VES-3-02-OT:RR:BSTC:CCR H311602 AMW
Mr. Constantine G. Papavizas, Esq.
Winston & Strawn LLP
1901 L Street, NW
Washington, DC 20036
RE: Coastwise Transportation; Undersea Cable Laying; 46 U.S.C. § 55102; 46 U.S.C. § 55109; 19 CFR § 4.80b; Outer Continental Shelf Lands Act; 43 U.S.C. § 1333(a)(1).
Dear Mr. Papavizas:
This letter is in response to your June 9, 2020, ruling request on behalf of your client [ ] regarding whether certain activities related to the installation of electric transmission cable by a non-coastwise-qualified vessel would violate the coastwise laws. Our decision follows.
FACTS
The following facts are from your ruling request and supporting information submitted on June 26, 2020, July 2, 2020, July 8, 2020, August 11, 2020, August 17, 2020, and March 10, 2022. The subject non-coastwise-qualified [ ] (the “Cable Lay Vessel” or “CLV”), deploying a specialized piece of equipment, will both create a fluidized path for and subsequently place and install two electric cables on the seabed in U.S. territorial waters and along the seabed of the outer continental shelf (“OCS”) off the coast of the U.S. state of [ ]. You have provided a complete list of coordinates for the subject cable route, which will run from a landfall point in [ ] to an offshore wind energy platform on the OCS off of [ ].
The first phase of your proposal is described as a “pre-rip” preparatory operation in which the non-coastwise-qualified [ ] (the “Cable Lay Vessel” or “CLV”), deploying a specialized piece of equipment, will fluidize the seabed along the path that the subject cable will be placed. During this stage, the CLV will utilize a water jet sled [ ] (the “Water Jet Sled”), which will be dragged along the seabed to fluidize the subsea path in which the cable will be placed. In doing so, the Water Jet Sled will create space to bury the cable at a depth of between 1.2 meters to 8 meters while the width of the path will vary between 0.5 to 1 meter, dependent on soil condition. The Water Jet Sled will use pressurized water jets to fluidize the seabed, functioning without the use of a mechanical plow or cutter to create a trench.
In the second phase, the subject cables will be placed on the seabed along the fluidized path created during the “pre-rip” stage. To start, the cable will be laden on board the CLV in Germany or Sweden and transported to U.S. territorial waters. At the beginning of this phase, the CLV will situate itself near the cable’s landfall point and launch the Water Jet Sled from its stern. At this time, the CLV will also deploy either a remotely operated vehicle, divers, or its own crane to retrieve a “messenger wire” that will be used to bring the pull-in wire from shore to the CLV. The CLV will then proceed along the cable’s path placing the subject cable along the seabed, utilizing the Water Jet Sled to simultaneously place the cable and further enhance the seabed path.
While placing the cable, the CLV will periodically conduct “remedial post-burial work” at locations at which the cable crosses third-party assets or other areas where the cable cannot be buried utilizing the Water Jet Sled. At these locations, the CLV will raise the Water Jet Sled to its deck and deploy either the [ ]. Each of these devices is a free-hanging jetting tool that operates from the CLV’s stern crane, employing water pressure jets to fluidize the seabed to bury the cable without the use of a mechanical plow or cutter. The above-described process will be repeated for the installation of the second cable.
Although the “pre-rip” and cable placement phases will occur in 2023 or 2024, the platform to be serviced by the cable may not be installed for up to two years after this operation. As such, you have clarified that the cable placement stage of the operation is intended to attach one cable end to shore and the other near the future platform site, where the cable will remain in “temporary storage” until the platform is eventually completed. Specifically, you state that “the cable end is planned to be temporary [sic] laid down on the seabed for temporary storage waiting for the platform to be installed in its final position.”
The third phase of your proposal, described as the “late pull-in operation,” will occur when the cable is eventually connected to the finished platform. According to your submission, the CLV will perform the following steps to complete the late pull-in operation:
Lower a cable quadrant to the seabed (i.e., a half-circle-shaped device used to hold and move submarine cable);
Hook a crane wire to the end of the submarine cable end;
Lift the cable end from the seabed while maneuvering into position for the cable to enter the cable quadrant;
Move the cable end to the platform entrance and lower it to the seabed;
The platform’s winch wire is connected to the cable end and the CLV’s crane wire is disconnected from the cable end;
The CLV transits to the cable quadrant and hooks its crane wire to the quadrant;
The CLV’s crane lifts the quadrant with the cable hanging down on either side of the quadrant;
The platform’s winch pulls in the cable end to the platform while the CLV’s crane lowers the cable quadrant to the seabed;
The CLV retrieves the cable quadrant to its deck and departs from the installation site.
Finally, you state that the CLV or a yet-to-be-named foreign-flagged vessel may conduct inspection and repairs on the submarine cable as necessary. If inspection and repair is needed, you note that it would involve the following steps:
De-burial of the cable using an [ ] type of water jetting tool;
Cutting the unburied portion of cable;
Lifting one of the cable ends and sealing it to prevent water ingress and laying it back on the seabed;
Lifting the other cable end to the vessel’s deck, cutting away the damaged portion, and splicing in replacement cable;
Laying down the splice with the new cable part’s first end and the second end still on the vessel;
Lifting up the first end of the existing cable from the seabed and splicing it to the new cable part;
Laying down the replacement cable, which will be paid out from a cable spool or similar device, on the seabed in a bight; and
Burying the cable using an [ ] type of water jetting sled.
You have also clarified that any replacement cable will be laded from a “spare part location” situated on the east coast of the United States. In addition, any damaged cable raised by the vessel will be disposed of at a foreign port.
ISSUES
Whether the use of the Water Jet Sled, [ ] to create a path along the seabed in which to unlade the cable constitutes a violation of 46 U.S.C. § 55109?
Whether the cable placement, late pull-in, and repair operations by a non-coastwise-qualified vessel violate the Jones Act, 46 U.S.C. § 55102?
LAW AND ANALYSIS
Generally, the coastwise laws prohibit the transportation of merchandise or passengers 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. Such a vessel, after it has obtained a coastwise endorsement from the U.S. Coast Guard, is said to be “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. In addition, Section 4(a)(1) of the Outer Continental Shelf Lands Act of 1953 (“OCSLA”), as amended by The William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, H.R. 6395, 116th Cong. § 9503 (2021), provides that the Constitution and laws and civil and political jurisdiction of the United States are extended to:
the subsoil and seabed of the outer Continental Shelf;
all artificial islands on the outer Continental Shelf;
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, including non-mineral energy resources; or
any such installation or other device (other than a ship or vessel) for the purpose of transporting or transmitting such resources.
(Emphasis added).
Accordingly, the OCSLA, as amended in 2021, extends U.S. jurisdiction to devices attached to the seabed of the OCS for the purpose of producing wind energy, such as the wind energy platform contemplated in the present matter.
Issue One: Whether the Creation of the Cable Pathway Violates 46 U.S.C. § 55109
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—
(1) the vessel is wholly owned by citizens of the United States for purposes of
engaging in the coastwise trade;
(2) 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.” See HQ 103692 (Dec. 28, 1978, published as Customs Service Decision (C.S.D.) 79-331); HQ 109108 (Nov.13, 1987); HQ 109910 (Jan. 26, 1989 published as C.S.D. 89-64). In contrast, with respect to the use by cable-laying vessels of cable-burial devices employing a jetting action resulting in the emulsification of the seabed surrounding the cable, Customs has also long held that such an operation does not constitute an engagement in “dredging” for the purposes of the aforementioned statute. See, e.g., HQ 115646 (Apr. 12, 2002). Specifically, CBP has reasoned that the use of a jetting tool to “temporarily lift” a “narrow ‘slice’” of the seabed amounts to a “temporary manipulation of the seabed” as opposed to the creation of a furrow or trench by operation of a share or plow and disc cutting wheel. See HQ 109412 (Mar. 29, 1988), published at C.S.D. 88-7.
In the present matter, you state that the Water Jet Sled, which will be used to create the initial pathway for the cable and to enhance the path while the cable is being laid, will fluidize the seabed by use of pressurized water jets without the use a mechanical plow or cutter. Similarly, the [ ], which you state will be used to conduct “remedial post-burial work,” are free-hanging jetting tools operating from the CLV’s stern crane. Once again, these devices utilize water pressure jets to fluidize the seabed without the use of a mechanical plow or cutter. This activity, as ruled in HQ 115646 (Apr. 12, 2002), is therefore not within the ambit of 46 U.S.C. § 55109. Accordingly, the proposed operation does not constitute dredging for the purposes of 46 U.S.C. § 55109.
Issue Two: Whether the Cable Placement, Late Pull-in, and Repair Operations Violate the Jones Act, 46 U.S.C. § 55102
Next, we determine whether the proposed cable placement, late pull-in, and repair operations by the non-coastwise-qualified CLV violates the Jones Act. The Jones Act, 46 U.S.C. § 55102, provides in pertinent part:
Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not provide any part of the transportation of merchandise by water, or by land and water, between points in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel—
is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and
has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement.
Pursuant to 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, and monetary instruments as defined in section 5312 of Title 31.” For purposes of the Jones Act, merchandise also includes “valueless material.” 46 U.S.C. § 55102(a)(2). The CBP Regulations promulgated under the authority of 46 U.S.C. § 55102 provide that a coastwise transportation of merchandise takes place when merchandise laden at a coastwise point is unladen at another coastwise point, regardless of origin or ultimate destination. 19 CFR § 4.80b(a).
Cable Placement:
First, we find that the initial cable placement and storage operation does not constitute transportation under the Jones Act. CBP has long held that the sole use of a vessel in laying pipe or cable between two coastwise points is not considered a use in the coastwise trade of the United States. See, e.g., HQ 115431 (Sept. 4, 2001), HQ 115333 (Apr. 27, 2001). In doing so, CBP has reasoned those situations in which material is not landed as cargo but is only paid out in the course of the installation operation makes such operation permissible (i.e., “paid out/not unladen”). Further, since the use of a vessel in pipe or cable laying is not a use in the coastwise trade, a non-coastwise-qualified vessel may carry pipe or cable which is laid between such points by that vessel. However, the transportation of pipe or cable by any vessel other than the vessel that is laying pipe to a pipe-laying location at a point within U.S. territorial waters would be considered coastwise trade and would therefore have to be accomplished by a vessel meeting the statutory requirements entitling it to engage in such trade. See, e.g., HQ 114833 (Apr. 20, 2000).
In the present request, you state that the subject cable will be laded onto the CLV at a foreign location, either Sweden or Germany. As such, the direct transportation of the cable between a foreign location and a U.S. point (i.e., the portions of the cable path within U.S. territorial water) would not represent coastwise transportation within the Jones Act. Furthermore, to the extent the cable is laded at a U.S. point (e.g., via transfer to a vessel at a U.S. port or within U.S. territorial waters), your request nevertheless describes a scenario in which the subject cable will initially be “paid out” from a dedicated CLV onto the seabed of the U.S. territorial waters and OCS. As such, the proposed use of the non-coastwise-qualified CLV would not be in violation of the Jones Act, 46 U.S.C. § 55102.
“Late Pull-In” Operation
Second, we find that the “late pull-in” operation does not constitute coastwise trade. In relevant part, your request states that the cable will remain on the seabed in U.S. territorial waters as well as the OCS until the construction of the offshore platform, at which point the cable will be connected to the platform during the “late pull-in” operation. In this phase, the CLV will raise the cable from its resting point along the seabed, move it to the location of the offshore platform “while the cable end is in lifted position, and lower the cable back to the seabed.” To accomplish the installation, the CLV will lower a cable quadrant onto the seabed, hook the CLV’s crane wire to the cable end, maneuver to insert the cable into the quadrant, move the cable from its “temporary storage” position, and lower it to the seabed near the platform location where the cable will be connected to the platform and the quadrant will be raised and returned to the CLV.
CBP has previously confirmed that the movement of submarine cable to affect the repair, replacement, or installation of a section of cable does not constitute coastwise trade. See, e.g., HQ H311603 (Aug. 31, 2020). In HQ 113711 (Nov. 26, 1996), furthermore, CBP contemplated a situation in which an umbilical would be “cut to the proper length, then abandoned on the seabed, including some additional length, to allow for pulling up to the platform….” CBP determined that such an operation, including the initial “abandonment” and eventual cable pull in, would not violate the Jones Act because it still constituted a cable-laying operation. As a result, the movement of the subject cable to affect its attachment to further cable sections or to connect that cable to an offshore structure would not be in violation of the Jones Act, 46 U.S.C. § 55102.
Inspection and Repair
Third, with respect to the proposed inspection and repair operations, we find that this phase similarly does not constitute coastwise transportation of merchandise. CBP has previously held that the use of a work barge in repairing pipe is not a use in coastwise trade because there is “no distinction between repairing pipe and the laying of new pipe.” HQ 101925 (Oct. 7, 1976). CBP recently modified this holding, however, to clarify that, although pipe (or cable) repair operations may violate the Jones Act, no violation would occur if the materials used are “paid out, not unladen.” Customs Bulletin and Decisions, Vol. 53, No. 45 at 93 (Dec. 11, 2019). As outlined in the FACTS section above, any cable repair operations would involve the CLV or similar non-coastwise-qualified vessel raising the damaged section of cable, removing and replacing the damaged cable, and returning the repaired cable to its place on the seabed. If a section of cable is replaced, the replacement cable will be attached to the existing cable and paid out from a cable spool or similar mechanism on board the vessel onto the seabed. As such, this scenario represents a situation in which the repaired cable is “paid out” from the CLV onto the seabed. The proposed inspection, repair, and replacement of the subject cables therefore would not constitute transportation of merchandise under the Jones Act.
Based on the analysis above, we find that the proposed cable placement and “late pull-in” operations constitute transportation within the meaning of the Jones Act, 46 U.S.C. § 55102 and
19 CFR § 4.80b(a). In contrast, we find that the inspection and repair operation does not constitute transportation within the meaning of the Jones Act.
HOLDING
The use of a Water Jet Sled, [ ] to create fluidized paths for the underwater cables does not constitute dredging within the meaning of the Dredging Statute, 46 U.S.C. § 55109.
The proposed cable placement, “late pull-in,” and inspection/repair operations do not constitute coastwise trade within the meaning of the Jones Act, 46 U.S.C. § 55102 and 19 CFR § 4.80b(a).
Sincerely,
Lisa Burley
Chief/Supervisory Attorney-Advisor
Regulatory Reform and Priority Programs Branch
Office of Trade, Regulations and Rulings
U.S. Customs and Border Protection