VES-3-01-RR:IT:EC 114305 GEV
Terrence B. Price
Secretary Treasurer
Robert E. Landweer & Co., Inc.
911 Western Avenue, Suite 208
Seattle, Washington 98104
RE: Coastwise Trade; Cable-Laying; Vessel Equipment; 46 U.S.C.
App. 883
Dear Mr. Price:
This is in response to your letter dated March 23, 1998,
regarding the proposed use of a foreign-flagged vessel in a
cable-laying operation in Alaska. Our ruling in this matter is
set forth below.
FACTS:
A local company represented by Robert E. Landweer & Co.,
Inc., has been awarded a cable-laying contract in Alaska. In
connection with this contract the company has chartered a
Panamanian-flagged cable-laying vessel.
The current program calls for the vessel to arrive at Morgan
City, Louisiana, where the charter will start. In Morgan City
the vessel will load cable-handling equipment and tools necessary
for the loading of cable. Upon completion of this loading the
vessel will sail to South Hampton, England, to load the cable.
This loading can only be done with the cable-handling equipment
placed on the vessel in Morgan City.
Upon completion of the cable loading, the vessel will
proceed to Seattle, Washington, where the balance of the cable-handling equipment will be loaded onto the vessel. The vessel
will then proceed to Alaska to lay cable between Skagway, Alaska,
and Haines, Alaska. There will be no dredging operations
performed in connection with the cable-laying. Upon completion
of the job, any excess cable (expected to be a small amount) will
be offloaded in Skagway.
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The vessel will then proceed back to Seattle where the
equipment loaded at Seattle will be offloaded at the same pier
where it was loaded. The equipment loaded in Morgan City will
also be offloaded at Seattle. At this time the vessel will come
off charter and depart the United States.
ISSUES:
1. Whether the use of a foreign-flagged vessel to lay cable
between coastwise points constitutes a violation of 46 U.S.C.
App. 883.
2. Whether the unlading of cable-laying equipment by a
foreign-flagged cable-laying vessel at a coastwise point other
than the one at which it was laded constitutes a violation of 46
U.S.C. App. 883.
3. Whether the unlading of foreign-laded excess cable by a
foreign-flagged cable-laying vessel at a coastwise point
constitutes a violation of 46 U.S.C. App. 883.
LAW AND ANALYSIS:
Title 46, United States Code Appendix, 883 (46 U.S.C. App.
883, the merchandise coastwise law often called the "Jones
Act"), 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 one that is
coastwise-qualified (i.e., U.S.-built, owned and documented).
Pursuant to title 19, United States Code, 1401(c) (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."
The coastwise laws generally apply to points in the
territorial sea, 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
cases where the baseline and the coastline differ.
With respect to the laying of cable, the Customs Service has
held that the sole use of a non-coastwise-qualified vessel to lay
cable between points in the United States or in international
waters does not violate 46 U.S.C. App. 883. The rationale for
this holding is that such cable is not only laid, and not
"transported," between points in the United States, but it is
also being used in furtherance of the primary mission of the
cable-laying vessel and is therefore similar to vessel equipment.
(Customs ruling letter 110402, dated April 18, 1989)
As noted above, vessel equipment is not included within the
general meaning of merchandise for purposes of 46 U.S.C. App.
883. Vessel equipment has been defined as articles,
"...necessary and appropriate for the navigation, operation or
maintenance of the vessel and for the comfort and safety of the
persons on board." (Treasury Decision (T.D.) 49815(4), dated
March 13, 1939) Customs has specifically ruled that, "Vessel
equipment placed aboard a
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vessel at one United States port may be removed from the vessel
at another United States port at a later date without violation
of the coastwise laws." (Customs ruling letter 102945, dated
November 8, 1978) Decisions as to whether a given article comes
within the definition of "vessel equipment" are made on a case-by-case basis.
In regard to equipment used by a cable-laying vessel during
the course of a cable-laying operation, Customs has held that
such equipment may be laden on a vessel at a coastwise point and
used by the vessel for reasons relating to the operation of the
vessel may later be unladen at a second coastwise point without
violation of 46 U.S.C. App. 883. Such equipment is not only
"vessel equipment" as defined above, its use aboard the vessel
between United States points is considered to break the
continuity of the transportation between coastwise points.
(Customs ruling letters 109054, dated August 4, 1987)
As for the excess cable in question, since it was laded
foreign (South Hampton, England), the fact that it is to be
unladed at a coastwise point (Skagway, Alaska) is of no
consequence for purposes of this ruling. There is no coastwise
movement, consequently no violation of 46 U.S.C. App. 883 would
arise as a result of its being unladed at Skagway.
HOLDINGS:
1. The use of a foreign-flagged vessel to lay cable between
coastwise points does not constitute a violation of 46 U.S.C.
App. 883.
2. The unlading of cable-laying equipment by a foreign-flagged cable-laying vessel at a coastwise port other than the
one at which it was laded does not constitute a violation of 46
U.S.C. App. 883.
3. The unlading of foreign-laded excess cable by a foreign-flagged cable-laying vessel at a coastwise point does not
constitute a violation of 46 U.S.C. App. 883.
Sincerely,
Jerry Laderberg
Chief
Entry Procedures and Carriers
Branch