VES-3-06/07-CO:R:P:C 111403 GEV
John J. Fay, Jr., Esq.
O'Neil, Eichin, Miller & Breckinridge
One Poydras Plaza, 26th Floor
638 Loyola Avenue
New Orleans, Louisiana 70113
RE: Coastwise Trade; 46 U.S.C. App. 883
Dear Mr. Fay:
This is in reference to your telefax to Mr. William G.
Rosoff, Chief, Entry Rulings Branch, U.S. Customs Service, dated
November 15, 1990, a copy of which was sent to me regarding the
applicability of 46 U.S.C. App. 883. Our ruling on this matter
is set forth below.
FACTS:
A consignment of Paraguayan sugar was loaded aboard the M/V
GOLDEN CHARIOT, a foreign-flag, foreign-built vessel, at Buenos
Aires, Argentina, for carriage to Savannah, Georgia. Upon the
vessel's arrival in Savannah, approximately 790,000 pounds of
sugar was unladed when the importer of record, Savannah Foods &
Industries, Inc., ("Savannah Foods") discovered broken glass
bottles in one of the two cargo holds which carried this
consignment. A single unbroken soft drink bottle was found in
the second of these holds. As a result of these findings,
Savannah Foods refused to take delivery of the remaining sugar
(approximately 8,700 MT) aboard the vessel. The sugar which is
now on the vessel has never been unladed from it and the
approximate 790,000 pounds, which had been discharged, have not
been reloaded, but have been retained by Savannah Foods or
destroyed. Consequently, all cargo presently on the vessel is
sugar that was originally laded at Buenos Aires.
As a result of Savannah Foods' rejection of this sugar, your
client, Cargill Incorporated, and its insurer have been forced to
locate another buyer for the portion of the consignment remaining
on the vessel. In all likelihood the vessel will be directed to
Reserve, Louisiana, or another U.S. port. In addition to the
Customs entry requirements within the purview of Mr. Rosoff's
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branch, you inquire as to whether the diversion of the sugar
remaining on board the subject vessel from Savannah to another
U.S. port constitutes a violation of 46 U.S.C. App. 883.
ISSUE:
Whether the transportation of sugar on a foreign-flag,
foreign-built vessel from the foreign port at which it was laded,
to a U.S. port where a portion of the sugar was unladed, and the
subsequent transportation of the sugar remaining on board the
vessel to a different U.S. port where it is unladed constitutes a
violation of 46 U.S.C. App. 883.
LAW AND ANALYSIS:
Title 46, United States Code Appendix, 883 (46 U.S.C. App.
883), the merchandise coastwise law 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 4.80b(a), Customs Regulations (19 CFR
4.80b(a)), a coastwise transportation of merchandise takes place,
within the meaning of the coastwise laws, when merchandise laden
at a point embraced within the coastwise laws ("coastwise point")
is unladen at another coastwise point, regardless of the origin
or ultimate destination of the merchandise.
Points embraced within the coastwise laws discussed above
include all points within the territorial waters of the United
States, including points within a harbor, as well as artificial
islands, installations, and devices permanently or temporarily
attached to the seabed of the outer continental shelf for the
purpose of exploring for, developing or producing resources
therefrom. The territorial seas 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 pursuant to 4.33(a)(1), Customs
Regulations (19 CFR 4.33(a)(1)), a vessel may unlade cargo at an
alternative port of entry to the port of original destination if
it is compelled by any cause to put into the alternative port and
the district director to the port issues a permit for the
unlading of such cargo. In addition, 4.33(c), Customs
Regulations (19 CFR 4.33(c)) provides that after entry, the cargo
declaration of a vessel (Customs Form 1302) of a vessel may be
changed at any time to permit discharge of manifested cargo at
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any domestic port in lieu of any other port shown on the cargo
declaration, if: (1) A written application for the diversion is
made on an amended cargo declaration by the master, owner, or
agent of the vessel to the district director or the port where
the vessel is located, after entry of the vessel at that port;
(2) An amended cargo declaration, under oath, covering the cargo,
which it is desired to divert, is furnished in support of the
application and is filed in such numbers of copies as the
district director shall require for local Customs purposes; and
(3) The certified traveling manifest is not altered or added to
in any way by the master, owner, or agent of the vessel.
In regard to the facts under consideration, the consignment
of sugar was laden at a point not embraced within the coastwise
laws (Buenos Aires) and unladen at points embraced within the
coastwise laws (Savannah and Reserve, Louisiana, or another U.S.
port). Accordingly, notwithstanding the applicable Customs entry
and quota requirements, the transportation of sugar as described
above does not constitute a coastwise movement of merchandise
within the meaning of 46 U.S.C. App. 883.
HOLDING:
The transportation of sugar on a foreign-flag, foreign-built
vessel from the foreign port at which it was laded, to a U.S.
port where a portion of the sugar was unladed, and the subsequent
transportation of the sugar remaining on board the vessel to a
different U.S. port where it is unladed does not constitute a
violation of 46 U.S.C. App. 883.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch