VES-3-02-OT:RR:BSTC:CCR H333884 HKC
Stefanos N. Roulakis
Blank Rome
1825 Eye Street, NW
Washington, DC 20006
RE: Coastwise Transportation; Outer Continental Shelf; Cable Laying; 46 U.S.C. 55102 and 55103; 46 U.S.C. 55109; 19 CFR 4.80a and 4.80b
Dear Mr. Roulakis,
This letter is in response to your August 15, 2023 ruling request, and subsequent communications, on behalf of your client [ ] regarding whether the transportation and installation of offshore wind export cables and associated seabed preparatory work on the U.S. Outer Continental Shelf ("OCS") by non-coastwise-qualified vessels, as described below, would violate the coastwise laws.[1] Our decision follows.
FACTS
The following facts are from your August 15, 2023 ruling request and subsequent correspondence.[2] Your client has been awarded a contract to perform the transportation and installation of an export cable system ("ECS") at the [
] located on Bureau of Ocean Energy Management (BOEM) Renewable Energy Lease Area [
]. The ECS will consist of two High Voltage Direct Current ("HVDC") cores and one Fiber Optic ("FO") cable. In order to complete the project scope, your client will perform various operations on the OCS, to include boulder removal, cable transportation and laying, equipment transportation, jointing operations, cable pull-in, trenching/excavation, and transportation of crewmembers, each of which is described in detail below.
ISSUES
1. Whether the relocation of boulders by a non-coastwise qualified vessel would violate the Jones Act, 46 U.S.C. 55102, or the Dredging Statute, 46 U.S.C. 55109.
2. Whether the transportation and laying of cable would violate the Jones Act, 46 U.S.C. 55102.
3. Whether the transportation of cable installation equipment would violate the Jones Act, 46 U.S.C. 55102.
4. Whether the performance of cable jointing operations, and transportation of associated equipment including joint habitats and temporary cable hang-offs would violate the Jones Act, 46 U.S.C. 55102.
5. Whether the performance of cable pull-in operations violates the Jones Act, 46 U.S.C. 55102.
6. Whether the transportation of "free issued items" between different U.S. ports would violate the Jones Act, 46 U.S.C. 55102.
7. Whether the performance of controlled flow excavation activities by non-coastwise qualified vessels, or trenching works conducted by a jet trenching ROV, would violate the Dredging Statute, 46 U.S.C. 55109.
8. Whether the transportation and installation of remedial cable protection items would violate the Jones Act, 46 U.S.C. 55102.
9. Whether excess cable transported to a U.S. port or a foreign port by a non-coastwise qualified vessel would violate the Jones Act, 46 U.S.C. 55102.
10. Whether the transportation of marine crew personnel, as described below, would violate the Passenger Vessel Services Act, 46 U.S.C. 55103.
LAW AND ANALYSIS
The coastwise law applicable to the transportation of merchandise, known as the Jones Act, is found at 46 U.S.C. 55102,[3] and provides in pertinent part:
Except as otherwise provided in this chapter or chapter 121 of this title, 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-
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.
The Jones Act specifically prohibits the coastwise transportation of "merchandise" between coastwise points by non-coastwise qualified vessels. Pursuant to 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, and monetary instruments as defined in section 5312 of Title 31." Further, 46 U.S.C. 55102(a) also provides: "[m]erchandise includes (1) merchandise owned by the United States Government, a State, or a subdivision of a State; and (2) valueless material." For purposes of the Jones Act, merchandise also includes "valueless material."[4]
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 CFR 2.22(a)(2). In addition, Section 4(a)(1) of the Outer Continental Shelf Lands Act of 1953 ("OCSLA"), as amended, provides that the Constitution and laws and civil and political jurisdiction of the United States are extended to:
i) the subsoil and seabed of the outer Continental Shelf;
ii) all artificial islands on the outer Continental Shelf;
iii) installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing, or producing resources, including non-mineral energy resources; or
iv) any such installation or other device (other than a ship or vessel) for the purpose of transporting or transmitting such resources.[5]
(Emphasis added).
Accordingly, the OCSLA, as amended, extends U.S. jurisdiction to devices attached to the seabed of the OCS for the purpose of producing non-mineral energy such as wind energy.
Pursuant to 46 U.S.C. 55109, only coastwise-qualified vessels may engage in dredging in the navigable waters of the United States, which provides, in pertinent part:
[A] vessel may engage in dredging in the navigable waters of the United States only if-
(1) the vessel is wholly owned by citizens of the United States for purposes of
engaging in the coastwise trade;
(2) the charterer, if any, is a citizen of the United States for purposes of
engaging in the coastwise trade; and
(3) the vessel has been issued a certificate of documentation with a coastwise endorsement under chapter 121 of this title or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement.
Dredging is defined as "excavation" by any means:
The word "excavate" is derived from the Latin word meaning to hollow out. Its common, plain and ordinary meaning is to make a cavity or hole in, to dig out, hollow out, to remove soil by digging, scooping out or other means. The common plain and ordinary meaning of the word "dredging" is the removal of soil from the bottom waters by suction or scooping or other means.[6]
Pursuant to 46 U.S.C. 55103 ("the Passenger Vessel Services Act" or PVSA), only coastwise-qualified vessels may transport passengers between ports or places in the United States, providing in pertinent part:
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) wholly owned by U.S. citizens; and
(2) has a certificate of documentation with a coastwise endorsement.[7]
The coastwise laws apply to the United States, including U.S. island territories and possessions, except for American Samoa, the Northern Mariana Islands,[8] and the Virgin Islands.[9] A non-coastwise-qualified vessel transporting passengers embarking from a U.S. port must disembark them at the same U.S. port in order to avoid a violation of 46 U.S.C. 55103.[10]
A passenger is defined under 46 U.S.C. 55103 and 19 C.F.R. 4.50(b) as "any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business."[11] Furthermore, the shipboard activities engaged in by such aforementioned 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.[12]
Issue One: Whether the relocation of boulders by a non-coastwise qualified vessel would violate the Jones Act, 46 U.S.C. 55102, or the Dredging Statute, 46 U.S.C. 55109.
In the present matter, your client proposes utilizing a non-coastwise qualified vessel (either a foreign-flagged cable laying vessel or a foreign-flagged trenching support vessel) to relocate boulders located on the seabed in order to prevent such boulders from obstructing the export cable system route. The boulders in question are located both within U.S. territorial waters (three nautical miles from shore) and the seabed of the OCS (more than three nautical miles from shore). The boulders in question rest on a seabed bottom consisting of medium dense sand. They will be removed from seabed locations where there is no offshore wind or subsea infrastructure within 50 meters. The boulders will be picked up by what you describe as a "grab" or "boulder grab" device and relocated 10 to 50 meters away from their initial locations (clear of the cable route).
To accomplish this, your client proposes utilizing a "grab" device launched from the non-coastwise qualified vessel above the target boulder. The grab secures the boulder and lifts it vertically a few meters above the seabed. While the vessel remains stationary, the vessel crane pivots on its axis with the boulder attached, moving it to a new location. The vessel crane uses the grab to lower the boulder back onto the seabed at a new location.
The only equipment which will touch the seabed is the boulder grab. No suction devices are used in the boulder relocation.
We next examine whether the transportation of boulders as described above would violate the Jones Act. Because the definition of "merchandise" includes valueless material, the boulders are considered merchandise.[13] The coastwise laws generally apply to points in the territorial sea three nautical miles from shore.[14] Therefore, the transportation of boulders between seabed locations as described in your request within the three nautical mile limit would be coastwise transportation for the purposes of the Jones Act, and the use of a non-coastwise-qualified vessel to conduct such transportation would violate 46 U.S.C. 55102.
However, here, "transportation" of the boulders for purposes of the coastwise laws does not occur. Specifically, the movement of the boulders 10 to 50 meters using the non-coastwise qualified vessel's crane occurs while the vessel remains stationary. CBP has previously held that the use of a non-coastwise-qualified crane vessel to lade and unlade cargo or to construct or dismantle a marine structure is not coastwise trade and does not violate the coastwise laws, provided any movement of merchandise is effected exclusively by the crane and not by any movement of the vessel, except for necessary movement which is incidental to a lifting operation while it is taking place.[15] Similarly here, any movement of the boulders - whether on the seabed of the territorial sea or the OCS - is effected exclusively by the crane, as the vessel will remain stationary. Therefore, "transportation" of merchandise does not occur, and the relocation of the boulders would not be in violation of the coastwise laws.
The Dredging Statute applies to the navigable waters of the United States, which is defined as the waters of the United States and the territorial seas, i.e., internal waters, landward of the territorial sea baseline and the belt, three nautical miles wide, seaward of the territorial sea baseline.[16] CBP also extends the coastwise laws to the OCS (by virtue of the OCSLA) if the activity governed by a particular federal law (such as the Dredging Statute) is tied to the OCSLA's purposes of exploring for, developing, producing, transporting, or transmitting resources. However, because the OCSLA only extends the civil and political jurisdiction to the OCS for purposes related to the OCSLA, dredging on the OCS that is not done in connection with such a purpose is not covered by 46 U.S.C. 55109.
Without deciding whether this activity is embraced by an OCSLA purpose, CBP does not consider the activity to be "dredging." CBP has long held that the term "dredging" within the meaning of 46 U.S.C. 55109, is "the use of a vessel equipped with excavating machinery in digging up or otherwise removing submarine material." See HQ 103692 (Dec. 28, 1978, published as Customs Service Decision (C.S.D.) 79-331; HQ 109910 (Jan. 26, 1989, published as C.S.D. 89-64). The picking up of boulders utilizing a grab as described above would not be the use of "excavating machinery". Therefore, the use of a grab device to pick up and put down boulders from the seabed as contemplated above would not violate the Dredging Statute, 46 U.S.C. 55109.
Issue Two: Whether the transportation and laying of cable would violate the Jones Act, 46 U.S.C. 55102.
In the present matter, your client proposes loading cable aboard the non-coastwise-qualified Cable Laying Vessel ("CLV") in Fredrikstad, Norway, and transporting such cable to the project site located on the OCS where it will be paid out. Your client also proposes to load cable aboard a second non-coastwise qualified CLV at Charleston, South Carolina, and transporting it to the project site where it will be paid out.
