VES-3/3-15/10-3-RR:IT:EC 114607 GOB
Fred B. Baldwin, Esq.
1321 State Street
New Orleans, LA 70118
RE: Coastwise transportation; Outer Continental Shelf; Towing; 46 U.S.C. App. 289, 883, 316(a); 43 U.S.C. 1333(a)
Dear Mr. Baldwin:
This is in response to your ruling request of February 9, 1999 submitted on behalf of Saipem Inc. (“Saipem”).
FACTS:
You describe the pertinent facts as follows.
Saipem plans to use two foreign-flag cargo barges (the “barges”) to transport J-lay pipelay equipment (“J-lay equipment” or “equipment”) to and from a foreign-flag heavy lift/pipelaying semisubmersible (“S-7000" or “pipelaying vessel”). The S-7000 is a multipurpose vessel used for heavy lift and pipelaying. The equipment will be placed upon the barges in Rotterdam. The barges will be towed directly to a location on the Gulf Coast of the U.S., where the equipment will be stored on board the barges. When the equipment is needed on board the S-7000, the barges will be towed offshore to rendezvous with the S-7000. The pipelaying equipment will be transferred from the barges to the S-7000 using the cranes onboard the S-7000. The rendezvous site will be located beyond three miles from the U.S. shoreline, but within the waters of the U.S. that come within the provisions of the Outer Continental Shelf Lands Act. The S-7000 will be held in place using dynamic positioning during the transfer and the two barges will be moored directly to the S-7000 during the transfer activity. Neither the S-7000 nor the barges will be attached to the seabed.
While the pipelaying activity is occurring, the barges will be towed to a location on the U.S. Gulf Coast and stored until the equipment is ready to be offloaded from the S-7000. Upon completion of the pipelaying activity, the barges will be towed to a site beyond three miles from the U.S. shoreline, but within the waters which come within the provisions of the Outer Continental Shelf Lands Act. The towing of the barges may be accomplished by non-coastwise-qualified vessels. At that point the equipment will be transferred from the S-7000 to the barges. The S-7000 will be held in place using its dynamic positioning system during the transfer and the two barges will be moored directly to the S-7000. Neither the S-7000 nor the barges will be attached to the seabed while the equipment is being transferred to the barges. In fact, the S-7000 will not be attached to the seabed at any time during the described events, including prior to and subsequent to the transfer of equipment to the S-7000.
While it is planned that no equipment will be removed from or placed aboard the barges while they are stored at the U.S. site, it is possible that some modification or repair of the equipment might be required before the barges are towed to the rendezvous site. This work could involve replacing components that were found to be defective or placing aboard the barges equipment which was not ready for shipment when the barges departed from Rotterdam.
In response to our request for additional information with respect to the towing operation, the following information was provided:
Two towing tugs will be utilized to tow the barges, C-9 and S-42, from the storage site [on the U.S. Gulf Coast] to the site at which they will rendezvous with the S-7000 for transfer of pipelaying equipment from the barges to the S-7000. Each of the barges will be carrying pipe-laying equipment owned by Saipem, to be utilized onboard the S-7000.
The tugs used to tow the loaded barges from the storage site to the rendezvous location may or may not be the same tugs used to tow the loaded barges from Europe to the storage site. If the same tugs are utilized for the tow to the rendezvous location, these tugs will remain attached to the loaded barges during the entire transport and storage operation from Europe to the OCS rendezvous location.
For safety reasons, two assist tugs already at the rendezvous site will be used to assist in maneuvering the loaded barges alongside the S-7000 and these tugs will remain connected to the barges during the entire period they remain alongside the S-7000. The towing tugs utilized to tow the C-9 and S-42 from the storage site to the rendezvous location will be detached and, during the transfer operation, these tugs may or may not remain at the worksite.
The barges, with the assist tugs connected, will remain alongside the S-7000 for approximately three days while the pipelaying equipment is transferred from the barges to the S-7000.
Following the transfer of equipment to the S-7000, the empty barges will be towed to a storage site at a location on the U.S. Gulf Coast. This storage site may or may not be at the same location where the loaded barges were originally stored. The storage period is estimated to be approximately two to three months, during which the pipelaying operations will be performed by the S-7000. Either the original tugs that towed the barges to the rendezvous location, or other tugs, will tow the empty barges from the rendezvous location to the storage site.
After completing the pipelaying operations, the empty barges will be towed from the storage site to the rendezvous location, and the pipelaying equipment will be transferred from the S-7000 back to the barges. The tow of the empty barges will be performed by two tugs that may or may not be U.S. coastwise qualified.
Two assist tugs already at the rendezvous location will be used to assist in maneuvering the empty barges alongside the S-7000 and these tugs will remain connected to the barges during the entire period they remain alongside the S-7000. The towing tugs utilized to tow the C-9 and S-42 from the storage site to the rendezvous location will be detached and, during the transfer operation, these tugs may or may not remain at the worksite.
The barges, with the assist tugs connected, will remain alongside the S-7000 for approximately three days while the pipelaying equipment is transferred from the S-7000 to the barges.
Following the transfer of pipelaying equipment to the barges, the loaded barges will be towed directly to a foreign destination or to a storage site at a location on the U.S. Gulf Coast, where the barges will be temporarily stored prior to transport to a foreign destination. If stored at a U.S. site, the storage period will be dependent on the timing and schedule for the next job in which the pipelaying equipment is needed by the S-7000.
The tugs used to tow the empty barges to the rendezvous site may or may not subsequently be used to tow the loaded barges from the rendezvous site to their next destination, which could be either a foreign destination or a U.S. storage site where the barges will be temporarily stored prior to transport to a foreign destination.
You also state the following alternative scenario with respect to the towing:
An alternative to the above is to utilize the towing tugs to provide additional assistance to hold the barges in place alongside the S-7000 at the rendezvous location. These tugs would be in addition to the two assist tugs, and their use would be to provide additional safety while the barges are alongside the S-7000.
In this scenario, the towing tugs would be attached to the loaded barges at the storage site, remain attached at the rendezvous location and remain attached until the empty barges arrive at the storage site. The towing tugs may or may not be the same tugs used to tow the loaded barges from Rotterdam to the U.S. storage site.
When the pipelaying operations are completed, the towing tugs would be attached to the empty barges at the storage site, remain attached at the rendezvous location and be detached when the loaded barges reach their next destination, which could be either a foreign destination or a U.S. storage site where the barges will be temporarily stored prior to transport to a foreign destination.
ISSUE:
The application of the coastwise laws to the above-described activity.
LAW and ANALYSIS:
Statutory and Regulatory Framework
Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. A vessel that is built in, documented under the laws of, and owned by citizens of the United States, and which obtains a coastwise endorsement from the U.S. Coast Guard, is referred to as "coastwise-qualified."
The coastwise laws generally apply to points in the territorial sea, which is defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline.
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, documented under the laws of, and owned by citizens of the United States.
19 CFR 4.80b(a) provides, in pertinent part:
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.
19 U.S.C. 1401(c) defines “merchandise,” in pertinent part, as follows: “goods, wares, and chattels of every description...”
The coastwise law applicable to the carriage of passengers is found in 46 U.S.C. App. 289 and provides that:
No foreign vessel shall transport passengers between ports or places in the United States, either directly or by way of a foreign port, under a penalty of $200 for each passenger so transported and landed.
Section 4.50(b), Customs Regulations (19 CFR 4.50(b)) states as follows:
A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business.
46 U.S.C. App. 316(a) prohibits the use of a non-coastwise-qualified vessel to tow any vessel, other than a vessel in distress, between ports or places in the United States embraced within the coastwise laws, either directly or by way of a foreign port, or to do any part of such towing, or to tow any such vessel between points in a harbor of the United States.
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, 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 that principle to drilling platforms, artificial islands, and similar structures, as well as to devices attached to the seabed of the outer Continental Shelf for the purpose of resource exploration operations.
