VES-3-15-CO:R:IT:C 112387 BEW
Timothy B. Shea, Esq.
Nemirow, Hu, Kurt & Tankersley
1101 Connecticut Avenue, N.W.
Washington, D.C. 20036
RE: Coastwise Trade; Outer Continental Shelf; 46 U.S.C. App.
883; 43 U.S.C. 1333(a); Anchor-handling vessel; towing
Dear Mr. Shea:
This is in response to your letter dated July 21, 1992,
requesting a ruling regarding the applicability of 46 U.S.C. App.
883 (the "Jones Act") to the use of an anchor boat in lifting the
anchors of a semi-submersible drill rig off the ocean floor. Our
ruling on this matter is set forth below.
FACTS:
A semi-submersible drill rig constructed with the capacity
to moor in deep water and withstand rough conditions is moored on
the U.S. Outer Continental Shelf with several anchors arrayed
around the rig, each attached with more than 12,000 feet of chain
and rope. In unmooring the rig, a collar, attached to a metal
rope, is put around each anchor chain at the rig and then run down
to the submerged anchor. An anchor boat with a high horsepower
engine and a large winch capable of unseating the anchor lifts the
anchor off the bottom. The rig then reels in the anchor and anchor
chain and stores them on the rig. This process is repeated for
each anchor. Throughout this process the rig is stationary. The
anchor boat does not transport any cargo or equipment, including
anchors or chains, to or from the rig nor would it provide any
towing services to the rig. U.S.-flag vessels would be used to tow
the rig to a U.S. port and for other transportation services.
ISSUE:
Whether the use of an anchor-handling vessel to unmoor a
semi-submersible drill rig by lifting its anchors and anchor
chains from points on the Outer Continental Shelf in order
for the rig to reel them in for storage on board is
prohibited under the provisions of 46 U.S.C. App. 883.
LAW AND ANALYSIS:
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, in
pertinent part, 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 ....
For purposes of the coastwise laws, a point in United States
territorial waters is considered a point embraced within the
coastwise laws. The territorial waters of the United States
consist of the territorial sea, defined as the belt, 3 nautical
miles wide, adjacent to the coast of the United States and seaward
of the territorial sea baseline.
Section 4(a) of the Outer Continental Shelf Lands Act of
1953, as amended (67 Stat. 462; 43 U.S.C. 1333(a)) (OCSLA),
provides, in pertinent 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 there- from ... to
the same extent as if the outer Continental Shelf were
an area of exclusive Federal jurisdiction located
within a State.
Section 203 of the OCSLA Amendments of 1978 (92 Stat. 629,
635) (1978 Amendments), amended section 4(a) of the OCSLA by
substituting "... and all installations and other devices
permanently or temporarily attached to the seabed ..." for "...
and fixed structures ...." The purpose of this change was
stated in the legislative history to make it clear "... that
Federal law is to be applicable to all activities on all devices
in contact with the seabed for exploration, develop-
ment, and production." Thus, Federal law was intended "... to
be applicable to activities on drilling ships, semisubmersible
drilling rigs, and other watercraft, when they are connected to
the seabed by drillstring, pipes, or other appurtenances, on
the OCS for exploration, development, or production purposes."
(reproduced at 1978 U.S.C.C.A.N. 1450, 1534.) On the basis of the
1978 Amendments, we ruled that the coastwise laws extend to devices
such as a well casing with attendant accessory systems when
submerged into the seabed of the OCS (see C.S.D. 81-95).
Under these provisions, Customs has ruled that the coastwise
laws and other Customs and navigation laws are extended to mobile
oil drilling rigs during the period they are secured to or
submerged onto the seabed of the United States OCS. The same
principles have been applied to drilling platforms, artificial
islands, and similar structures attached to the seabed of the OCS
for the purpose of resource exploration operations, including
warehouse vessels anchored over the OCS when used to supply
drilling rigs on the OCS.
The Customs Service has ruled that the use of anchor
handling vessels in moving anchors for vessels located in the
United States territorial waters does not constitute coastwise
trade. We further ruled that the coastwise laws would not prohibit
the use of a foreign-flag anchor handling tug to move anchors for
crane vessels, whether the crane vessels were in waters over the
United States outer continental shelf or in territorial waters (See
106912 PH).
Accordingly, the use of the subject anchor-handling vessel
in the manner described above (i.e., to lift the rig's anchors and
anchor chains off the ocean floor whereby they are reeled in by the
drilling rig) would not be prohibited by 46 U.S.C. App. 883.
In the case under consideration, you indicate that the
drilling rigs will be towed by U.S. flag vessels. Section 316(a),
as amended by the Act of May 19, 1986 (Pub. L. 99-307 (46 U.S.C.
App. 316(a)), prohibits the towing between coastwise points of any
vessel except a vessel in distress, by any vessel other than a
vessel of the United States issued a certificate of documentation
with a coastwise or Great Lakes endorsement (see 46 U.S.C. App.
12106, 12107). This restriction extends to certain territories and
possessions of the United States, to towing between points within
the same harbor, and to direct, indirect, or partial towing
operations.
HOLDING:
The use of an anchor-handling vessel to unmoor a semi-
submersible drill rig by lifting its anchors and anchor chains from
points on the Outer Continental Shelf in order for the rig to reel
them in for storage on board is not prohibited under the provisions
of 46 U.S.C. App. 883.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch