VES-10-02-CO:R:P:C 111833 BJF
Stuart S. Dye, Esquire
Graham and James
Attorneys at Law
2000 M Street, N.W.
Washington, D.C. 20036
RE: The applicability of the coastwise laws to the proposed use
of a foreign-built drill barge in a dredging project and the
movement of dredge materials in the territorial waters of
the U.S.
Dear Mr. Dye:
This is in reference to your letter of August 5, 1991, in
which you requested a ruling concerning the use of a foreign-
built drill barge in a dredging project within the United States
territorial waters.
FACTS:
You state that the proposed activity forming the basis for
this ruling request is the contemplated charter and operation by
your client of a foreign-built drill barge within the territorial
waters of the U.S. as part of a dredging project. The foreign
drilling/blasting barge contemplated for use in the proposed
activity would employ hydraulic drilling equipment of foreign
origin. The equipment would use compressed air to drive numerous
holes into the seabed approximately two (2) inches in diameter,
10 to 100 feet apart, and 10 to 100 feet deep. After the barge's
crew completes the drilling that is required to place dynamite
for the purpose of dislodging the sea bottom, the crew proceeds
to do so by placing and detonating the charges.
As to the remaining aspects of the dredging operation, you
state that your client intends to employ a U.S. coastwise-
qualified vessel that will accompany the foreign drilling/
blasting barge, storing and carrying the dynamite and related
materials used in the blasting operation. You state that at each
drilling site, the dynamite necessary for the daily drilling
activities will be transferred from this U.S. coastwise-qualified
storage vessel to the foreign drilling/blasting barge, unlading
onto the foreign drilling/blasting barge only that amount of
dynamite required for a particular blasting operation at a given
site. Other U.S.-built, U.S. flagged vessels will subsequently
transport the material removed from its original site.
Counsel cites prior administrative rulings as precedent
for the proposition that drilling and pile driving are not
"dredging". Those precedents are not decisive in cases of first
impression involving novel and unaddressed circumstances. Which
is what we address in this ruling.
We are uninformed as to whether the other vessels' owner-
ship history, or other factual particulars concerning the
vessels, support their use in the coastwise trade.
We are also uninformed as to the means by which the barge's
crew is transported between coastwise points.
ISSUES:
1. Is a vessel that removes, by blasting, the sea bottom
from one point to another, engaged in " dredging" for the
purposes of title 46 U.S.C App. 292?
2. Is the use of a U.S.-built and flagged vessel permitted
to transport merchandise and passengers between coastwise
points?
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."
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
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.
It is clear from the foregoing that section 292 is a
restrictive statute and, if interpretation is required, that
interpretation should reflect the legislative purpose of the
statute.
We believe that the present case is clearly distinguishable
from those cited by counsel; the latter cases involved vessels
whose mission was limited to work preparatory to the dislodging
and displacement of the sea bottom. In the case before us, the
vessel drills as a secondary, ancillary activity to its primary
purpose, which is dislodging and removal, as part of a dredging
operation, of the sea bottom from one site to another. This
first displacement of the dredged material (for discussion of
"dredged" please see discussion immediately below.) is perhaps
followed by a further transportation to a second site.
At the above point in time (prior to any further movement of
the material) the issue is not one of "transportation" but one of
"dredging." While section 292 does not define dredging, Customs
has in the past cited a definition relied upon by the court in
Gar-Con Development, Inc. v. State of Florida, Department of
Environmental Regulation, found at 468 So. 2nd 414. That
definition is as follows:
Dredging" is the "excavation" by any means, in
waters of the state....
...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.
Giving the word "excavate" its common, plain and ordinary
meaning, the use of a foreign drilling/blasting barge for the
proposed blasting operation would be dredging in that the
operation would involve removing soil from one place on the
seabed to another.
The Customs Service has ruled that dredging, for purposes of
46 U.S.C. App. 292, includes the use of a vessel equipped with
excavating machinery in digging up or otherwise removing
submarine material. Thus we have held that a foreign-built tug
which was used to tow a metal plow along the floor of the sea to
create a furrow in which to lay pipe would be engaging in
dredging and prohibited under section 292 (see rulings 103692 MKT
and 108222 PH).
Given the foregoing, we hold that the proposed activity
constitutes dredging so as to come within the prohibition of 46
U.S.C. App. 292.
As to the second point, i.e., whether a U.S.-built and
flagged vessel may transport passengers and crew between
coastwise points, counsel's ruling request evidences his
familiarity with the basic issues. However, we cannot comment on
whether all the vessels in question may engage in those
activities because we do not know whether they are coastwise
qualified, as opposed to merely built and flagged in the United
States. Section 177.2(a)(iv) of the Customs Regulations (19 CFR
177.2(a)(iv) provides that where a transaction involves a vessel,
the request for a ruling should include information relating to a
place of build and nationality of registration and, if to be used
in waters under the jurisdiction of the United States, the exact
place or places of intended use, if known. Further submissions
relating to this ruling or future ruling requests must comply
with the requirements set forth in section 177.2(a)(iv) before
we will issue a ruling.
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 transportation, 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 ....
"Merchandise" is defined in section 1401(c) of title 19,
United States Code, to include goods, wares, and chattels of
every description, and includes fish, fish products, and fish
packaging materials that are assembled into packages containing
fish. Section 883 specifically provides that, for purposes of
its provisions, "merchandise" includes valueless material (Pub.L.
100-329; 102 Stat. 588). The transportation of valueless
material, whether or not it has commercial value, from a point or
place in the United States or point or place on the high seas
within the Exclusive Economic Zone (EEZ) as defined in the
Presidential Proclamation of March 10, 1983, to another point or
place in the United States or a point or place on the high seas
within that EEZ would also be prohibited under the provisions of
section 883. Dynamite is considered merchandise for the purpose
of section 883.
The transportation of dynamite which has been laden onto a
foreign blasting/drill barge from a coastwise-qualified-vessel,
to points embraced within the coastwise laws, where it would be
unladen, would be prohibited under the provisions of 46 U.S.C.
App. 883.
The transportation of the dredged material on a non-
coastwise-qualified vessel from a point or place in the United
States or a point or place on the high seas within the Exclusive
Economic Zone (EEZ) as defined in the Presidential Proclamation
of March 10, 1983, to another point of place in the United States
or a point or place on the high seas within the EEZ would be
prohibited under the provisions of 46 U.S.C. App. 883.
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."
HOLDINGS:
1. The use of a foreign drilling/blasting barge to
participate in a dredging operation by blasting and
dislodging the sea bottom from its original sea bottom
position to another such position, is an engagement in
dredging and therefore is a violation of 46 U.S.C. App. 292.
2. The transportation of the dynamite from the shore to
the foreign/blasting drill barge on a coastwise-qualified
vessel is not a violation of 46 U.S.C. App. 883.
The transportation of dynamite which has been laden
onto a foreign blasting/drill barge from a coastwise-
qualified-vessel, to points embraced within the coastwise
laws, where it would be unladen, would be prohibited under
the provisions of 46 U.S.C. App. 883.
Sincerely,
Stuart P. Seidel
Director, International
Trade Compliance Division