VES-10-01 CO:R:P:C 110391 BEW
Mr. Richard B. Fairbanks
Titan Maritime Industries Inc.
3305 Southeast 14th Avenue
Fort Lauderdale, Florida 33316
RE: Applicability of the salvage law (46 U.S.C. App. 316(d)) to
the use of a United States-flag, non-coastwise-qualified jackup
barge for salvage in Puerto Rican waters.
Dear Mr. Fairbanks:
This is in response to your request for clarification of our
ruling HQ 110319 PH in which we ruled that a United States-flag,
non-coastwise-qualified jackup barge may be used for salvage
operations in the territorial waters of Puerto Rico because the
coastwise salvage statute (46 U.S.C. App. 316(d)) is not
applicable in Puerto Rican waters, and the prohibition in that
provision applies only to "foreign vessels."
FACTS:
The facts presented in your original request indicate that
you would be using a jackup barge to remove the wreck of the
passenger ferry A. REGINA, which your company owns, from a reef
400 meters off the southeast coast of Mona Island, Puerto Rico.
The principle piece of salvage equipment is a 10 legged jackup
barge which you state is documented under the United States flag
but is not coastwise-qualified.
You are now asking whether the jack-up barge can be used as
a work platform to lay pipe or clean-up a harbor.
ISSUE:
May a United States-flag, non-coastwise-qualified jackup
barge be used as a work platform to lay pipe or clean-up a harbor
in the territorial waters of Puerto Rico?
LAW AND ANALYSIS:
Generally, the coastwise laws (e.g., 46 U.S.C. App. 289 and
883, and 46 U.S.C. 12106 and 12110) 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 and documented under the laws of the United
States, and owned by persons who are citizens of the United
States.
Under the provisions of 46 U.S.C. App. 289, no foreign
vessel shall transport passengers between ports or places in the
United States, either directly or by way of a foreign port. The
penalty for violating this section of the law is $200 for each
passenger so transported and landed.
Pursuant to 46 U.S.C. 12106 and 12110 and their
predecessors (46 U.S.C. 65i and 65m and, before them, 46 U.S.C.
11) and consistent with 46 U.S.C. App. 883, the coastwise
merchandise law, the Customs Service has consistently held that
the prohibition in 46 U.S.C. App. 289, applies to all non-
coastwise-qualified vessels. Non-coastwise-qualified vessels
include any vessel other than a vessel built in, properly
documented under the laws of, owned by citizens of the United
States, and never sold foreign with certain exceptions (46
U.S.C. 12106(a)(2)(B) a 19 CFR 4.80(a)(2) and (3)).
In interpreting the coastwise laws as applied to the
transportation of passengers, we have ruled that the carriage of
passengers entirely within territorial waters, even though they
disembark at their point of embarkation and the vessel touches no
other point, is considered coastwise trade subject to the
coastwise laws.
A point in United States territorial waters is considered a
point in the United States embraced within the coastwise laws
but a point beyond those waters, even if it is within the United
States Exclusive Economic Zone (EEZ), is not considered to be
such a point, with certain exceptions inapplicable in this
context (see, e.g., the Outer Continental Shelf Lands Act of
1958, as amended; 43 U.S.C. 1333, and the amendments to 46
U.S.C. App. 883 regarding the transportation of valueless or
dredged material effected by Public Law 100-329).
Paragraph (d) of the Act of June 11, 1940, as amended (46
U.S.C. App. 316(d)), provides, in pertinent part, that:
No foreign vessel shall, under penalty of forfeiture,
engage in salvaging operations on the Atlantic or
Pacific coast of the United States, in any portion of
the Great Lakes or their connecting or tributary
waters, including any portion of the Saint Lawrence
River through which the international boundary line
extends, or in territorial waters of the United States
on the Gulf of Mexico, except when authorized by a
treaty or in accordance with the provisions of [46
U.S.C. App. 725] ....
It has long been the position of the Customs Service that
although the coastwise laws pertaining to the transportation of
merchandise and passengers and to towing are applicable to Puerto
Rico (see 48 U.S.C. 744 and 46 U.S.C. App. 877), the coastwise
salvage statute is not applicable to the waters of Puerto Rico
(see rulings dated June 10, 1974, and March 8, 1985 (File Numbers
100949 and 107038). Further, we note that although these other
coastwise laws prohibit the use of any vessel other than a United
States built, owned, and documented vessel in the transportation
of merchandise and passengers or in towing, the prohibition in
the salvage statute is applicable only to a "foreign vessel."
Accordingly, the salvage statute would not prohibit the use
of the United States-flag non-coastwise-qualified jackup barge
under consideration for the described salvaging operations in the
waters of Puerto Rico. However, as required by the coastwise
merchandise and passenger laws referred to above, any
transportation of merchandise or passengers to and from the
jackup barges would be by coastwise-qualified vessels. With
regard to possible temporary movement of the jackup barge, the
coastwise laws would not prohibit such a movement if, as you
state, no merchandise or passengers are removed from the jackup
barge until it is returned to the same position at which the
merchandise or passengers were loaded onto or boarded the vessel
(see 19 CFR 4.80(a) and Shipbuilders Council of America v.
United States, 868 F.2d 452 (D.C. Cir. 1989)). Any towing of the
jackup barge between coastwise points would, of course, be
required to be by a coastwise-qualified vessel.
With respect to the barge being used for pipe laying, the
Customs Service has held that the sole use of a vessel in laying
pipe is not considered a use in the coastwise trade of the United
States, even when the pipe is laid between two points in the
United States embraced within the coastwise laws. Further, since
the use of a vessel in pipe-laying is not a use in the coastwise
trade, a non-coastwise-qualified vessel may carry pipe which it
is to lay between such points. It is the fact that the pipe is
not landed as cargo but only paid out in the course of the laying
operation which makes such operation permissible.
The movement of the barge, with its crew, equipment and
stores, from one point embraced within the coastwise laws of the
United States to another such point would not be considered
coastwise trade provided the barge does not take on board
passengers or merchandise at one such point and discharge the
passengers or merchandise at another such point. Crewmembers,
including technicians necessary to assist in the vessel's
pipelaying operation, are not considered passengers under section
289, nor are the construction company personnel and employees of
the various subcontractors who are on the barge in connection
with its business. However, persons transported on the barge
between points embraced within the coastwise laws who are not
connected with the operation, navigation, ownership, or business
of the barge are subject to section 289. Legitimate equipment
and stores of the barge for its use, including pipe laden on
board to be paid out in the course of operations, are not
considered merchandise covered by section 883. However, articles
transported on the barge between points embraced within the
coastwise laws which are not legitimate stores and equipment of
the barge are subject to section 883.
With respect to the barge being used as a stationary work
platform to clean up the harbor, there is no law administered by
Customs that would prohibit such an operation.
HOLDING:
A United States-flag, non-coastwise-qualified jackup barge
may be used for salvage operations in the territorial waters of
Puerto Rico because the coastwise salvage statute (46 U.S.C.
App. 316(d)) is not applicable in Puerto Rican waters and the
prohibition in that provision applies only to "foreign vessels."
The use of a United States-flag, non-coastwise-qualified
jackup barge for pipelaying in the territorial waters of the U.S.
would not constitute coastwise trade and is in no way prohibited
by the laws and regulations administered by the Customs Service.
A United States-flag, non-coastwise-qualified jackup barge
may be used as a stationary work platform to clean up a harbor
without violating Customs and navigation laws.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch