VES-7-03-CO:R:IT:C 111630 KVS
Cmmr. D.D. Rome
United States Coast Guard
Commanding Officer
Marine Safety Office
2760 Sherwood Lane
Suite 2A
Juneau, AK 99801-8545
Re: Coastwise trade; fisheries; U.S.-flag fish processor;
exclusive economic zone (EEZ); territorial sea; Nicholson
Act; 46 U.S.C. 12101, 12106, 12108; 46 U.S.C. App. 883.
Dear Commander Rome:
This is in response to your letter dated April 5, 1991,
which requests a ruling regarding the use of U.S.-flag fish
processing vessels.
FACTS:
Your letter seeks a ruling regarding five different
scenarios involving the operation fishing industry vessels off
the coast of Alaska to determine whether the situation involves
coastwise, fisheries or foreign trade. Although each of the
scenarios involves a U.S.-flag fish processing vessel, no
information has been provided regarding vessel's place of build.
Specifically, your letter asks the following questions:
ISSUES:
1). Whether a U.S.-flag fish processor, which anchors within
the three mile limit, brings products on board, processes the
product and then moves to a U.S. port while remaining within the
three mile limit to offload the product is engaged in coastwise
trade.
2). Whether a U.S.-flag fish processor, which anchors within
the three mile limit, brings the product on board, processes the
product and then moves the vessel to a U.S. port but goes beyond
the three mile limit before landing at a U.S. port to offload is
engaged in coastwise trade.
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3). Whether a U.S.-flag fish processor operating beyond the
three mile limit which brings the product on board, moves the
vessel within the three mile limit, processes the product and
then moves the vessel to a U.S. port to offload the product is
engaged in coastwise trade.
4). Whether a U.S.-flag fish processor operating beyond the
three mile limit which brings the product on board, processes the
product while remaining outside the three mile limit and then
moves the vessel to a U.S. port to offload the product is engaged
in coastwise trade.
5). Whether a U.S.-flag fish processor operating beyond the
twelve mile limit which brings the product on board, processes
the product while remaining outside the twelve mile limit and
then transfers the product to a foreign vessel is engaged in
foreign trade requiring a registry endorsement on the Certificate
of Documentation.
6). Whether the answers to the scenarios listed above would
be different if the product has been purchased by the fish
processor, or if the product has been consigned to them for
processing and transport to a U.S. port.
LAW AND ANALYSIS:
Title 46, United States Code Appendix, section 883 (46
U.S.C. App. 883), 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.
Section 4.80b(a), Customs Regulations (19 CFR 4.80b(a))
provides, in part, that:
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.
The Vessel Documentation Act, 46 U.S.C. 12101 et seq., sets
forth the terms under which vessels may be documented for
coastwise trade. Under 46 U.S.C. 12106, only vessels eligible
for documentation (i.e., vessels over five net tons and owned by
a U.S. citizen) which were built in the United States (or
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captured as a war prize) may be documented for the coastwise
trade. Further, 46 U.S.C. 12106(b) states that, subject to the
laws of the United States regulating the coastwise trade, only a
vessel for which a certificate of documentation for which a
coastwise endorsement has been issued may be employed in the
coastwise trade. However, it should be noted that 46 U.S.C.
12106(c) contains certain exceptions for vessel engaging in the
coastwise trade of fisheries products between places in Guam,
American Samoa, and the Northern Mariana Islands.
Title 19, United States Code, section 1401(c) defines the
term "merchandise" as "goods, wares, and chattels of every
description, and includes merchandise the importation of which is
prohibited, and monetary instruments as defined in section 5312
of Title 31." Moreover, under a recent amendment to 46 U.S.C.
App. 883, the term "merchandise" encompasses even "valueless
material."
In interpreting section 883, Customs has ruled that a points
in the United States embraced within the coastwise laws include
points in the territorial sea (defined as the belt, three
nautical miles wide, seaward of the territorial sea baseline),
and points located in internal waters (those waters landward of
the territorial sea baseline, in cases where the baseline and the
coastline differ). For purposes of the coastwise laws, then, the
high seas are those waters outside the three-mile territorial
sea.
We note that, on December 27, 1988, Presidential
Proclamation 5923 extended the territorial sea of the United
States to 12 nautical miles from the baselines of the United
States and included waters adjacent to the coasts of the United
States, the U.S. Commonwealth of Puerto Rico, Guam, American
Samoa, the U.S. Virgin Islands, the Commonwealth of the Northern
Mariana Islands, and any other territory or possession over which
the United States exercises sovereignty.
However, the Proclamation contained language limiting the
operation of this extension by stating:
Nothing in this Proclamation:
(a) extends or otherwise alters existing
Federal or State law or any jurisdiction,
rights, legal interests, or obligations
derived therefrom; or
(b) impairs the determination, in accordance
with international law, of any maritime
boundary of the United States with a foreign
jurisdiction.
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Thus, the Proclamation extends the territorial sea only for
international purposes; existing Federal and State laws are not
altered. Accordingly, for purposes of the Customs laws, the
territorial sea remains at three miles.
The Commercial Fishing Industry Vessel Anti-Reflagging Act
of 1987, (the Anti-Reflagging Act) Pub.L. No. 100-239, section 3,
101 Stat. 1778 (1988), expanded both the geographical boundaries
and the scope of activities which constitute "fisheries"
previously set forth in 46 U.S.C. 12101 to include the following
activities:
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 [EEZ].
46 U.S.C. 12101(a)(1).
The Exclusive Economic Zone [EEZ] was established on March
10, 1983, by Presidential Proclamation 5030, and is defined as "a
zone contiguous to the territorial sea, including zones
contiguous to the territorial sea of the United States, the
Commonwealth of Puerto Rico, the Commonwealth of the northern
Mariana Islands (to the extent consistent with the Covenant and
the United Nations Trusteeship Agreement), and United States
overseas territories and possessions. The Exclusive Economic
Zone extends to a distance of 200 nautical miles from the
baseline from which the breadth of the territorial sea is
measured."
The Vessel Documentation Act, 46 U.S.C. 12101 et seq., sets
forth the terms under which vessels may be documented for the
fisheries. Under 46 U.S.C. 12108(a), only vessel eligible for
documentation (i.e., vessels over five net tons and owned by a
U.S. citizen) which were built or rebuilt in the United States
(or captured as a war prize may be documented for the fisheries.
Furthermore, 46 U.S.C. 12108(b) states that, subject to the laws
of the United States regulating the fisheries, only a vessel for
which a certificate of documentation with a fisheries endorsement
has been issued may be employed in the fisheries. However, 46
U.S.C. 12108(c) provides certain conditions for the issuance of a
fishery endorsement for vessels engaged in the fisheries in Guam,
American Samoa and the Northern Mariana Islands.
The legislative history of the Anti-Reflagging Act indicates
that the primary purpose of the Act was to prohibit the
reflagging of foreign-built processing vessels as vessels of the
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United States for operation in the domestic fisheries under the
Magnuson Fishery Conservation and Management Act (MFCMA),
codified at 16 U.S.C. 1801 et seq. (House Report No. 100-423,
U.S. Code Congressional and Administrative News at page 3245).
The House Report also states that the Anti-Reflagging Act was
intended to further "the fundamental purposes of the [MFCMA] by
displacing foreign-built with domestically-built fishing industry
vessels in U.S. fisheries." Moreover, the House Report states
that the Anti-Reflagging Act "harmonizes fisheries and maritime
law by imposing similar requirements on the documentation,
ownership, manning and construction of fishing, fish tender, and
fish processing vessels engaging in the fisheries trade as are
imposed on vessels engaged in coastwise transportation under the
shipping laws."
Utilizing the definitional framework and applicable statutes
detailed above, the analysis of the five issues presented for our
determination is as follows:
1). Whether a U.S.-flag fish processor, which anchors
within the three mile limit, brings products on board,
processes the product and then moves to a U.S. port
while remaining within the three mile limit to offload
the product is engaged in coastwise trade.
Since the processing of fish is included in the list of
activities which constitute "fisheries" under 46 U.S.C.
12101(a)(1), and since this processing is undertaken within the
waters of the EEZ, the vessel would be engaged in the fisheries.
Since the fish product to be transported falls within the
category of "goods, wares and chattels of every description"
within the meaning of 19 U.S.C. 1401, the fish product would be
considered to be "merchandise," the transportation of which is
subject to the coastwise limitation contained in 46 U.S.C. App.
883.
Since, at the time of product lading, the vessel is located
within the three-mile territorial sea, it is located at a
coastwise point. Therefore, upon moving the fish product to a
U.S. port, there has been a transportation of merchandise from
one U.S. coastwise point to another U.S. coastwise point. Since
there has been a transportation of merchandise between points in
the United States the vessel is engaging in coastwise trade.
2). Whether a U.S.-flag fish processor, which anchors
within the three mile limit, brings the product on
board, processes the product and then moves the vessel
to a U.S. port but goes beyond the three mile limit
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before landing at a U.S. port to offload is engaged in
coastwise trade.
Since the processing of fish is included in the list of
activities which constitute "fisheries" under 46 U.S.C.
12101(a)(1), and since this processing is undertaken within the
waters of the EEZ, the vessel would be engaged in the fisheries.
Since the fish product to be transported falls within the
category of "goods, wares and chattels of every description"
within the meaning of 19 U.S.C. 1401, the fish product would be
considered to be "merchandise," the transportation of which is
subject to the coastwise limitation contained in 46 U.S.C. App.
883.
Since the vessel was located within the waters of the
territorial sea when the fish product was placed on board, the
vessel was laden at a U.S. coastwise point. Under 46 U.S.C. App.
883, the limitation placed upon the movement of merchandise in
non-qualified vessels is transportation "either directly or by
way of a foreign port." Here, although the vessel travels beyond
the three-mile territorial sea, it has proceeded directly from
one coastwise point to another coastwise point. The continuity
of the voyage has not been broken.
Therefore, upon moving the fish product to a U.S. port,
there has been a transportation of merchandise from one U.S.
coastwise point to another U.S. coastwise point. Since there has
been a transportation of merchandise between points in the United
States the vessel is engaging in coastwise trade.
3). Whether a U.S.-flag fish processor operating beyond
the three mile limit which brings the product on board,
moves the vessel within the three mile limit, processes
the product and then moves the vessel to a U.S. port to
offload the product is engaged in coastwise trade.
Since the processing of fish is included in the list of
activities which constitute "fisheries" under 46 U.S.C.
12101(a)(1), and since this processing is undertaken within the
waters of the EEZ, the vessel would be engaged in the fisheries.
Since the fish product to be transported falls within the
category of "goods, wares and chattels of every description"
within the meaning of 19 U.S.C. 1401, the fish product would be
considered to be "merchandise," the transportation of which is
subject to the coastwise limitation contained in 46 U.S.C. App.
883.
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However, since the fish product is placed aboard the vessel
while it is beyond the three-mile territorial sea, merchandise
has not been laden at a coastwise point. Even if the vessel
proceeds to a U.S. port, a transportation of merchandise between
coastwise points has not occurred. Thus, the vessel has not
engaged in the coastwise trade.
4). Whether a U.S.-flag fish processor operating beyond
the three mile limit which brings the product on board,
processes the product while remaining outside the three
mile limit and then moves the vessel to a U.S. port to
offload the product is engaged in coastwise trade.
Since the processing of fish is included in the list of
activities which constitute "fisheries" under 46 U.S.C.
12101(a)(1), and since this processing is undertaken within the
waters of the EEZ, the vessel would be engaged in the fisheries.
Since the fish product to be transported falls within the
category of "goods, wares and chattels of every description"
within the meaning of 19 U.S.C. 1401, the fish product would be
considered to be "merchandise," the transportation of which is
subject to the coastwise limitation contained in 46 U.S.C. App.
883.
However, since the fish product is placed aboard the vessel
while it is beyond the three-mile territorial sea, merchandise
has not been laden at a coastwise point. Even if the vessel
proceeds to a U.S. port, a transportation of merchandise between
coastwise points has not occurred. Thus, the vessel has not
engaged in the coastwise trade.
5). Whether a U.S.-flag fish processor operating beyond
the twelve mile limit which brings the product on
board, processes the product while remaining outside
the twelve mile limit and then transfers the product to
a foreign vessel is engaged in foreign trade requiring
a registry endorsement on the certificate of
documentation.
Since the processing of fish is included in the list of
activities which constitute "fisheries" under 46 U.S.C.
12101(a)(1), and since this processing is undertaken within the
waters of the EEZ, the vessel would be engaged in the fisheries.
With regard to the activities of the fish processing vessel,
we note that the term "foreign trade" has been described in
previous Customs precedent as encompassing a variety of activity,
including, "trade between foreign countries", "the exportation
and importation of goods, or the exchange of commodities of
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different countries," and "trading between a port of the United
States and a foreign port, or between two foreign ports, or
between the Atlantic and Pacific ports of the United States"
(Customs Ruling 106552 (dated March 13, 1984)).
In light of these descriptions, insofar as engagement in
foreign trade is concerned, there is such an engagement for
Customs purposes. That is not to say, however, that the same
must be true for the purposes of the laws enforced by your
agency, e.g., for documentation purposes. We believe that
question is within the discretion of your legal office.
The scenario presented for our consideration does not
indicate what the foreign vessel will do upon receiving the fish
product. We note that, under the Nicholson Act (46 U.S.C. App.
251(a)), a foreign-flag vessel may not land in a port of the
United States its catch of fish taken on board on the high seas,
which, for purposes of this statute, are those waters beyond the
three-mile territorial sea.
In the alternative, should the vessel wish to proceed to a
foreign port upon receiving the fish product, we note that a
permit may be required for it to do so. As the issuance of such
permits is not within the purview of the Customs Service, we
suggest you contact the National Oceanic and Atmospheric Agency
for further information.
6). Whether the answers to the scenarios listed above
would be different if the product has been purchased by
the fish processor, or if the product has been
consigned to them for processing and transported to a
U.S. port.
The fact that the fish products may have been purchased or
consigned to the fish processing vessel for processing and
transport of a U.S. port is of no consequence to the analysis
provided above. The fish products meet the definition of
"merchandise" provided by 19 U.S.C. 1401(c) and therefore, are
subject to the coastwise limitation pursuant to 46 U.S.C. 883.
Finally, we note that this letter addresses only those
federal requirements that are administered by the U.S. Customs
Service. While we are unaware of any other federal or state
agency requirements that might pertain to the issues you present,
it is possible that such requirements exist.
HOLDING:
1). A U.S.-flag fish processor anchored within the three
mile limit, which brings a fish product on board, processes the
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product and then moves to a U.S. port while remaining within the
three mile limit to offload the product is engaged both in the
fisheries and in coastwise trade.
2). A U.S.-flag fish processor anchored within the three
mile limit, which brings a fish product on board, processes the
product and then moves the vessel to a U.S. port but goes beyond
the three mile limit before landing at a U.S. port to offload is
engaged both in the fisheries and in coastwise trade.
3). A U.S.-flag fish processor operating beyond the three
mile limit, which brings a fish product on board, moves the
vessel within the three mile limit, processes the product and
then moves the vessel to a U.S. port to offload the product is
engaged in the fisheries but is not engaged in coastwise trade.
4). A U.S.-flag fish processor operating beyond the three
mile limit, which brings a fish product on board, processes the
product while remaining outside the three mile limit and then
moves the vessel to a U.S. port to offload the product is engaged
in the fisheries but is not engaged in coastwise trade.
5). A U.S.-flag fish processor operating beyond the twelve
mile limit, which brings the product on board, processes the
product while remaining outside the twelve mile limit and then
transfers the product to a foreign vessel is engaged in foreign
trade.
6). The answers to the scenarios listed above would not be
different if the product has been purchased by the fish
processor, or if the product has been consigned to them for
processing and transport to a U.S. port.
Sincerely,
B. James Fritz
Chief