VES-3-RR:BSTC:CCI H100098 GOB
Vince Addington
Vice President, Marketing
Joseph Tabisola
District Manager
General Steamship Corporation
21905 64th Avenue W, Suite 301B
Mountlake Terrace, WA 98043
RE: 46 U.S.C. §§ 55102, 60105; 19 U.S.C. §§ 1433, 1434, 2071 note; 19 CFR § 18.25; Transshipment of Merchandise; Report of Arrival; Vessel Entry; Clearance; Advance Cargo Information; Immediate Exportation
Dear Messrs. Addington and Tabisola:
This is in response to your correspondence of March 31, 2010 and April 13, 2010 concerning the transshipment of cargo between two vessels in United States waters. Our ruling is set forth below.
FACTS:
You represent a vessel operator that has inquired with respect to the following scenario. A foreign-flag, Panamax-sized vessel (the “Panamax vessel”), either in ballast or with some foreign cargo onboard, will arrive in the territorial waters of the United States and go to anchor. A foreign-flag, self-unloading bulk carrier (the “self-unloader”) will transport coal from a Canadian load port to the Panamax vessel in United States territorial waters. The self-unloader will not drop its anchor but will attach itself to the anchored Panamax vessel in order to avoid fouling anchor chains. The coal will be transshipped from the self-unloader to the Panamax vessel using the equipment of the self-unloader. After the transshipment of the coal, the Panamax vessel will depart for a foreign location where the coal will be unladen. The self-unloader will also depart for a foreign location.
You inquire with respect to the applicability of the Jones Act to the transshipment operation, the requirements for entrance and clearance of the vessels, and reporting the cargo activity to U.S. Customs and Border Protection (“CBP”).
ISSUE:
What is the application of the Jones Act and the customs laws to the proposed transshipment of coal in U.S. waters?
LAW AND ANALYSIS:
Coastwise Transportation
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.
Title 46, United States Code, § 55102 (46 U.S.C. § 55102), the coastwise merchandise statute often called the “Jones Act,” provides in part that a vessel may not provide any part of the transportation of merchandise by water, or by land and water, between points in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade and has been issued a certificate of documentation with a coastwise endorsement under chapter 121 of title 46 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement.
You state that the self-unloader and the Panamax vessel will move from Canada to a point in U.S. territorial waters, where coal will be transferred from the self-unloader to the Panamax vessel. The coal that will be transshipped will originally be laden on the self-unloader in Canada. After the coal is transshipped to the Panamax vessel, that vessel will move to a foreign location where the coal will be unladen. The self-unloader will also proceed foreign.
This transportation of coal is not subject to the prohibition of 46 U.S.C. § 55102 because the coal is not being transported between points in the United States. Rather, the coal is being transported from Canada to a U.S. location (the transshipment point), where it will be transferred by the self-unloader to the Panamax vessel, which will subsequently transport the coal to its foreign destination. This is not a “coastwise movement” within the meaning of 46 U.S.C. § 55102. Therefore, the movement of the coal as described above may be accomplished by the self-unloader and Panamax vessels.
Report of Arrival, Vessel Entry, and Clearance
Title 19, United States Code, § 1433 (19 U.S.C. § 1433) provides, in pertinent part, that immediately upon the arrival of any vessel from a foreign port or place, the master of the vessel shall report the arrival of the vessel at the nearest customs facility or such other place as the Secretary may prescribe by regulation. See also section 4.2, CBP Regulations (19 CFR § 4.2).
Section 4.0(f), CBP Regulations (19 CFR § 4.0(f)) provides that “[t]he phrase ‘arrival of a vessel’ means that time when the vessel first comes to rest, whether at anchor or at a dock, in any harbor within the Customs territory of the U.S.”
Title 19, United States Code, § 1434 (19 U.S.C. § 1434) provides, in pertinent part, that after the arrival of any vessel from a foreign port or place, the master of the vessel shall make formal entry of the vessel at the nearest customs facility or such other place as the Secretary may prescribe by regulation. Section 4.3(a), CBP Regulations (19 CFR § 4.3(a)) provides that such entry is required to be made within 48 hours after the arrival of the vessel at any port or place in the U.S.
Title 46, United States Code, § 60105 (46 U.S.C. § 60105) provides, in pertinent part, that a foreign vessel shall obtain clearance before proceeding from a port or place in the United States for a foreign port or place, for another port or place in the United States, or for a place outside the territorial sea to visit a hovering vessel or to receive or deliver merchandise while outside the territorial sea. See also 19 CFR § 4.60.
When the self-unloader and the Panamax vessel “arrive” in the United States per 19 CFR § 4.0(f), both vessels are required to report their arrival to CBP pursuant to 19 U.S.C. § 1433 and 19 CFR § 4.2. They must also make formal vessel entry pursuant to 19 U.S.C. § 1434 and 19 CFR § 4.3. When the Panamax vessel departs the U.S. transshipment location for its foreign destination, it is required to obtain clearance pursuant to 46 U.S.C. § 60105 and 19 CFR § 4.60. When the self-unloader departs the U.S. transshipment location for a foreign destination, it also is required to obtain clearance pursuant to 46 U.S.C. § 60105 and 19 CFR § 4.60.
Title 19, United States Code, § 2071 note (19 U.S.C. § 2071 note) authorizes the requirement to transmit cargo information to CBP in advance of its arrival in, or departure from, the United States. Pursuant to 19 CFR § 4.7(b)(4), promulgated pursuant to 19 U.S.C. 2071 note, carriers of bulk cargo (such as coal) are exempt with respect to that cargo from the requirement set forth in 19 CFR § 4.7(b)(2) that cargo declaration information be transmitted to CBP 24 hours before such cargo is laden aboard the vessel at a foreign port. However, any carrier of bulk cargo exempt from this requirement must transmit its cargo declaration information to CBP 24 hours prior to arrival in the United States for voyages that exceed 24 hours in sailing time and at the time of sailing for voyages of less than 24 hours. This information must be submitted to CBP electronically via the Vessel Automated Manifest System. Pursuant to 19 CFR § 4.30(n)(1), the CBP port director will not approve a permit to unlade (CBP Form 3171) until CBP has received the advance electronic cargo information. Consequently, the self-unloader must comply with the aforementioned requirements.
In addition, there must be compliance with the requirement to transmit electronic information for outward cargo in advance of departure. These requirements are found at the following website: http://www.census. gov/foreign-trade/aes/mandatory/index.html.
Merchandise Entry
All merchandise imported into the United States is required to be entered, unless specifically excepted. See 19 CFR § 141.4. It is also subject to duty or exempt thereof as provided for by the Harmonized Tariff Schedule of the United States (“HTSUS”). General Note 1, HTSUS. The term “importation” is generally defined as “the bringing of goods within the jurisdictional limits of the United States with the intention to unlade them.” See Henry Hollander Co. v. United States, 22 C.C.P.A. 645, 648 (1935) (citing United States v. Field & Co., 14 Ct. Cust. App. 406, 407 (1927) and cases cited therein); and Customs Service Decision (“C.S.D.”) 89-39. Merchandise arriving on a vessel is deemed imported on “the date on which the vessel arrives within the limits of a port in the United States with intent then and there to unlade such merchandise.” See United States v. Commodities Export Co., 14 CIT 166, 169, 733 F. Supp. 109 (1990) (citing 19 CFR § 101.1).
When the self-unloader arrives within the limits of a port in the United States, the coal is considered to be imported as it has been brought within the jurisdictional limits of the United States with the intention to unlade the coal onto the Panamax vessel. See HQ 113985, dated August 1, 1997, where CBP held that an importation occurred where cable arrived on a vessel from a foreign country, the vessel came within the limits of a United States port, and the cable was unladen onto a second vessel. See also C.S.D. 89-39, where CBP held that “[f]oreign-origin goods which arrive at a United States port aboard a foreign-flag vessel and are there loaded onto a United States-flag vessel bound for a United States-flag fishing vessel on the high seas are imported for duty purposes.” Because the coal in the proposed scenario will be imported, and is not exempted from entry pursuant to 19 CFR § 141.4(b), it is subject to the filing of an entry pursuant to 19 CFR § 141.4(a). The immediate exportation procedures set forth in 19 CFR § 18.25 are available.
HOLDINGS:
1. The proposed transshipment operation is not subject to the prohibition of 46 U.S.C. § 55102 because the coal is not being transported between points in the United States. Therefore, the transportation of the coal may be accomplished by the non-coastwise-qualified self-unloader and the non-coastwise-qualified Panamax vessel.
2. The self-unloader and the Panamax vessel are required to report arrival (19 U.S.C. § 1433), make vessel entry (19 U.S.C. § 1434), and obtain clearance (46 U.S.C. § 60105), as described above.
3. The coal that is transshipped at a point in United States territorial waters from the self-unloader to the Panamax vessel is imported into the United States. It is subject to the filing of an entry pursuant to 19 CFR § 141.4. The immediate exportation procedures set forth in 19 CFR § 18.25 are available. The coal is also subject to the required advance electronic transmission of cargo information pursuant to 19 U.S.C. § 2071 note, as described above.
Sincerely,
Glen E. Vereb
Chief
Cargo Security, Carriers, and Immigration Branch