determines whether a
particular body of water is deemed to be navigable waters of the
United States in order to ascertain its jurisdiction to enforce
the laws its administers. The U.S. Customs Service, in
ascertaining its own jurisdiction to enforce the laws it
administers, is strongly disposed to follow determinations of the
U.S. Coast Guard in the absence of Federal judicial decisions or
explicit Congressional enactment, although it is not required to
do so.
HOLDINGS:
1. The use of a foreign-built, foreign-owned, multi-purpose
excavating vessel to preserve, restore and rehabilitate inland
waterways recognized as navigable by the U.S. Customs Service as
described above (with the exception of cable and pipe-laying,
drilling/pile driving and harvesting aquatic vegetation)
constitutes dredging and is prohibited by 46 U.S.C. App. 292.
2. The use of a foreign-built, foreign-owned, multi-purpose
excavating vessel to perform cable and pipe-laying and
drilling/pile driving on inland waterways recognized as navigable
by the U.S. Customs Service does not constitute coastwise trade
and therefore is not prohibited by 46 U.S.C. App. 289 and 883.
3. The use of a foreign-built, foreign-owned, multi-purpose
excavating vessel to tow a vessel, other than a vessel in
distress, between two coastwise points on an inland waterway
recognized as navigable by the U.S. Customs Service, or for any
part of such towing, is prohibited by 46 U.S.C. App. 316(a).
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4. The use of a foreign-built, foreign-owned, multi-purpose
excavating vessel for salvage on inland waterways recognized as
navigable by the U.S. Customs Service is prohibited by 46 U.S.C.
App. 316(d).
5. The use of a foreign-built, foreign-owned, multi-purpose
excavating vessel to harvest aquatic vegetation on inland
waterways recognized as navigable by the U.S. Customs Service
constitutes an engagement in the fisheries within the meaning of
46 U.S.C. 12101(a). Such vessel is not eligible for a
certificate of documentation with a fisheries endorsement under
46 U.S.C. 12108(a) and therefore is prohibited from engaging in
such activity.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch