VES-3-RR:IT:EC 114803 GOB
Herbert M. Lord, Esq.
Curtis, Mallet-Prevost, Colt & Mosle LLP
101 Park Avenue
New York, New York 10178-0061
RE: 46 U.S.C. App. 883; Coastwise transportation; 19 CFR 4.80b(a)
Dear Mr. Lord:
This is in response to your letter of August 27, 1999 on behalf of Glencore, Ltd. with respect to the applicability of 46 U.S.C. App. 883.
FACTS:
You describe the pertinent facts as follows:
The ZAGARA, a vessel operating under the Maltese flag, loaded our client’s cargo at Nigeria, for discharge and delivery to its customer at the Valero refinery in Corpus Christi. The vessel arrived at anchorage at Corpus Christi but was not permitted to proceed to discharge or to sail because of certain Solas violations. The vessel was permitted to move to the Berry dock at Corpus Christi, where efforts are now underway in collaboration with the Coast Guard to rectify the Solas violations sufficient to enable the vessel to depart the port. The customer will not permit the ZAGARA to discharge at the Valero Terminal because of environmental concerns. Accordingly, when the vessel is authorized to depart the port, it is intended to order the vessel to proceed beyond the two-mile limit and offload the cargo into another foreign flag vessel, which will then return to Corpus Christi and discharge the cargo at the Valero Terminal.
ISSUE:
The applicability of 46 U.S.C. App. 883 to the above-stated facts.
LAW AND ANALYSIS:
Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. A vessel that is built in, documented under the laws of, and owned by citizens of the United States, and which obtains a coastwise endorsement from the U.S. Coast Guard, is referred to as "coastwise-qualified."
The coastwise laws generally apply to points in the territorial sea, which is 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.
46 U.S.C. App. 883, the coastwise merchandise statute 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 a vessel built in, documented under the laws of, and owned by citizens of the United States. Equipment and supplies of the transporting vessel are not considered “merchandise” for this purpose.
19 CFR 4.80b(a) provides in pertinent part that a coastwise transportation of merchandise takes place when merchandise laden at a point embraced within the coastwise laws is unladen at another coastwise point, regardless of the origin or ultimate destination of the merchandise.
Assuming that the transfer of merchandise from the Maltese-flag vessel to the second foreign-flag vessel occurs beyond the three-mile territorial sea line (i.e., on the high seas), the proposed activity would not be violative of 46 U.S.C. App. 883 because there would be no lading of merchandise at a coastwise point. The merchandise was laden on the Maltese-flag vessel in Nigeria and would be laden upon the second foreign-flag vessel at a point on the high seas, i.e., beyond the three-mile territorial sea limit.
HOLDING:
The proposed activity would not be violative of 46 U.S.C. App. 883 because there would be no lading of merchandise at a coastwise point.
Sincerely,
Jerry Laderberg
Chief,
Entry Procedures and Carriers Branch