OT:RR:BSTC:CCR H253621 KLQ
Mr. Alexander Koff
Whiteford, Taylor & Preston, LLP
Seven Saint Paul Street
Baltimore, Maryland 21202-1636
RE: 46 U.S.C. § 55109; 43 U.S.C. 1333(a); Dredging; Outer Continental Shelf Lands Act;
43 U.S.C. § 1333(a)(1).
Dear Mr. Koff:
This is in response to your May 9, 2014, ruling request on behalf of your client, [ ] (“Company”), in which you request a ruling determining whether the proposed operation of a non-coastwise-qualified vessel would constitute a violation of 46 U.S.C. § 55109. Our decision follows.
FACTS
The following facts are from your ruling request and emails to this office, dated May 19, May 21, and May 22, 2014. The subject of this ruling is solely part one of a two-part project concerning an eventual pipelay route. In part one of the project, the Company has been asked by [ ] to design and build a trenching tool. The trenching tool will be a plow, a mechanical trencher, or a third model which is still in development. This proposed trenching tool will eventually be used in part two of this project to dig in the Outer Continental Shelf (“OCS”) off the coast of [ ] in order to lay a pipeline, which will be owned by [ ]. Wells and platforms will also be installed at a future date near the location of the anticipated pipelay route. The location of the anticipated pipelay route will be between [ ].
The Company will test the tool in various locations on the OCS within approximately a mile of the actual pipelaying site. Therefore, the distance between the testing sites and any platforms will vary. You further indicate that: (1) the testing will occur for no more than a few miles at a time during which the tool will be assessed for its ability to dig a trench [ ]; (2) the length of the test trench will be shorter than the length of the trench for the pipelay; (3) the testing will occur over a period of two months, which is shorter than the period of time it will take to complete the pipelay project; and (4) there will be approximately four to six years between the testing phase and the trenching operations for the pipelay.
ISSUE
Whether the proposed dredging on the OCS using a foreign-built vessel violates 46 U.S.C. § 55109.
LAW AND ANALYSIS
Pursuant to 46 U.S.C. § 55109, only coastwise-qualified vessels may engage in dredging in the navigable waters of the United States, providing, in pertinent part
[A] vessel may engage in dredging in the navigable waters of the United States only if—
the vessel is wholly owned by citizens of the United States for purposes of
engaging in the coastwise trade;
the charterer, if any, is a citizen of the United States for purposes of
engaging in the coastwise trade; and
(3) the vessel has been issued a certificate of documentation with a coastwise endorsement under chapter 121 of this title or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement
Dredging is defined as “excavation” by any means:
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.
CBP has long-held that the term “dredging” within the meaning of 46 U.S.C. § 55109, is “the use of a vessel equipped with excavating machinery in digging up or otherwise removing submarine material.” In the instant case, you propose to use a foreign-built trenching tool, on the OCS. You assert that the purpose of the trenching is to “test” the ability of the subject tool to dig a trench [ ]. For the purpose of 46 U.S.C. § 55109, this activity is properly termed dredging in that the foreign-built excavating machine will remove submarine material.
You indicate that the proposed dredging will take place on the OCS. Section 1(a) of the Outer Continental Shelf Lands Act of 1953 (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.
The OCSLA does not extend jurisdiction to activities wholly unrelated to the exploration, development, or production of natural resources on the seabed of the outer continental shelf. However, in the ruling request, your client makes a significant effort to explain that the subject dredging is part one of a two-phase project. This two-phase project is part of a larger project involving the construction of platforms and wells on the OCS. In HQ 109016 (July 22, 1987), CBP held that “the prohibition on dredging on the OCS extends to those operations which are in furtherance of the extraction of or the exploration for, or the development or production of, resources from the OCS.” The laying of pipes, in addition to the construction of platforms and wells on the OCS, evidences exploration, development, and production of resources from the OCS. The test of the dredge is not gratuitous or devoid of any connection to the exploration, development, or production of resources from the OCS because the dredge is specifically being tested in part one of this project to assure its functionality for purposes of part two of this project. The subject testing and pipelaying would not have occurred, but for the exploration, development, and production of resources from the OCS.
In the instant case, you state that the purpose of this specific dredging activity is to test the tool’s ability to dig a trench that is [ ]. In addition, you indicate that: (1) the tool will be tested within a mile of the actual pipelay site; (2) the testing will occur for no more than a few miles at a time and will not match the length of the proposed trench for the pipelay; (3) the testing will occur over a period of two months, which is shorter than the period of time it will take to complete the pipelay project; and (4) there will be approximately four to six years between the testing phase and the trenching operations for the pipelay project. You argue that these facts are sufficient to evidence that the subject dredging is merely a test and is not related to the exploration, development, or production of resources from the OCS. However, a physical and temporal distance between parts of the same project does not alter the purpose of the overall project. You cite a number of CBP rulings, discussed below, in support of your position that the testing of the dredge is too far removed from the pipelay project to qualify as exploration, development, and production of resources from the OCS.
Citing HQ 109849 (Nov. 18, 1988), you argue that exploring for resources has to be temporal in order for a vessel to qualify as a “coastwise point.” This logic is then applied to the facts of the current case and you argue that the subject dredging is too far removed from the exploration, development, and production of resources to qualify as prohibited activity. In HQ 109849, the requestor proposed to anchor a self-propelling drilling vessel on the OCS for 100 days. CBP stated, “a drilling vessel is considered a coastwise point while attached to the seabed of the OCS for the purpose of drilling or exploring for resources from the OCS.” However, in HQ 109849 CBP held that a “drilling vessel is considered to be so attached to the seabed of the OCS while engaged in drilling operations and while at anchor before or after engaging in drilling at that location.” The ruling neither attributes a period of time to the language “before and after,” nor does it specify a time frame in which the exploration, development, and production of resources must occur. Therefore, HQ 109849 does not support the position that the current dredging is too far removed to qualify as a prohibited activity because the language of HQ 109849 contemplates an extended period of time over which an activity may occur. In the present case, the testing of the dredge is part of a long term-plan to explore, develop, and produce resources from the OCS.
In addition, you cite a number of rulings which hold that non-producing wells, which have been permanently sealed or plugged, are not engaged in the exploration, development, or production of resources from the OCS. You argue that similar to a plugged well, the testing of a trenching tool on the seabed of the OCS is not related to the exploration, development, or production of resources from the seabed. However, this comparison ignores some crucial and distinguishable facts. The cases you cite all reference activities that have concluded. In comparison, the subject testing is only part one of a two-part project. Moreover, both parts of the project are a portion of a long-term effort to explore, develop, and produce resources from the OCS. Therefore, these cases do not support a finding that the subject activity is not related to the exploration, development, or production of resources from the OCS because the cases reference a situation in which there is no activity, while the facts of the present case evidence an ongoing project.
The subject test cannot be viewed in isolation from the impetus for its very occurrence. Moreover, simply because the subject testing is related to a project which will span a number of years, does not render each individual part of the project separate from the whole. Insofar as the purpose of this specific dredging activity is to develop a tool, which will be used in connection with the exploration, development and production of resources from the OCS, the dredging as described in the facts would be a violation of 46 U.S.C. § 55109.
HOLDING
The proposed dredging on the OCS using a foreign-built vessel violates 46 U.S.C. § 55109.
Sincerely,
Lisa L. Burley
Chief/Supervisory Attorney-Advisor
Cargo Security, Carriers and Restricted Merchandise Branch
Office of International Trade, Regulations and Rulings
U.S. Customs and Border Protection