Application of the Coastwise Laws and Regulations to the Stated Facts
The following constitutes our analysis of the coastwise laws within the context of the stated facts. We will also address certain specific questions which you have asked.
The facts do not appear to implicate 46 U.S.C. App. 289, the coastwise passenger statute. We note that crewmembers are not considered passengers.
In C.S.D. 79-321, we held that the use of a non-coastwise-qualified vessel to lay pipe between points embraced within the coastwise laws of the U.S. was not prohibited by 46 U.S.C. App. 883
Based upon the facts presented, it appears that the J-lay equipment is equipment of the S-7000 or pipelaying vessel because it is equipment which is intended for use on the S-7000 or pipelaying vessel. The J-lay equipment is not equipment of the barges because it is not intended for use on the barges. Accordingly, when transported on the barges, the equipment is merchandise subject to 46 U.S.C. App. 883.
The transportation of the equipment on the barges from Rotterdam to a domestic port is not a movement subject to 46 U.S.C. App. 883 because the transportation commenced at a foreign port, i.e., the equipment was laded on to the barges at a foreign port. We further note that the merchandise is not to be unladed at the domestic point. Thus, in this situation there is neither a lading nor an unlading of merchandise at a coastwise point.
As stated above, the S-7000 will not be attached to the OCS at any time during the described events, including prior to and subsequent to the transfer of equipment to the S-7000. Accordingly, the S-7000 is not a coastwise point within the meaning of the coastwise laws. Therefore, any lading or unlading of merchandise at the S-7000 is not an activity subject to 46 U.S.C. App. 883. Further, in response to your specific question, even if the S-7000 were to be considered a coastwise point, the transportation of the equipment from Rotterdam to the S-7000, by way of a U.S. port where the equipment was not unladed from the vessel, would not be a coastwise movement (i.e., transportation subject to 46 U.S.C. App. 883) because the merchandise was laded on the vessel at a foreign port.
You ask with respect to the coastwise law ramifications of the lading of late arriving components of the J-lay equipment on the barges while they are in the U.S. port and the subsequent unlading of those components on to the S-7000. Based upon the determination that the S-7000 is not a coastwise point, there is no coastwise prohibition with respect to such transportation.
Assuming that the barges remain stationary when maintenance, modifications, or repairs are performed thereon in the U.S. port, such activity would not constitute coastwise transportation.
Inasmuch as the S-7000 is not a coastwise point (see above), the proposed towing activities described in the “primary scenario” are not violative of 46 U.S.C. App. 316(a). Such towing, where the towing vessels are detached from the barges at the S-7000, is permissible under the coastwise laws because it constitutes tows from a coastwise point to a non-coastwise point, and vice versa. Accordingly, such towing may be accomplished by a non-coastwise-qualified vessel.
With respect to your alternative scenario where the towing vessels remain attached to the barges throughout the transfer operation, the proposed towing would not be violative of 46 U.S.C. App. 316(a) if the barges return to the same storage site on the U.S. Gulf Coast from which they departed. However, under the alternative scenario where the barges are returned to a different storage site on the U.S. Gulf Coast, and where the barges remain attached to the towing vessels throughout the operation, such activity would be violative of 46 U.S.C. App. 316(a) because it would constitute a tow from one U.S. point (the storage site on the U.S. Gulf Coast) to a second U.S. point (a different storage site on the U.S. Gulf Coast).
You also ask whether the placement of a gangway between the S-7000 and a facility moored to the OCS while the equipment is being transferred would cause the S-7000 to become a coastwise point. Our answer to this question is yes. We would view the S-7000 as an extension of the moored facility which is a coastwise point such that the S-7000 would be a coastwise point.
HOLDING:
The coastwise laws, 46 U.S.C. App. 289, 883, and 316(a), apply as described above with respect to the activities described above.
Sincerely,
Jerry Laderberg
Chief,
Entry Procedures and Carriers Branch