VES-10-03-RR:IT:EC 227065 GEV
Kevin P. Callahan
Alaska Cargo Transport, Inc.
6700 W. Marginal Way S.W.
Seattle, Washington 98106
RE: Towing; Coastwise Trade; Registry-endorsed tug; Coastwise-endorsed barge; Guam; Continuous Tow; 46
U.S.C. App. 316(a), 883; 46 U.S.C. 12105(b); T.D. 70-223(19)
Dear Mr. Callahan:
This is in response to your letter dated June 24, 1996,
requesting a ruling regarding 46 U.S.C. App. 316(a) and 883.
The ruling you request is set forth below.
FACTS:
Your company is contemplating the use of a U.S.-flag tug
endorsed by the U.S. Coast Guard (USCG) with a registry
endorsement pursuant to 46 U.S.C. 12105. The vessel it would
tow is a U.S.-flag barge endorsed by the USCG with a coastwise
endorsement pursuant to 46 U.S.C. 12106. You inquire as to the
applicability of the towing statute and the Jones Act (46 U.S.C.
App. 316(a) and 883, respectively) in the following scenarios
each of which contemplates the transportation of cargo on only
the barge, not the tug:
1. On a voyage from Guam to Seattle, may cargo be loaded on
the barge in
Guam and part of the cargo be unloaded in Hawaii and
part of the cargo
unloaded in Seattle? Prior to arriving in Seattle, can
cargo be discharged
in another contiguous U.S. port? Can any cargo be
loaded in that other
contiguous port and discharged in Seattle?
2. On a voyage from Guam to Seattle, can cargo be loaded
on the barge in
Guam and discharged in Hawaii and cargo loaded on the
barge in Hawaii
and discharged in Seattle? Can any cargo be
discharged in another
contiguous U.S. port?
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3. On a voyage from Seattle to Guam, can cargo be loaded on
the barge in
Seattle that will be discharged in Hawaii and cargo
that will be discharged
in Guam?
4. On a voyage from Seattle to Guam, can cargo be loaded on
the barge in
Seattle and cargo loaded on the barge in Hawaii that
will be discharged
in Hawaii?
5. On a voyage from Seattle to Guam, can cargo be loaded on
the barge in
Seattle and additional cargo loaded on the barge in
another contiguous
U.S. port to be transported to Guam? On this voyage
can cargo be
discharged in Hawaii?
ISSUE:
Whether the transportation of merchandise by a coastwise-qualified barge towed by a non-coastwise-qualified tug as
described in any of the above scenarios constitutes a violation
of 46 U.S.C. App. 316(a) and/or 883.
LAW AND ANALYSIS:
Title 46, United States Code Appendix, 316(a) (46 U.S.C.
App. 316(a), the coastwise towing statute) prohibits the use of
any vessel not having in force a certificate of documentation
endorsed for the coastwise or Great Lakes trades (46 U.S.C.
12106, 12107, respectively) to tow any vessel other than a vessel
in distress, from any point or place embraced within the
coastwise laws of the United States to another such port or
place, either directly or by way of a foreign port or place, or
for any part of such towing.
Title 46, United States Code Appendix, 883 (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
and documented under the laws of the United States and owned by
persons who are citizens of the United States (i.e., a coastwise-qualified vessel). Pursuant to title 19, United States Code,
1401(c) (19 U.S.C. 1401(c)), the word "merchandise" is defined
as "...goods, wares and chattels of every description, and
includes merchandise the importation of which is prohibited."
Section 4.80b(a), Customs Regulations (19 CFR 4.80b(a)),
promulgated pursuant to 46 U.S.C. App. 883, provides, in part,
that:
A coastwise transportation of merchandise takes place,
within
the meaning of the coastwise laws, when merchandise
laden at
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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. (Emphasis
added)
Points embraced within the coastwise laws include all points
within the territorial waters of the United States, including
points within a harbor. The territorial waters of the United
States consist of 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 coastline differ.
Pursuant to 46 U.S.C. 877, the coastwise laws are
applicable to island territories and possessions of the United
States. However, as provided in 46 U.S.C. 12105(b), a vessel
for which a registry endorsement is issued may be employed in
foreign trade or trade with Guam, American Samoa, Wake, Midway,
or Kingman Reef.
In regard to the interpretation of 46 U.S.C. App. 316(a),
it is the position of the Customs Service that this provision is
to be construed consistently with 46 U.S.C. App. 883. (Treasury
Decision (T.D.) 70-223(19)) Consequently, Customs has held that
316(a) does not prohibit the continuous towing by the same
foreign-flag (or other non-coastwise-qualified) tug of a vessel
engaged in foreign trade on a voyage from a foreign port to a
United States port or ports, or from a United States port or
ports to a foreign port, merely because both the tug and towed
vessel stop at other United States ports to load export cargo or
unload import cargo. (Customs ruling letter 110236 citing T.D.
70-223(19))
In regard to your inquiry, Customs interpretation of 46
U.S.C. App. 316(a) and 883 as applied to the scenarios you
pose leads us to conclude that none of the five scenarios gives
rise to a violation of these statutes. In regard to 883, in
view of the fact that all of the cargo in question would either
be laden on or unladen from a coastwise-qualified barge at points
embraced within the coastwise laws (i.e., Guam, Hawaii, Seattle
and another contiguous U.S. port), its transportation aboard the
barge between those coastwise points would not constitute a
violation of that statute. With respect to 46 U.S.C. App.
316(a), we note that under the proposed scenarios the towing in
question would either commence or terminate at either Guam or
Seattle with intervening stops which are also coastwise points
(Hawaii and a contiguous U.S. port). As you know from our prior
correspondences to you, a U.S.-flag tug with a registry
endorsement may tow a barge between Guam and a U.S. port.
(Customs ruling letters 113196 and 113298) In regard to the tow
of the subject barge between the aforementioned intervening
coastwise points or between such points and Seattle, Customs has
taken the position that a towing operation is not terminated
unless the vessels in question are either unlinked or there is a
change of the towing vessel. (Customs ruling letters 113092 and
224477) Under the scenarios you pose the same tug would be used
in a continuous tow commencing in Guam and terminating in Seattle
(or vice versa). Consequently, as long as the tug and barge at
all times remain connected, the towing operations set forth in
the above scenarios are not in contravention of 316(a).
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HOLDING:
The transportation of merchandise by a coastwise-qualified
barge towed by a non-coastwise-qualified tug as described in any
of the above scenarios does not constitute a violation of 46
U.S.C. App. 883. With respect to 46 U.S.C. App. 316(a), no
violation thereof would arise provided the tug and barge at all
times remain connected during the course of a continuous tow
between Guam and Seattle notwithstanding stops at intervening
coastwise points.
Sincerely,
Chief
Entry and Carrier Rulings Branch