VES 7-03 CO:R:IT:C 112074 BEW
John V. Esposito, Esquire
Esposito & Esposito
21 New Orleans Road
Hilton Head Island, South Carolina 29938
RE: Application of the dredge statute (46 U.S.C. App. 292) to
dredging in South Carolina.
Dear Mr. Esposito:
This is in reference to your letter dated January 14, 1992,
in which you inquire as to whether or not there are any
requirements that dredges must be built in the United States in
order to engage in, dredging operations in the United States.
FACTS:
You state that there is an increased interest in "beach
nourishment" in the United States. In South Carolina, an
extensive beach nourishment project has just been completed in
Hilton Head Island. You state that planning is now underway for
a maintenance program for beach nourishment. You state that
this will involve the pumping of sand from off shore on to the
beach. You ask whether a foreign-built dredge can be used for
this operation.
ISSUES:
Whether the use of a foreign-built dredge to dredge sand
from an off-shore point in South Carolina and pump it on to
the beach at Hilton Head Island, South Carolina, is
prohibited under 46 U.S.C. App. 292
LAW AND ANALYSIS:
Section 1 of the Act of May 24, 1906 (34 Stat. 204; 46
U.S.C. App. 292), provides that, "a foreign-built dredge shall
not, under penalty of forfeiture, engage in dredging in the
United States unless documented as a vessel of the United
States."
In our interpretation of 46 U.S.C. App. 292, we and our
predecessor in the administration of the navigation laws, the
Bureau of Marine Navigation, have consistently held that, under
46 U.S.C. App. 292, a foreign-built dredge (except those dredges
named in section 2 of the Act of May 28, 1906; see below) may not
engage in dredging in the United States whether or not documented
as a vessel of the United States. This is so because of the
historical background and legislative history of the Act of May
28, 1906. The provision was enacted as a result of controversy
which arose over the use of foreign-built dredges to repair
damage done by a hurricane at Galveston, Texas, in 1900. At the
time of the enactment of the provision, foreign-built vessels
could not be documented in the United States, unless captured in
war by citizens of the United States and lawfully condemned as
prize or adjudged to be forfeited for a breach of the laws of the
United States (section 4132, Revised Statutes). Thus, at the
time of enactment, the proviso in section 1 of the Act of May 28,
1906, "unless documented as a vessel of the United States," was
by itself, practically meaningless. However, section 2 of the
Act of May 28, 1906, provided:
That the Commissioner of Navigation is hereby
authorized to document as vessels of the United
States the foreign-built dredges Holm, Leviathan,
Nereus, and Triton, owned by American citizens and
now under construction abroad for use at
Galveston, on which an American citizen, the
contractor at Galveston, has an option.
Reading both sections together, it is clear that the proviso
in section 1, "unless documented as a vessel of the United
States," refers to the dredges which were authorized and directed
to be documented as vessels of the United States by section 2.
The legislative history of the Act confirms this interpretation
(see Cong. Rec. 7029 (1906)) and, stated above, the Act has
consistently been so interpreted by the agencies responsible for
its administration. Even though a foreign-built dredge may now
be documented as a vessel of the United States (see 46 U.S.C.
12102, 12105), it would be prohibited by 46 U.S.C. App. 292 from
engaging in dredging in the United States.
While the statute does not define dredging, other sources
offer helpful guidelines. The Florida Administrative Code, Rule
17-4.02(12) defines dredging as follows:
Dredging" is the "excavation" by any means, in
waters of the state....
...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. Gar-Con
Development v. State, 468 So. 2d 413 (Fla.
App. 1 Dist. 1985).
Customs has long held that dredging in United States
territorial waters, and certain dredging on the United States
Outer Continental Shelf outside territorial waters, is dredging
in the United States, for purposes of section 292.
The Customs Service has ruled that dredging, for purposes of
46 U.S.C. App. 292, means the use of a vessel equipped with
excavating machinery in digging up or otherwise removing
submarine material.
Giving the word "excavate" its common, plain and ordinary
meaning, the proposed dredging and pumping of sand operation
would be dredging in that the operation would be removing soil
from the seabed.
Given the foregoing definition, it is clear that the
proposed activity constitutes dredging so as to come within the
purview of 46 U.S.C. App. 292, as discussed above.
In conclusion, a foreign-built dredge may not engage in
dredging in the United States, including the islands in South
Carolina, whether or not documented as a vessel of the United
States.
The coastwise law pertaining to the transportation of
merchandise, section 27 of the Act of June 5, 1920, as amended
(41 Stat. 999; 46 U.S.C. App. 883, often called the Jones Act),
provides that:
No merchandise shall be transported by water,
or by land and water, on penalty of
forfeiture of the merchandise (or a monetary
amount up to the value thereof as determined
by the Secretary of the Treasury, or the
actual cost of the transportation, whichever
is greater, to be recovered from any
consignor, seller, owner, importer,
consignee, agent, or other person or persons
so transporting or causing said merchandise
to 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 other vessel 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 ....
Section 883 specifically provides that, for purposes of its
provisions, "merchandise" includes valueless material (Pub.L.
100-329; 102 Stat. 588). The transportation of valueless
material, whether or not it has commercial value, from a point or
place in the United States or point or place on the high seas
within the Exclusive Economic Zone (EEZ) as defined in the
Presidential Proclamation of March 10, 1983, to another point or
place in the United States or a point or place on the high seas
within that EEZ would also be prohibited under the provisions of
section 883.
Customs has held, however, that the use of a dredge in
effecting the movement of dredged material through a pipeline,
and not by movement of the dredge itself, is not considered
transportation of merchandise by the dredge between points within
the United States within the meaning of 46 U.S.C. App. 883 (See
ruling letters 101671 ML; 104541 PH; 106913 PH and 109056 GV).
HOLDING:
The use of a foreign-built dredge to engage in dredging in
the harbors and islands of South Carolina is prohibited
under 46 U.S.C. App. 292.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch