VES-3/10-03-CO:R:P:C GEV
Lt. Comdr. Edward McCauley
U.S. Coast Guard Headquarters
Documentation Division
2100 Second St., S.W.
Washington, D.C. 20593-0001
RE: Coastwise Trade; Towing; OCS; 46 U.S.C. App. 289, 883; 46
U.S.C. App. 316(a); 43 U.S.C. 1333(a)
Dear Lt. Comdr. McCauley:
This is in reference to your facsimile transmissions of
October 23 and October 25, 1990, transmitting a letter dated
October 19, 1990, from Mr. Karl E. Stansell, Manager, Marine
Operations, Global Marine Drilling Company, Houston, Texas,
regarding their proposed use of Soviet-flag vessels in U.S.
waters. Our ruling on this matter is set forth below.
FACTS:
Global Marine Drilling Company ("Global") of Houston, Texas,
proposes to use Soviet-flag icebreakers in an ice management
support role with a U.S.-flag drill rig in drilling operations in
both the Chukchi Sea and the Beaufort Sea of Alaska. The support
role of these Soviet-flag vessels would include towing a drill
rig from one location to another within U.S. waters.
ISSUES:
1. Whether the use of a foreign-flag vessel to engage in
support activities of a drilling operation in U.S. territorial
waters is prohibited by 46 U.S.C. App. 289, 883.
2. Whether the use of a foreign-flag vessel to tow a drill
rig between locations within U.S. territorial waters is
prohibited by 46 U.S.C. App. 316(a).
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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). 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."
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. (It should be noted
that although Presidential Proclamation 5928 of December 27,
1988, extended the U.S. territorial sea to 12 miles, this
extension is only for international purposes. Thus, Customs
enforcement activities are not altered as a result of the
proclamation.)
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,
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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, in view of
the fact that Global's drill rig would be used for the purpose
of "exploring for, developing, or producing resources" from the
OCS, during such usage it would be considered "attached" to the
seabed as that term is used in the OCSLA and therefore would be a
coastwise point during that time. Vessels transporting
passengers or merchandise from a U.S. port to the drill rig when
it is attached to the seabed of the OCS are required to be
coastwise-qualified. Accordingly, Soviet-flag vessels would be
prohibited from engaging in this type of "support" activity
pursuant to 46 U.S.C. App. 289 and 883.
In regard to the second issue under consideration, a Soviet-
flag vessel would be prohibited from towing a drill rig from one
coastwise point (see discussion above as to what constitutes a
coastwise point including points attached to the OCS) to another
such point, or for any part of such towing.
HOLDINGS:
1. The use of a foreign-flag vessel to engage in support
activities of a drilling operation in U.S. territorial waters is
not prohibited by 46 U.S.C. App. 289, 883, provided such
activities do not include the transportation of passengers or
merchandise between coastwise points.
2. The use of a foreign-flag vessel to tow a drill rig
(other than a drilling rig in distress) between coastwise points,
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or for any part of such towing, is prohibited by 46 U.S.C. App.
316(a).
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch