OT:RR:BSTC:CCR H331609 JLE
George Keller
Customs Advisory Services, Inc.
100 Hartsfield Centre Parkway
Suite 350
Atlanta, GA 30354
RE: Coastwise Laws; 46 U.S.C. 55103; 46 U.S.C. 55102; 19 C.F.R. 4.1.
Dear Mr. Keller:
This is in response to your April 25, 2023, ruling request on behalf of The Ocean Cleanup Projects. In your request you inquire whether a foreign-flagged vessel docked at the Port of Oakland, San Francisco, for a media event would violate the coastwise laws. Our ruling is set forth below.
Facts
The following facts are from your ruling request and supplements thereto. The Ocean Cleanup Projects B.V. ("The Ocean Cleanup") is a non-profit organization, developing advanced technologies to rid the world's oceans of plastic. The Ocean Cleanup currently conducts cleanup operations in the North Pacific Gyre, also known as the Great Pacific Garbage Patch. The Great Pacific Garbage Patch ("GPGP") is located approximately 1,150 nautical miles from San Francisco Bay in international waters. The Ocean Cleanup currently operates trips to the GPGP from the port of Victoria, British Columbia, in Canada. The trips are run on six weeks' offshore rotations.
Two vessels travel to the GPGP from Victoria. One vessel is the M/V MAERSK TENDER, IMO No. 9388651, ("TENDER"), a Norwegian-built offshore supply vessel built in 2009. The TENDER is Denmark-flagged. The second vessel is the M/V MAERSK TRADER, IMO No. 9388596, ("TRADER"), a Romania-built offshore supply vessel/tug built in 2008. The TRADER is also Denmark-flagged. The TENDER and TRADER utilize a S002B system or its iterated versions S002C/ S03 ("System") to collect plastic waste floating on the ocean surface at the GPGP. The System is carried onboard the vessels until the vessels reach the GPGP, then the System is deployed into the water. Once the System is full, the waste is emptied aboard the TENDER. The System is never used in territorial waters and is stored aboard one of the vessels when the vessels are in transit back to shore. Waste collected from the System is transported in 20-foot shipping containers and bags.
On or about July 24, 2024, the TENDER and TRADER plan to depart Victoria, British Columbia, for the GPGP. The System will be loaded aboard the TENDER. The vessels will utilize the System in the GPGP to collect waste for approximately 4 to 5 weeks. The plastic waste collected at the GPGP will be stored aboard the TENDER in 20-foot shipping containers. The plastic waste will be sorted at the GPGP, and no biological material or protected species will remain onboard the TENDER. The TENDER and TRADER than plan to depart to the Port of Oakland, California, for a media event. The vessels will berth at Pier 15 or 17, Port of Oakland/San Francisco, on or about September 6-7, 2024, and then return to Victoria, British Columbia, Canada where the collected waste will be unladed.
Both vessels will be operated by foreign-national marine crew. Additionally, project crew such as a protected species observer, net technician, offshore manager, and office staff will embark on the TENDER and TRADER in Victoria. The project crew are assigned with specific tasks such as monitoring clean-up operations, environmental monitoring, improvement of the System, steering strategy, operational improvements and filming the cleanup. The project crew will include the founder and CEO of The Ocean Cleanup, a Dutch citizen, and a senior video producer, a dual U.S. and Italian citizen.
At the media event, which is expected to take between 3 and 6 hours upon arrival of TENDER and TRADER at the Port of Oakland, the plastic waste collected from the GPGP will be displayed to the media and public. Plastic that is retrieved from the GPGP waters will remain onboard the TENDER during the media event. Some of the collected waste will be displayed aboard the vessel. Media and guests will be invited to the event. An official presentation and program are planned. The System will also remain on the TENDER. Invited visitors will be allowed to board the TENDER to observe the plastic waste and the System. Both the CEO and the video producer will disembark the TENDER at the Port of Oakland. The marine and project crew will remain aboard the TENDER and TRADER. If they do leave the vessels, it will be only to participate in the festivities on the quayside.
Upon completion of the media event, the TENDER and TRADER will depart for Victoria, Canada for a crew change, plastic waste offloading and preparation for the next trip to the GPGP including waste discharge.
Issues
1. Whether a foreign-flag vessel violates the coastwise laws when it departs from a Canadian port, collects merchandise in international waters and temporarily berths at a US port for a media event and then returns to the original Canadian port to offload the merchandise.
2. Whether a foreign-flag vessel will be required to declare foreign merchandise that will remain on board when it docks at a U.S. port for a planned media event.
3. Whether a foreign-flag vessel will be required to declare a plastic collection system that will remain on board when it docks at a U.S. port for a planned media event.
4. Whether a CBP Form 7501 Entry Summary is required to be filed if merchandise is required to be declared.
5. Whether invited members of the public are permitted to board a foreign-flag vessel while it is berthed at a U.S. port for a planned media event. If the boarding is permitted, what documentation is required for their entry?
6. Whether a foreign-flag vessel may transport project crew from a Canadian port to a US port as part of a planned media event under the Passenger Vessels Services Act.
Law and Analysis
Transportation of Merchandise
Generally, the coastwise laws prohibit the transportation of 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. Such a vessel, after it has obtained a coastwise endorsement from the U.S. Coast Guard, is said to be "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.
The coastwise law applicable to the transportation of merchandise, often referred to as "the Jones Act," is found at 46 U.S.C. 55102,[1] and provides in pertinent part:
a) No vessel shall transport, either directly or by way of a foreign port, any passenger or merchandise between points in the United States embraced within the coastwise laws, including points within a harbor, or merchandise for any part of the transportation between such points, unless it is:
1) Owned by a citizen and is so documented under the laws of the United States as to permit it to engage in the coastwise trade;
(2) Owned by a citizen, is exempt from documentation, and is entitled to or, except for its tonnage, would be entitled to be documented with a coastwise endorsement.
The Jones Act only partially defines the term "merchandise," setting forth that merchandise "includes ... merchandise owned by the United States Government, a State, or a subdivision of a State" and "valueless material." See 46 U.S.C. 55102(a). CBP utilizes the definition of "merchandise" as well in 19 U.S.C. 1401(c): "goods, wares, and chattels of every description, and includes merchandise the importation of which is prohibited, and monetary instruments as defined in section 5312 of Title 31." Furthermore, by interpretations in its administrative letter rulings for purposes of the Jones Act, CBP has distinguished the transportation of "vessel equipment" from "merchandise." Inasmuch as the terms of the Jones Act specifically encompass valueless material, it is our position that the transportation of garbage in this matter would constitute transportation of merchandise.
To determine whether transportation between coastwise points occurs, CBP examines the points at which merchandise is laden and unladen. HQ H316313 (Feb. 4, 2021). Regardless of whether merchandise is unladen at a coastwise point, if the merchandise is laden at a foreign port, no transportation between coastwise points occurs. HQ H309176 (Jan. 27, 2021); HQ H143075 (Feb. 24, 2011). The term "coastwise point" is not defined in the Jones Act itself. 19 C.F.R. 4.80b references the term as follows: "[a] coastwise transportation of merchandise takes place, within the meaning of the coastwise laws, when merchandise laden at a point embraced within the coastwise laws ('coastwise point') is unladen at another coastwise point...." 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. 33 C.F.R. 2.22(a)(2).
Customs has long held that, "the high seas are those waters outside the territorial waters of the United States or the territorial waters of another nation. The territorial waters of the United States include the territorial sea, defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and points in internal waters, landward of the territorial sea baseline, where the baseline and the coastline differ." HQ 114715 (June 16, 1999) (Quoting HQ 112287 (Aug. 20, 1992)). The GPGP is located 1,150 nautical miles from the San Francisco Bay. This area of the GPGP is not located within any foreign nation's territorial waters. Therefore, the location of lading the merchandise would occur on the high seas, which is not a U.S. coastwise point. Accordingly, for merchandise laded at the GPGP and transported to the United States, there would be no transportation of merchandise between two U.S. coastwise points and, thus, no violation of 46 U.S.C. 55102.
Declaration of Foreign Merchandise
Title 19 C.F.R. 4.7a, in pertinent part, states:
The Cargo Declaration (CBP Form 1302 submitted in accordance with paragraph (b)(2) or (b)(4) of this section) must list all the inward foreign cargo on board the vessel regardless of the U.S. port of discharge and must separately list any other foreign cargo remaining on board ("FROB"). For the purposes of this part, "FROB" means cargo which is laden in a foreign port, is intended for discharge in a foreign port, and remains aboard a vessel during either direct or indirect stops at one or more intervening United States ports.
19 C.F.R. 4.7a(c).
The merchandise would be laden at high seas, which would be considered a foreign port. See HQ H114715 (dated Jun. 16, 1999). Unlading of the merchandise is intended to occur in British Columbia, a foreign port. The merchandise would remain aboard the vessel during its Oakland port call. Therefore, the merchandise would be considered FROB. In accordance with the provisions of 19 C.F.R. 4.7a, the merchandise must be declared using CBP Form 1302, or its electronic equivalent.
Plastic Collection System
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), Mar. 13, 1939). Decisions as to whether a given article falls within the definition of "vessel equipment" are made on a case-by-case basis. Here, the function of the vessel is to collect garbage from the GPGP. As previously stated, the System is used to collect plastic waste floating on the ocean surface at the GPGP. The System is carried onboard the vessels until the vessels reach the GPGP; then the System is deployed into the water. Once the System is full, the waste is emptied aboard the TENDER. It is our position, that the System is necessary and appropriate for the operation of the vessel. Therefore, the System would be considered vessel equipment.
CBP Form 1303 is used for ships stores declarations. Ships stores are generally non-consumable items which are part of the furniture or tackle of the ship, defined as "...as referring to the articles on board, necessary or usually taken on board to meet the exigencies of the voyage, for the repairs of the ship, or her security while performing it; this would be to read it, 'such other provisions, cordage, duck, sail cloth or live stock, as shall by the master or passengers be put on board,...." U.S. v. Twenty-Four Coils of Cordage, 28 F. Cas. 276 (C.C.E.D. Pa.1832)(No. 16,566); 1832 U.S. App. LEXIS 176. See e.g. T.D. 22433, which cited Twenty-Four Coils of Cordage, saying, "... 'ship stores' embrace those articles which form 'part of the body, tackle, apparel, or furniture of a ship,' being necessary for the ship itself.
The vessel equipment may be considered ship stores and is required to be declared on CBP Form 1303, or its electronic equivalent. We further advise that you consult with the Vessel Entry and Clearance Specialists at the port for local requirements on filing the CBP Form 1303 to properly declare the Plastic Collection System.
Entry Summary
CBP Form 7501, Entry Summary, is used to identify merchandise entering the commerce of the United States, and to document the amount of duty and/or tax paid. See https://www.federalregister.gov/documents/2023/04/19/2023-08213/entry-summary-form-750. You state that the merchandise taken aboard the vessel at the GPGP will not be unladed at Oakland or any other U.S. port. Accordingly, the merchandise will not enter into the commerce of the U.S. at any point nor leave the vessel during the port visit. Therefore, no entry of the merchandise would occur. Thus, filing of CBP Form 7501 would not be required.
Boarding of the Public
Applicable CBP regulations regarding individuals boarding vessels in United States ports provide, in pertinent part:
(a) Every vessel arriving at a CBP port will be subject to such supervision while in port as the port director considers necessary.
...
(b)
(1) No person, with or without the consent of the master, except a pilot in connection with the navigation of the vessel, personnel from another vessel in connection with the navigation of an unmanned barge, an officer of CBP or the Coast Guard, an immigration or health officer, an inspector of the Animal and Plant Health Inspection Service of the U.S. Department of Agriculture, or an agent of the vessel or consular officer exclusively for purposes relating to customs formalities, shall go on board any vessel arriving from outside the customs territory of the United States without permission of the port director or the CBP officer in charge until the vessel has been taken in charge by a CBP officer.
...
(3) Every person permitted to go on board or to leave without the consent of a CBP officer under the provisions of this paragraph shall be subject to CBP and quarantine regulations.
19 C.F.R. 4.1 (emphasis added).
The vessel will be arriving from the high seas. As discussed above, the high seas are outside the customs territory of the United States. Accordingly, permission of the CBP Port Director is required for individuals boarding the vessels for the media event. We recommend coordination with the Port of Oakland port director for further information.
Passenger Service Vessels Act ("PSVA")
Title 46 United States Code 55103 states:
a) Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not transport passengers between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel-
(1) is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and
(2) has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement.
According to your request, both vessels will be operated by a foreign-national marine crew. Additionally, a project crew comprised of a protected species observer, net technician, offshore manager, and office staff will embark on the TENDER and TRADER in Victoria. The project crew are assigned with specific tasks such as monitoring clean-up operations, environmental monitoring, improvement of the System, steering strategy, operational improvements, and filming the cleanup. The project crew will include the CEO of The Ocean Cleanup and a senior video producer. Both the CEO and the video producer will disembark the TENDER at the Port of Oakland, while the marine and project crew will remain aboard the TENDER and TRADER.
In accordance with previous Headquarters rulings, workmen, technicians, or observers transported by vessel between ports of the United States are not classified as "passengers", within the meaning of 46 U.S.C. 55103 and 19 C.F.R. 4.50(b), if they are required to be onboard to contribute to the accomplishment of the operation or navigation of the vessel during the voyage or are onboard because of a necessary vessel ownership or business interest during the voyage. HQ H310686 (Aug. 10, 2022); see HQ 101699 (Nov. 5, 1975); see also HQ 116721 (Sept. 25, 2006) (quoting HQ 101699). Furthermore, the shipboard activities engaged in by such individuals while traveling on a non-coastwise-qualified vessel between coastwise ports must be "directly and substantially" related to the operation, navigation, ownership, or business of the vessel itself in order for such individuals to not be considered as passengers under these provisions of law. Id.
With regard to the marine crew, protected species observer, net technician, offshore manager, CEO and office staff who will embark the vessel in British Columbia and disembark in British Columbia, we find that no PVSA violation would occur. The PVSA applies only to passengers transported between ports or places in the United States to which the coastwise laws apply. These individuals would not be considered passengers as their duties are related to the operation, navigation, ownership, or business of the vessel itself. With the exception of the CEO, all other personnel - the marine crew, protected species observer, net technician, offshore manager, and office staff will embark and disembark at a foreign place. Therefore, no violation of the PSVA would occur.
Regarding the video producer who will disembark the TENDER at the Port of Oakland, CPB has consistently held that individuals transported solely for the purpose of producing films, videos, and television commercials are passengers within the meaning of 46 U.S.C. 55103 and 19 C.F.R. 4.50(b). See Bureau Letter dated July 3, 1957, MA 212 (movie making); HQ 109695 (Nov. 3, 1988) (camera crew carried aboard to film a promotional video); HQ 116668 (camera crew and company employees engaged in promotional filming for cruise line); HQ H008038 (Mar. 9, 2007) (marketing employees of the cruise line and independent contractors, that were shooting, producing, and performing in a cruise line promotional video); HQ H053637 (Mar. 5, 2009) (individuals transported for the purpose of filming a TV commercial); HQ H248636 (Dec. 12, 2013) (documentary film crew covering terminal and vessel operations, and normal crew work); HQ H267530 (Aug. 10, 2015) (film crews for filming maritime safety training videos on board); and HQ H270800 (Nov. 19, 2015) (television host, celebrity contestants and film crew). In each of these rulings, CBP found that none of the subject film-related activities were "directly and substantially" related to the operation or business of the vessel itself. Therefore, the senior video producer and any other members whose duties are related to filming activities, would be considered passengers. Inasmuch as this individual will board the vessel in British Columbia, no coastwise transportation would occur when the individual disembarks at Oakland.
We note, the CEO and the senior video producer who disembark at the Port of Oakland will need to comply with proper Customs requirements for passengers arriving from foreign.
Holding:
1. Transportation of merchandise laden aboard the vessel on the high seas, which is not a U.S. coastwise point, which remains onboard the vessel during a Unted States port call and which will not be unladen at any other coastwise point, would not violate 46 U.S.C. 55102.
2. Merchandise laden aboard the vessel on the high seas that will remain onboard when it docks at a U.S. port for a planned media event and that will be discharged at British Columbia, a foreign port or place, must be declared as foreign cargo remaining on board (FROB) using CBP Form 1302, or its electronic equivalent.
3. The plastic waste collection system which will remain aboard the vessel when it docks at a U.S. port for a planned media event would be considered vessel equipment and must be declared on CBP Form 1303 used for ships stores declarations, or its electronic equivalent.
4. Merchandise which will not be entered into the commerce of the U.S. at any point nor leave the vessel during the port visit is not required to be declared on CBP Form 7501 or its electronic equivalent.
5. Invited members of the public visiting a vessel arriving from outside the customs territory of the United States must obtain permission from the CBP port director to board the vessel for the media event. We recommend coordination with the Port of Oakland port director for further information.
6. Transportation of the marine crew, protected species observer, net technician, offshore manager, and office staff aboard the vessel would not violate the Passenger Vessel Services Act ("PVSA") because these individuals would embark and disembark the vessel at a foreign location in British Columbia. Disembarkation of the CEO, and video producer at Oakland would not result in a PVSA violation, because these individuals would also have embarked the vessel at a foreign location.
Please note that 19 C.F.R. 177.9(b)(1) provides that "[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based." If the terms of the import or export contracts and results of the sampling records vary from the facts stipulated to herein, or CBP ascertains discrepancies based upon a review of any other pertinent information, this decision shall not be binding on CBP as provided for in 19 C.F.R. 177(b)(1), (2) and (4), and 177.9(b)(1) and (2).
W. Richmond Beevers, Chief
Cargo Security, Carriers & Restricted Merchandise Branch
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[1] Formerly 46 U.S.C. App. 883. See Pub. L. 109-304 (Oct. 6, 2006).
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