VES-3-07-RR:IT:EC 115771 GEV
Jose A. Chabert Liompart
Manager
Subaquatic Main Operation Section
Water Company of Puerto Rico
Post Office Box 7066
San Juan, Puerto Rico 00916-9990
RE: Coastwise Trade; Pipeline Repairs; 46 U.S.C. App. §§ 289, 883
Dear Mr. Liompart:
This is in response to your fax dated August 8, 2002, with supporting documentation, requesting a ruling concerning the use of a foreign-flag vessel for underwater pipeline repairs. Our ruling is set forth below.
FACTS:
The Puerto Rico Aqueduct & Sewer Authority (PRASA) has contracted with Bic Marine, Inc. (BIC) to perform emergency underwater repairs on a water pipeline at the waste water treatment plant at Ponce, Puerto Rico. This work is being performed on an emergency basis due to the fact that a low flow has been detected in several segments of the pipeline and it is necessary to comply with the water quality parameters established by the U.S. Environmental Protection Agency.
Bic has informed your company that they will be using the services of Dockside Marine Contractors, Inc., which will supply a Panamanian-flag vessel (the GREAT CARIBE) to transport the necessary equipment (a remotely operated vehicle (ROV)) to perform the work. The vessel will be operated in a radius of two nautical miles from the Ponce Waste Water Treatment Plant.
- 2 -
ISSUE:
Whether the use of a foreign-flag vessel in effecting repairs to an underwater pipeline as described above is violative of 46 U.S.C. App. §§ 289 and/or 883.
LAW AND ANALYSIS:
Title 46, United States Code Appendix, § 289 of title 46 (46 U.S.C. App. § 289), prohibits the transportation of passengers between points in the United States embraced within the coastwise laws, either directly or by way of a foreign port, in a non-coastwise-qualified vessel (i.e., one that is not U.S.-built, owned and documented). We note that pursuant to § 4.50(b), Customs Regulations (19 CFR § 4.50(b)), promulgated pursuant to 46 U.S.C. App. § 289 and used in Customs administration of that statute, the word "passenger" is defined as " ... any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership or business."
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 one that is coastwise-qualified (i.e., U.S.-built, owned and documented).
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 internal waters, landward of the territorial sea baseline, in cases where the baseline and the coastline differ. With respect to Puerto Rico, Customs has long-held that the coastwise laws are applicable thereto pursuant to 48 U.S.C. § 744 and 46 U.S.C. § 877.
In regard to the operation of the vessel in question, it has long been the position of the Customs Service that the transportation by such vessels of equipment, supplies and materials used on or from such vessels in effecting services such as inspections of, and/or repairs to, offshore or subsea structures, including the laying and repair of pipelines, does not constitute a use of the vessel in the coastwise trade, provided, such articles are necessary for the accomplishment of the vessel’s mission, and are usually carried on board as a matter of course. (Customs ruling letters 108442, dated August 13, 1986;
- 3 -
109576, dated July 12, 1988; 113838, dated February 25, 1997, and T.D. 78-387) The underlying rationale for this position is that the aforementioned articles are not considered "merchandise" for purposes of 46 U.S.C. App. § 883. Furthermore, crewmembers of such vessels, including divers and technicians, as well as construction personnel carried on board in connection with the aforementioned services performed on or from the vessels, are not considered "passengers" within the meaning of 19 CFR § 4.50(b). (Id., see also C.S.D.s 79-321, 81-214)
Accordingly, our review of the information you provided indicates that the use of the GREAT CARIBE for purposes of repairing the subject pipeline is not prohibited by the above-cited coastwise laws.
HOLDING:
The use of a foreign-flag vessel in effecting repairs to an underwater pipeline as described above is not violative of 46 U.S.C. App. §§ 289 and/or 883.
Sincerely,
Acting Chief
Entry Procedures and Carriers Branch