CBP has long held that the sole use of a vessel in laying pipe or cable between two coastwise points is not considered a use in the coastwise trade of the United States.[17] In doing so, CBP has reasoned that situations in which material is not landed as cargo but is only paid out in the course of the installation operation makes such operation permissible (i.e., "paid out/not unladen"). Further, since the use of a vessel in pipe or cable laying is not a use in the coastwise trade, a non-coastwise-qualified vessel may carry pipe or cable which is laid between such points by that vessel. However, the transportation of pipe or cable by any vessel other than the vessel that is laying pipe to a pipe-laying location at a point within U.S. territorial waters would be considered coastwise trade and would therefore have to be accomplished by a vessel meeting the statutory requirements entitling it to engage in such trade.[18]
In line with these rulings, your request describes a scenario in which the subject cable will be paid out by the CLV onto the seabed of U.S. territorial waters and the OCS. As such, the proposed use of the non-coastwise-qualified CLV to lay cable on the OCS would not be in violation of the Jones Act, 46 U.S.C. 55102.
Issue Three: Whether the transportation of cable installation equipment would violate the Jones Act, 46 U.S.C. 55102.
During the course of ECS cable installation, the non-coastwise qualified CLV will lade various items of cable installation equipment in either Norway or a U.S. port and use them to install cable offshore. Such cable installation equipment will include jointing habitats and tools, as well as spare HVDC/FO cable jointing bodies and accessories, both laded at either a U.S. port or in Norway; and spare HVDC/FO cable sealing kits laded in Norway. Subsequently, this equipment will be unladed at a U.S. port (different from the U.S. port at which it was laded if it was laded at a U.S. port), or paid out with the cable as described below.
The jointing habitat consists of a set of containers that is positioned over separate cable ends. This facilitates cable jointing operations of unjointed cable ends in a dry and clean environment offshore. The jointing habitat remains on the CLV throughout operations, and will be unladen from the vessel at a U.S. port upon the completion of cable installation.
The spare HVDC/FO cable jointing body is a cylindrical shaped cover in which both cable ends that require jointing are placed once jointed. This cylindrical cover serves to protect the cable joint. At both sides of the jointing body additional jointing body accessories are mounted as part of the joint assembly to assist in protecting the cable over the first meters either side. If used, the cable jointing body is attached to the cable aboard the CLV, and subsequently paid out with the cable. The jointing body remains on the seafloor with the cable after it is paid out. If not used, the spare HVDC/FO cable jointing body remains on the CLV throughout operations, and will be unladen from the vessel at a U.S. port upon the completion of cable installation (see Issue 6 analysis).
The spare HVDC/FO cable sealing kit is a cable end assembly consisting of a protecting sleeve and an end cap to protect the cable end. If used, the spare cable sealing kit is attached to the cable aboard the CLV as a cable seal, and subsequently paid out with the cable. The used cable seal then either is lifted back aboard the CLV and removed, in which case it will be unladen for scrap by the CLV at a foreign port (Option 1); or remains on the seafloor with the cable after it is paid out after the CLV has departed, until a third-party contractor removes it for scrap (Option 2).[19] To clarify, under Option 1, some cable ends are subsequently lifted back aboard the CLV, where they are joined to another cable end using the jointing habitat. Prior to these cables being joined, the cable seals are removed. These used cable seals will remain aboard the CLV throughout operations, and are subsequently unladen at a foreign port when the CLV returns to Europe. In contrast, under Option 2, other cable ends remain on the seabed with the sealing kit attached when the CLV departs the project site; these cable ends are pulled onboard the offshore converter station, and the used cable seals are removed by a third-party contractor for scrap after the CLV has departed. If not used, the spare HVDC/FO cable sealing kit remains on the CLV throughout operations, and will be unladen from the vessel at a U.S. port upon the completion of cable installation (see Issue 6 analysis).
CBP has held that "vessel equipment" or "equipment of the vessel" is not included within the general meaning of merchandise for purposes of the Jones Act.[20] "Vessel equipment" has been defined as portable articles, "necessary and appropriate for the navigation, operation or maintenance of the vessel and for the comfort and safety of the persons on the board."[21] CBP clarified its consideration of vessel equipment in 2019, indicating that vessel equipment includes "all articles or physical resources serving to equip the vessel, including the implements used in the vessel's operation or activity."[22] CBP elaborated that items considered "necessary and appropriate for the operation of the vessel" are those items that are "integral to the function of the vessel and are carried by the vessel."[23]
Whether such articles constitute vessel equipment is a fact-specific, case-by-case determination.[24] Additionally, CBP has held that "[v]essel equipment placed aboard a 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."[25] The fact that an item is returned to the vessel and not left behind on the seabed is a factor that weighs in favor of an item being classified as vessel equipment, but is not the sole determinative factor.[26]
Here, the jointing habitat is integral to the CLV's cable-laying function, remains aboard the CLV throughout operations, and is transported to a U.S. port aboard the vessel upon completion of operations. Accordingly, the jointing habitat listed above would not be considered merchandise for purposes of the Jones Act.
The cable jointing body - if used - is integrated into the cable prior to it being paid out, and remains permanently on the seabed when the vessel departs. As a component of the cable, the jointing body is considered merchandise. However, the transportation and paying out of the cable jointing body with the cable would not violate the Jones Act because similar to the cable, the cable jointing body is being paid out, not unladen.[27] Accordingly, if the spare cable jointing bodies and accessories are used, the operations described above would not violate 46 U.S.C. 55102.
The transportation of the cable sealing kits from Norway to the project site by a non-coastwise qualified vessel would not violate the Jones Act because Norway is not a coastwise point, and because the cable sealing kits are paid out with the cable.[28]Similarly, the transportation of used cable seals from the project site to a European port on board the CLV under Option 1 would not violate the coastwise laws because the European port is not a coastwise point.
Issue Four: Whether the performance of cable jointing operations, and transportation of associated equipment including joint habitats and temporary cable hang-offs would violate the Jones Act, 46 U.S.C. 55102.
As noted above, your client proposes to utilize a non-coastwise qualified CLV to lay cable onto the seabed of the OCS. When the first CLV depletes its roll of ECS cable, a second non-coastwise qualified CLV will recover the end of the cable from the seabed, joint the end of the cable to a second roll of ECS cable using a joint habitat device installed aboard the CLV, and begin paying out the second roll of ECS cable onto the seabed. The joint habitat device may be loaded on the vessel either in Norway or at a U.S. port and unloaded at another U.S. port. The joint habitat device will remain on the vessel throughout and following cable lay operations.
Additionally, temporary cable hang-offs will be installed by the CLV directly on the OCS substation and the hang-offs will remain there. These hang-offs will be used to attach the cable to the substation once the cable has been pulled into the substation. A third party-contractor unaffiliated with your client will install permanent cable hang-offs after the CLV has departed. Your client proposes transporting these temporary hang offs either (1) from a U.S. port to the substation using a coastwise-qualified vessel, or (2) laden aboard the non-coastwise qualified CLV at a Norwegian port, and unladen by the CLV at the substation.
CBP has previously confirmed that the movement of submarine cable to effect the repair, replacement, or installation of a section of cable does not constitute coastwise trade.[29] Furthermore, CBP contemplated a situation in which an umbilical would be "cut to the proper length, then abandoned on the seabed, including some additional length, to allow for pulling up to the platform...."[30] CBP determined that such an operation, including the initial "abandonment" and eventual cable pull in, would not violate the Jones Act because it still constituted a cable-laying operation.[31] Accordingly, the temporary lifting of the ECS cable from the seabed for the purposes of jointing it to a second roll of ECS, and its return to the seabed would not constitute coastwise trade or implicate the Jones Act.
CBP has held that "vessel equipment" or "equipment of the vessel" is not included within the general meaning of merchandise for purposes of the Jones Act.[32] "Vessel equipment" has been defined as portable articles, "necessary and appropriate for the navigation, operation or maintenance of the vessel and for the comfort and safety of the persons on the board."[33] As discussed in Issue Three, the joint habitat device is vessel equipment because it is integral to the vessel's cable laying function and remains aboard the vessel upon its departure from the worksite. Therefore, the joint habitat device would not be considered merchandise for purposes of the Jones Act.
On the other hand, the temporary hang-offs are an essential part of the substation infrastructure to keep the cable in place, which will be replaced by permanent hang-offs installed on the substation. These are different in character from items used aboard the CLV as tools and the hang-offs do not remain aboard the CLV when it returns to port. Accordingly, the temporary hang-offs are merchandise. However, neither scenario for transporting the temporary hang-offs described above would violate the Jones Act. The use of a coastwise-qualified vessel to transport the hang-offs from a U.S. port to the substation would be permissible because although transportation is occurring between two coastwise points, the transporting vessel is coastwise qualified. The transportation of the hang-offs between a Norwegian port and the substation aboard the non-coastwise qualified CLV would be permissible because the Norwegian port is not a coastwise point. Accordingly, the operations described above would not violate 46 U.S.C. 55102.
Issue Five: Whether the performance of cable pull-in operations violates the Jones Act, 46 U.S.C. 55102.
In the present matter, your client intends to use a foreign-flagged "multicat" type workboat for cable pull-in operations, with the assistance of several smaller coastwise-qualified vessels which will be positioned closer to the beach. In line with CBP precedent, the movement of cable during pull-in operations is considered part of a cable-laying operation. Therefore, pull-in by a non-coastwise qualified vessel would not be in violation of the Jones Act, 46 U.S.C. 55102.[34]
Issue Six: Whether the transportation of "free issued items" between different U.S. ports would violate the Jones Act, 46 U.S.C. 55102.
Your client proposes to transport "free issued items" which include the three items discussed in Issue Three above (jointing habitats and tools, spare HVDC/FO cable sealing kits, and spare HVDC/FO cable jointing bodies and accessories), plus one additional item (spare cable protection systems), using the non-coastwise qualified CLV. The spare cable protection system consists of an outer shell intended to protect the ECS cable as it sits on the seabed. If used, the spare cable protection system is attached to the cable prior to it being paid out. Accordingly, as a would-be component of the cable, the spare cable protection system is considered merchandise.
The cable sealing kits will be loaded aboard the CLV in Norway. The other three items - the jointing habitats and tools, spare cable jointing bodies and accessories, and spare cable protection systems - will be loaded aboard the CLV either in Norway or at a U.S. port. The CLV will use all four of these items to install cable offshore (or potentially use them in the case of spares), and subsequently unload them at a different U.S. port. In this scenario the jointing habitats and tools will be used as described above in Issue Three, while the spare cable sealing kits, spare cable jointing bodies and accessories, and spare cable protection systems will not be used.
As described in Issue Three above, transportation of the jointing habitats and tools from one U.S. port to a different U.S. port by a non-coastwise qualified vessel would not violate the Jones Act because these items are vessel equipment. Transportation of unused cable sealing kits from a port in Norway to a port in the United States by a non-coastwise qualified vessel also would not violate 46 U.S.C. 55102. Conversely, transportation of unused spare cable jointing bodies and accessories from one U.S. port to a different U.S. port by a non-coastwise qualified vessel would violate 46 U.S.C. 55102 because these items are considered merchandise (see Issue Three analysis). Likewise, transportation of the unused spare cable protection systems from one U.S. port to a different U.S. port by a non-coastwise qualified would violate 46 U.S.C. 55102 because they too are considered merchandise given that they are a component of the cable. The loading of any of the "free issued items" in a Norwegian port and their unloading in a U.S. port would not implicate 46 U.S.C. 55102 because a Norwegian port is not a coastwise point.
Issue Seven: Whether the performance of controlled flow excavation activities by non-coastwise qualified vessels, or trenching works conducted by a jet trenching ROV, would violate the Dredging Statute, 46 U.S.C. 55109.
As discussed in Issue One, the Dredging statute applies to the navigable waters of the United States. CBP also extends the coastwise laws to the OCS (by virtue of the OCSLA) if the activity governed by a particular federal law (such as the Dredging Statute) is tied to the OCSLA's purposes. However, because the OCSLA only extends the civil and political jurisdiction to the OCS for purposes related to the OCSLA, dredging on the OCS that is not done in connection with such a purpose is not covered by the Dredging Statute.
In the present matter, your client intends to utilize a foreign-flagged trenching support vessel ("TSV") equipped with a trenching remotely-operated vehicle ("TROV"). Once the CLV has laid the ECS cable, the TSV will utilize a water jetting system to emulsify the seabed sediment below the cable, creating a trench. The weight of the ECS cable will cause it to sink into the trench. An ECS loading arm may be used to guide the cable into the trench.
CBP has long held that the term "dredging" within the meaning of 46 U.S.C. 55109, is "the use of a vessel equipped with excavating machinery in digging up or otherwise removing submarine material."[35] CBP has also held, however, that the "use in United States territorial waters from a cable laying or repair vessel of cable burial devices which temporarily remove from the seabed, by either an emulsification or a share or plow and cutting disc, a very narrow 'slice' of the seabed under which the cable is buried is not an engagement in dredging in the United States . . . ."[36]
CBP has ruled in the past that the use of water jets does not constitute "dredging" under the Dredging Act and can be performed by a non-coastwise-qualified vessel in U.S. territorial waters and on the U.S. OCS.[37] Specifically, CBP has reasoned that the use of a jetting tool to "temporarily lift" a "narrow 'slice'" of the seabed amounts to a "temporary manipulation of the seabed" as opposed to the creation of a furrow or trench by operation of a share or plow and disc cutting wheel.[38] CBP has distinguished between the use of a physical plow used to create an underwater furrow or trench, holding that this may constitute dredging, and the use of jetting system to fluidize the seabed (which does not constitute dredging).[39]
Because the jetting system contemplated in the present matter temporarily emulsifies the seabed utilizing a jet sword, as opposed utilizing a plow or other physical device, the controlled flow excavation activities would not constitute dredging for the purposes of 46 U.S.C. 55109. Therefore, the use of a non-coastwise qualified TSV would not be violative of the Dredging Statute.
Issue Eight: Whether the transportation and installation of remedial cable protection items would violate the Jones Act, 46 U.S.C. 55102.
As part of the cable laying process, your client intends to load various ancillary and remedial cable protection items aboard the non-coastwise qualified CLV either in Norway or at a U.S. port. Such items will include HVDC/FO cable pullheads, cable protection system pullheads, HVDC/FO cable sealing kits, cable protection systems, and HVDC/FO cable jointing bodies and accessories. The cable pullheads, cable protection system pullheads, and cable sealing kits will be loaded aboard the vessel in Norway. The remaining two items (the cable protection systems and the cable jointing bodies and accessories) may be loaded aboard the CLV either at a U.S. port or a foreign port.
The cable pullheads are deployed with the cable during cable laying operations and are used to "pull" the cable towards onshore and/or offshore structures. The cable pullheads, after being paid out with the export cable onto the seabed, will subsequently be used by another set of contractors to pull the cable into the OCS substation and an onshore attachment point, and detached from the cable once this is complete.[40] The cable pullheads will not be returned to the CLV. The cable protection system pullheads are likewise deployed with the cable and are used to "pull" the cable protection system encasing the cable towards onshore and/or offshore structures. The cable protection system pullheads will be returned to the CLV as discussed below. Both of these items (the cable pullheads and the cable protection system pullheads) will be attached to the export cable aboard the CLV, and paid out with the export cable onto the seabed of U.S. territorial waters or the OCS. The cable sealing kits are addressed in Issues Three and Six above. The cable protection system is addressed in Issue Six. The cable jointing bodies and accessories are addressed in Issues Three and Six.
In the past, CBP has held that the paying out of the cable with the cable protection system already attached would not violate of the Jones Act.[41] Like the cable, the cable protection system is being paid out by the vessel, not unladen.[42] By contrast, we have held the use of a non-coastwise qualified vessel to install concrete mats on a cable that has already been laid to be violative of the Jones Act, provided the concrete mats were laden aboard at a U.S. port.[43] The concrete mats were unladen, not paid out.
Here, the various ancillary items referred to above (the cable pullheads, cable protection system pullheads, cable sealing kits, cable protection systems, and cable jointing bodies and accessories) will be attached to the export cable prior to its paying out, in line with the former scenario. Therefore, even if these ancillary items were all loaded aboard a non-coastwise qualified CLV at a U.S. port, the transportation and paying out of these ancillary items by a non-coastwise qualified CLV would not violate the Jones Act because these items are paid out, not unladen.
After cable lay operations are complete, the cable protection system pullheads will be picked up off the end of the cable and laden aboard the CLV. Your client notes the possibility that the cable protection system pullheads may be transported to a U.S. port aboard the CLV after cable laying operations are complete. Here, there would be no violation of the Jones Act because the cable protection system pullheads are laden in Norway, and because they are vessel equipment, not merchandise. Here, they are integral to the cable laying functions of the vessel, and depart the project site on board the vessel.[44] CBP has held that the scope of vessel equipment includes items which are "necessary and appropriate for the navigation, operation or maintenance of a vessel" and that items considered "necessary and appropriate for the operation of the vessel" may include those items that aid in the installation of seafloor or subsea infrastructure, flow lines, and surface production facilities.[45]
Issue Nine: Whether excess cable transported to a U.S. port or a foreign port by a non-coastwise qualified vessel would violate the Jones Act, 46 U.S.C. 55102.
Your client proposes to load export cable aboard one CLV at Fredrikstad, Norway, as well as export cable aboard a second CLV at Charleston, South Carolina. Both non-coastwise qualified CLVs will then pay out the export cable onto the seabed of the U.S. territorial sea and OCS. Once the paying out of export cable is complete, your client proposes unlading spare cable from each CLV at a U.S. port. Your client notes it anticipates that the excess export cable to be below 5% of the total export cable amount. If the excess cable is more than 5% of the total export cable amount, and if the cable was loaded at Charleston (a coastwise point), then the CLV will return to the same U.S. port and berth where the cable was originally laden on the vessel prior to unlading the cable.
CBP historically has ruled that up to 5% of cable laden on a non-coastwise qualified vessel may be laden at one coastwise point and unladen at a second coastwise [46] Accordingly, export cable laden aboard a non-coastwise qualified CLV at Charleston and unladen at a different U.S. port would not violate the Jones Act so long as the amount of cable unladen is less than 5% of the total cable amount originally laden. Similarly, if the amount of excess cable is greater than 5% of the total amount, there would be no violation of the Jones Act if the excess cable is unladen at the same coastwise point (same berth) in Charleston where it was originally laden aboard the vessel. Finally, the unlading of excess cable originally laden aboard the CLV in Fredrikstad, Norway at a U.S. port would not violate the coastwise laws because coastwise transportation would not occur.
Issue Ten: Whether the transportation of marine crew personnel, as described below, would violate the Passenger Vessel Services Act, 46 U.S.C. 55103.
In support of the ECS cable installation activities above, your client proposes to transport various project crewmembers from a U.S. port to vessels anchored on the OCS/an offshore power station at the project site and return these same marine crew to a U.S. port. The project crewmembers will consist of marine crew responsible for operating the CLVs, TSV, and multipurpose vessel ("MPV") offshore (captain, officers, cooks, deckhands, engineers etc.), construction crew responsible for operating cable laying equipment and ROV trenching equipment, and supervisory personnel responsible for supervising offshore cable lay activities. Your client attests that each individual transported offshore is directly and substantially related to the vessel's operations.
Your client proposes to transport these crewmembers offshore through the following scenarios:
(1) Crewmembers embark on a coastwise-qualified crew transfer vessel ("CTV") at a U.S. port, and are transported to the foreign-flagged CLV, TSV, and MPV offshore where they disembark. Upon work completion they disembark these foreign-flagged vessels at the same U.S. port.
(2) Crewmembers embark a coastwise-qualified CTV at a U.S. port, are transported to the offshore power station to perform work, and are returned to a U.S. port by the coastwise-qualified CTV.
(3) Crewmembers embark the foreign-flagged, non-coastwise qualified CLV, TSV, and MPV at a U.S. port. Once offshore, they are transported by coastwise-qualified CTV from these foreign-flagged vessels to the offshore power station where they perform work in support of cable installation. These crewmembers are subsequently transported back to the foreign-flagged vessels by CTV. Crewmembers disembark when the foreign-flagged vessels return to the same U.S. port.
The Passenger Vessel Services Act ("PVSA"), 46 U.S.C. 55103, provides, in relevant part:
(a) In General. 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.[47]
The applicable regulation at 19 CFR 4.50(b) defines a passenger as "any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business."
In accordance with previous CBP rulings, individuals transported between coastwise points are not classified as "passengers" within the meaning of 46 U.S.C. 55103 and 19 CFR 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.[48] We have previously determined that CLV crew members directly and substantially connected with the laying of submarine electric transmission cables are not considered "passengers" within the meaning of 46 U.S.C. 55103 and 19 CFR 4.50(b).[49]
Here, scenario 2 would not violate the PVSA because the project crew are being transported between coastwise points (from the U.S. port to the offshore station, and back) by coastwise-qualified CTVs.
Regarding scenarios 1 and 3 above, each of the crewmembers described by your client will perform a range of technical, engineering, surveying, compliance, and supervisory functions aboard these vessels. Because each of the individuals identified performs duties directly and substantially connected to the operation or navigation of the subject vessels, they are not passengers within the meaning of 46 U.S.C. 55103 and 19 CFR 4.50(b). Therefore, there is no violation of the PVSA.
HOLDING
1. The relocation of boulders by a non-coastwise qualified vessel as contemplated above would not violate the Jones Act, 46 U.S.C. 55102, or the Dredging Statute, 46 U.S.C. 55109.
2. The transportation and laying of cable as contemplated above would not violate the Jones Act, 46 U.S.C. 55102.
3. The transportation of cable installation equipment as contemplated above would not violate the Jones Act, 46 U.S.C. 55102.
4. The performance of cable jointing operations, and transportation of associated equipment including joint habitats and temporary cable hang-offs as contemplated above would not violate the Jones Act, 46 U.S.C. 55102.
5. The performance of cable pull-in operations as contemplated above would not violate the Jones Act, 46 U.S.C. 55102.
6. The transportation of free issued items considered merchandise between U.S. ports, as contemplated above, would violate the Jones Act. The transportation of other "free issued items" considered vessel equipment between different U.S. ports as contemplated above would not violate the Jones Act, 46 U.S.C. 55102.
7. The performance of controlled flow excavation activities by non-coastwise qualified vessels, or trenching works conducted by a jet trenching ROV, as contemplated above would not violate the Dredging Statute, 46 U.S.C. 55109.
8. The transportation and installation of remedial cable protection items as contemplated above would not violate the Jones Act, 46 U.S.C. 55102.
9. The transportation of excess cable to a U.S. port or a foreign port by a non-coastwise qualified vessel as contemplated above would not violate the Jones Act, 46 U.S.C. 55102.
10. The transportation of marine crew personnel, as contemplated above would not violate the Passenger Vessel Services Act, 46 U.S.C. 55103.
Sincerely,
W. Richmond Beevers
Chief
Cargo Security, Carriers and Restricted Merchandise Branch
Office of Trade, Regulations and Rulings
U.S. Customs and Border Protection
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[1] You have asked this office for confidential treatment of all information contained in brackets. CBP Regulations at 19 C.F.R. 177.2(b)(7) provide that the requester of a ruling from our office may ask that privileged or confidential commercial or financial information supplied for purposes of preparing the requested ruling not be disclosed. Such requests will be considered if the information is clearly identified and the reasons for requesting that information not be disclosed are provided. If this office receives a Freedom of Information Act request for your submission, Regulations at 6 C.F.R. 5.12, et seq. regarding the disclosure of business information provide that the submitter of business information will be advised of receipt of a request for such information whenever the business submitter has in good faith designated the information as commercially or financially sensitive information. We accept your request for confidential treatment as a good faith request.
[2] [ ] CBP Ruling Request, dated (Aug. 15, 2023); Email, RE: [ ] Ruling Request, dated (Oct. 24, 2023); Email, RE: [ ] Ruling Request, dated (Dec. 14, 2023); Email, RE: [ ] Ruling Request, dated (Jan. 14, 2024); Email, RE: [ ] OCC Follow Up Items, dated (Apr. 7, 2024); Email, RE: [ ] OCC Follow Up Items, dated (May 6, 2024).
[3] Formerly 46 U.S.C. App. 883. See Pub. L. 109-304 (Oct. 6, 2006).
[4] See 46 U.S.C. 55102(a)(2).
[5] 43 U.S.C. 1333(a)(1).
[6] Gar-Con Dev., Inc. v. State, Dep't of Envtl. Regulation, 468 So. 2d 413, 414-15 (Fla. Dist. Ct. App. 1985).
[7] 46 U.S.C. 55103.
[8] The coastwise laws do not apply to the Northern Mariana Islands except as provided in section 502(b) of the Covenant To Establish a Commonwealth of the Northern Mariana Islands in Political Union With the United States of America (48 U.S.C. 1801 note). 46 U.S.C. 55101(b)(2).
[9] 46 U.S.C. 55101(a) and (b).
[10] 19 C.F.R. 4.80a(b).
[11] 19 C.F.R. 4.50(b).
[12] See HQ 116721 (Sept. 25, 2006); HQ 116659 (May 19, 2006) (referencing the "direct and substantial" test).
[13] See 46 U.S.C. 55102(a)(2).
[14] 33 CFR 2.22(a)(2).
[15] See, e.g., HQ H320052 (May 11, 2022); HQ 116111 (Jan. 30, 2004); HQ 115940 (Apr. 17, 2003); see also 53 Customs Bull. & Dec. 45, p. 95 (Dec. 18, 2019) (lateral movement of a vessel or item in the immediate vicinity of the lifting operation is not "transportation" but merely a movement subordinate to and a direct consequence of the lifting operation).
[16] 33 U.S.C. 1362 (7-8).
[17] See, e.g., HQ H318628 (June 30, 2022); HQ 115431 (Sept. 4, 2001), HQ 115333 (Apr. 27, 2001).
[18] See, e.g., HQ 114833 (Apr. 20, 2000).
[19] CBP is not analyzing in this ruling letter whether the removal of the cable seals by a third-party contractor for scrap after the CLV has departed, and/or the transportation of the cable seals by the third-party contractor after it has been removed, is compliant with the coastwise laws. Those questions will be analyzed by CBP if and when they are presented to the agency in a ruling request. CBP cautions, however, that such activity might implicate the Jones Act.
[20] See, e.g., HQ H330764 (Apr. 12, 2023); HQ H058647 (May 18, 2011).
[21] Treasury Decision 49815(4) (Mar. 13, 1939).
[22] Customs Bulletin & Decisions Vol. 53, No. 45, at 88 (Dec. 18, 2019).
[23] Id. at 88.
[24] Id. at 88-89.
[25] HQ 113137 (Jun. 27, 1994) (citing to Customs Ruling Letter 102945, Nov. 8, 1978).
[26] H326258 (Sep 15. 2023); see, e.g., H337433 (Feb. 28, 2024) (holding bolts and nuts integrated into offshore wind turbine generators to be merchandise, not vessel equipment).
[27] See, e.g., HQ H329630 (Mar. 9, 2023) (holding that the paying out of a cable with a cable protection system attached to it would not violate the Jones Act).
[28] See, id.
[29] See, e.g., HQ H330764 (Apr. 12, 2023); HQ H311603 (Aug. 31, 2020).
[30] See HQ 113711 (Nov. 26, 1996).
[31] Id.
[32] See, e.g., HQ H330764 (Apr. 12, 2023); HQ H058647 (May 18, 2011).
[33] Treasury Decision 49815(4) (Mar. 13, 1939).
[34] See, e.g., HQ H330764 (Apr. 12, 2023); HQ 113711 (Nov. 26, 1996).
[35] See HQ H322618l (Mar. 25, 2022); HQ 103692 (Dec. 28, 1978), published as Customs Service Decision (C.S.D.) 79-331; HQ 109108 (Nov.13, 1987); HQ 109910 (Jan. 26, 1989), published as C.S.D. 89-64.
[36] HQ 113223 (Sept. 29, 1994); see also, HQ H321256 (Nov. 2, 2021) (holding that a tracked device that utilized water jets and a cutting wheel or digging chain for simultaneous laying and burying of cable did not constitute "dredging").
[37] See HQ H311603 (Aug. 31, 2020), HQ 115646 (Apr. 12, 2002) (holding that a "jet plow" consisting of blades and multiple nozzles found not to be "dredging"); HQ H012082 (Aug. 27, 2007) ("holding that jetting action resulting in the emulsification of the seabed surrounding the cable" not "dredging").
[38] See HQ 109412 (Mar. 29, 1988), published at C.S.D. 88-7.
[39] Compare HQ H322618l (Mar. 25, 2022) with HQ 115580 (Mar. 20, 2002).
[40] CBP is not analyzing in this ruling letter whether the detachment of the cable pullheads from the cable and/or the subsequent transportation of the detached cable pullheads is compliant with the coastwise laws. Those questions will be analyzed by CBP if and when they are presented to the agency in a ruling request. CBP cautions, however, that such activity might implicate the Jones Act.
[41] HQ H329630 (Mar. 9, 2023).
[42] See, e.g., H329630 (Mar. 9, 2023)(stating paying out of a cable with cable protection system already attached would not violate the Jones Act).
[43] HQ H327804 (Sep. 2, 2022).
[44] See Customs Bulletin & Decisions Vol. 53, No. 45, at 88 (Dec. 18, 2019).
[45] See Customs Bulletin & Decisions Vol. 53, No. 45, at 88-89 (Dec. 18, 2019).
[46] See HQ H327804 (Sep. 2, 2022); HQ 105644 (June 7, 1982).
[47] See 85 Fed. Reg. 36469 at 36471 (June 17, 2020) (updating penalties for 2020).
[48] See, e.g., HQ H316313 (Feb. 4, 2021); HQ H311603 (Aug. 31, 2020); HQ H183157 (Sept. 2, 2011); HQ H168214 (May 26, 2011); HQ H036016 (Aug. 29, 2008).
[49] See HQ H330764 (Apr. 12, 2023).
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