Mr. William N. Myhre
K&L Gates LLP
1601 K Street, NW
Washington, DC 20006
Dear Mr. Myhre:
This is in response to your May 18, 2021, letter on behalf of your client, Great Lakes Dredge & Dock, LLC (“GLDD”). GLDD appeals U.S. Customs and Border Protection (“CBP”) Headquarters Ruling HQ H317289 (Mar. 25, 2021) which modified HQ H309186 (Jan. 27, 2021). We subsequently received your January 18, 2022, electronic mail and May 12, 2022, letter in which you requested to remove your third and fourth arguments from your appeal, respectively. We have reviewed the appeal as amended. Our response follows.
In HQ H309186, CBP held that the transportation of scour protection materials by a non-coastwise-qualified vessel in relation to the construction of wind turbine generator units would violate the coastwise laws, including the Jones Act, 46 U.S.C. § 55102. In relevant part, CBP held that the transportation of scour protection from one coastwise point to an undeveloped (i.e., “pristine”) location on the seabed of the Outer Continental Shelf (“OCS”) by a non-coastwise-qualified vessel in connection with the construction of a wind energy installation would constitute a violation of the coastwise laws. CBP modified H309186 with HQ 317289. In this modification, CBP determined that, consistent with the principles articulated in prior rulings, the transportation of scour protection from a coastwise point to a pristine location on the OCS by a non-coastwise-qualified vessel would not, in fact, constitute a violation of the coastwise laws. However, CBP also confirmed that a coastwise point under 46 U.S.C. § 55102 would be created when the first layer of scour protection is placed on the seabed of the OCS.
GLDD advances two arguments in its amended appeal as to why CBP should revoke H317289.
In its first argument, GLDD asserts that the OCS Lands Act of 1953 (OCSLA), as amended by The William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, H.R. 6395, 116th Cong. § 9503 (2021) (“NDAA 2021”), extends the Jones Act to the entirety of the seabed of the OCS for all activities that are consistent with the purposes of the OCSLA (i.e., mineral and non-mineral resource extraction on the OCS). CBP has consistently held that “pristine” locations on the seabed of the OCS are not subject to the Jones Act. See, e.g., HQ 113176 (Aug. 2, 2000). The NDAA 2021 merely amended the OCSLA to “affirm” that the OCSLA extends U.S. jurisdiction to certain activities involving non-mineral resources (e.g., offshore wind); the NDAA 2021 also reformatted section (a)(1)(A) to create sub-sections (i) through (iv), which were previously placed in a continuous paragraph. This reformatting, however, did not change the meaning of the language in the statute, and there is nothing in the legislative history preceding the amendment suggesting otherwise. Accordingly, the statutory amendments do not provide CBP a basis to change its position set forth in H317289, nor CBP’s longstanding position regarding the “pristine” seabed.
GLDD’s second argument is that clause (iii) of the OCSLA, which extends jurisdiction to installations or devices attached to the seabed serving a purpose articulated under the OCSLA, is triggered when the “first rock” is placed at a scour protection site. In H317289, CBP indicated the coastwise point is established with the placement of the first or initial “layer” of scour protection, not the “first rock.” Based upon the facts presented in the request for the ruling, CBP understood that a layer of scour protection would be put down before a monopile is installed, that a “second application” of scour protection would be applied after the monopile is installed, and thereafter, scour protection might periodically be applied “as part of routine maintenance and continued erosion prevention.” Furthermore, the request for a ruling indicated that the vessel applying the scour protection would have enough rock on board to place scour protection at multiple sites, and that it would “complete the installation of scour protection at one … site before moving to the next … site.” Given this description, CBP’s ruling was that the initial application of scour protection (preceding the installation of the monopile) would establish the coastwise point. Based upon the facts presented it was understood that the vessel would finish this “first” or “initial” layer at multiple sites. CBP’s ruling should not be construed to mean that one rock that is installed as part of the initial layer of scour protection constitutes a coastwise point. In addition, CBP generally understands that the “initial” or “first” layer of scour protection itself might be made up of several layers of rock, made in several passes by the same vessel as part of one operation by the same vessel.
It is CBP’s position that the scour application vessel can perform all of these several layers of initial scour application if it has sufficient rock to do so once the operation begins, as the facts of the ruling request indicated was the case. Consistent with our position in HQ H300962 (Apr. 14, 2022) and instructive in this matter, we held, in relevant part, that a coastwise point is created after the first “layer” of scour protection is placed on the seabed of the OCS. By this, CBP intends that the single scour-laying vessel can apply whatever volume of scour rock, in however many separate layers, it might apply at the site for that vessel’s immediate (present) visit to the site. CBP understands this to be referred to as the “filter layer” of scour protection. This application of scour protection by that vessel (whether completed at that time or not) establishes the coastwise point.
GLDD’s remaining arguments have been withdrawn and accordingly those are not addressed in this letter. Please contact Richmond Beevers, Chief, Cargo Security, Carriers and Restricted Merchandise Branch at [email protected], should you have any questions concerning this matter.
Sincerely,
Charles R. Steuart
Director, Border Security and Trade Compliance Division
Office of Trade, Regulations and Rulings
U.S. Customs and Border Protection