VES-3 CO:R:P:C 109831
Harold K. Watson, Esq.
Liddell, Sapp, Zivley, Hill & LaBoon
Texas Commerce Tower
Houston, Texas 77002
RE: Request for Ruling on "Coastwise Trade"
Dear Mr. Watson:
This is in reference to your letter of October 24,
1988, requesting a ruling as to whether certain
floating cranes would be permitted to engage in stevedoring
activities in the United States.
FACTS:
Your client, a U.S. corporation, wishes to purchase
two floating cranes for use in the United States. These
cranes were built in the United States and subsequently
sold to non- U.S. interests for use in stevedoring
operations in a foreign country. The subject cranes would
not be used to transport cargo. Rather, they would remain
stationary while loading and unloading bulk cargoes from
ship to shore or from shore to ship.
ISSUE:
Whether the use of U.S.-built, foreign-owned floating
cranes subsequently sold to a U.S. corporation for
stevedoring operations in the United States would be
prohibited by 46 U.S.C. App. 883.
LAW AND ANALYSIS:
Title 46, United States Code Appendix, section 883 (46
U.S.C. App. 883), 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. As interpreted by
the Customs Service, section 883 also prohibits the
engagement in the coastwise trade by any vessel which had
the right to engage in the coastwise trade but was sold
foreign, in whole or in part, or was placed under foreign
registry.
The Customs Service has long held that the use of a
non-coastwise-qualified crane vessel to load and unload
cargo is not coastwise trade and does not violate 46 U.S.C.
App. 883, provided, that any movement of the merchandise is
effected exclusively by the operation of the crane and not
by movement of the vessel, except for necessary movement
which is incidental to a lifting operation while it is
taking place. However, movement of merchandise while it is
suspended from the crane, even between two points within a
harbor, which is effected by a movement of the vessel which
is neither necessary nor incidental to a lifting operation
by the crane would constitute coastwise transportation of
merchandise within the purview of 46 U.S.C. App. 883.
Accordingly, the use of the non-coastwise-qualified
floating cranes as described above, would not violate the
coastwise laws, assuming that no part of the movement of
the bulk cargoes being loaded or unloaded is effected by a
movement of the floating cranes which is neither necessary
nor incidental to the lifting operation by the cranes.
HOLDING:
The use of U.S.-built, foreign-owned floating cranes
subsequently sold to a U.S. corporation for stevedoring
operations in the United States would not be prohibited by
46 U.S.C. App. 883, provided, that no part of the movement
of the bulk cargoes being loaded or unloaded is effected by
a movement of the crane vessels which is neither necessary
nor incidental to the lifting operations by the cranes.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch