VES-3-12-CO:R:IT:C 111420 LLB
Mr. William E Armstrong
South Florida Clean Harbors, Inc.
5915 Ponce De Lean Blvd.
Coral Gables, Florida 33146
Re: Oil pollution clean-up vessels; Skimmer-type vessels;
Foreign-built vessels; Importation requirements; Duty
consequences; Coastwise trade; Demonstration; 46 U.S.C.
App. 883
Dear Mr. Armstrong:
This is in reference to your letter of November 28,1990,
concerning the proposed purchase or charter, and use of one or
more foreign-built harbor skimmer type vessels in South Florida.
FACTS:
It is proposed that South Florida Clean Harbors, Inc., a
Florida corporation, either purchase or charter one or more
Italian-built "Pelican"-type harbor skimming vessels. Permission
is sought to "import" the vessels for the purpose of
demonstrating their oil pollution recovery capabilities to local
government officials. It is stressed that the importation would
be temporary only, and that no fees would be charged for the
demonstration services.
ISSUE:
Whether any restrictions exist on the "importation" of a
foreign-built oil skimmer vessel, and what restrictions, if any,
may exist on the use in the United States of such vessels for
demonstration purposes.
LAW AND ANALYSIS:
Generally, 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 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.
The coastwise law pertaining to the transportation of
merchandise, section 27 of the Act of June 5, 1920, as amended
(41 Stat. 999; 46 U.S.C. App. 883, often called the Jones Act),
provides that:
No merchandise shall be transported by water,
or by land and water, on penalty of forfeiture
of the merchandise (or a monetary amount up to
the value thereof as determined by the Secretary
of the Treasury, or the actual cost of the trans-
portation, whichever is greater, to be recovered
from any consignor, seller, owner, importer,
consignee, agent, or other person or persons
so transporting or causing said merchandise to 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 other
vessel 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...
The coastwise laws generally apply to points in the
territorial sea, defined as the belt, three nautical miles wide,
seaward of the territorial sea baseline, and to points located in
the internal waters, landward of the territorial sea baseline, in
cases where the baseline and the coastline differ. These laws
have also been interpreted to apply to transportation between
points within a single harbor.
"Merchandise", as used in section 883, includes any article,
including even materials of no value (see the amendment to
section 883 by the Act of June 7, 1988, Pub. L. 100-329; 102
Stat. 588). Pursuant to section 4.50, Customs Regulations (19
CFR 4.50), a "passenger" for purposes of the coastwise laws is
defined as "any person carried on a vessel who is not connected
with the operation of such vessel, her navigation, ownership, or
business."
It is not stated whether local government officials might be
aboard a vessel which is demonstrating the skimming process.
Customs has previously ruled that the use of a vessel solely for
the purpose of demonstration in which persons who are
transported on demonstration rides embark and disembark at the
same point is not a use in the coastwise trade even if the ride
is entirely within territorial waters. Such persons are not
considered to be passengers for the purposes of the coastwise
laws. However, these rulings have been limited to demonstration
rides originating and terminating at the same point because the
transportation of persons between different points is itself
evidence of a purpose other than the demonstration of a vessel.
This, of course, would not apply to crew members.
The transportation aboard vessels of equipment necessary to
the operation of the transporting vessel would likewise pose no
problem. Such essential equipment is not considered merchandise
under the coastwise laws.
In regard to the removal of surface oil by skimming, it is
our position that the removal of oil from the water constitutes a
lading of merchandise. The deposit of oil at a different point
would constitute an unlading of merchandise. If these
operations occur within the territorial waters, a violation of
the coastwise merchandise statute will have occurred.
The present request for a ruling includes the request for an
authorization to "import" skimmer vessels for demonstration
purposes, free from duty. The special status accorded vessels,
their tackle, apparel, equipment, and appurtenances has long been
recognized, with vessels being considered sui generis and totally
distinct from merchandise. (See The Conqueror, 166 U.S. 110, 17
S. Ct. 510, 41 L. Ed. 937 (1896); United States v. William Herman
Wepner, 32 CCPA 30, C.A.D. 282 (1944)). The requirements for the
entry of merchandise are provided in section 1484 of title 19,
United States Code. Those requirements have no applicability to
commercial vessels, of which skimmer vessels are examples.
Accordingly, there would be no Customs duty requirements should
such vessels be brought to the United States.
HOLDING:
Following a thorough review of the facts and analysis of the
law and applicable precedents, we find that the vessels in
question may engage in demonstration activities in the United
States to the following extent:
1. Persons to whom vessel capabilities are being demonstrated
may be transported from a shore site to a demonstration point and
back to the original shore point to be disembarked, even if the
entire operation occurs within territorial waters.
2. A full-scale operational demonstration may not be undertaken,
in that oil skimmed within territorial waters is deemed to have
been laden in such waters, and when such oil is later deposited,
a violative transportation will have been consummated.
3. A commercial vessel, such a pollution control vessel, may be
brought into the United States without the necessity of paying
any Customs merchandise duties.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch