HQ 110864: Coastwise transportation of goods from British Columbia, Canada to the Yukon Territory in Canada via Seattle, Washington, to Skagway, Alaska on a coastwise-qualified vessel.

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 110864

                         August 16, 1990

VES-3-VES-10-03 CO:R:P:C  110864 BEW

CATEGORY:  Carriers

Mr. J. C. Thomas
Ladner Downs
2100 Pacific Centre South
P.O Box 10021
700 West Georgia Street
Vancouver, Canada VTY1AS

RE:  Coastwise transportation of goods from British Columbia,
     Canada to the Yukon Territory in Canada via Seattle,
     Washington, to Skagway, Alaska on a coastwise-qualified
     vessel.

Dear Mr. Thomas:

     This is in reference to your letter in which you requested a
ruling on the application of the coastwise laws to a proposed
transportation of merchandise from Kamloops, British Columbia, to
the Yukon Territory.

FACTS:

     You state MOLY-COP produces over 60,000 metric tonnes per
year for sale primarily in Canada, and that MOLY-COP has been
negotiating the sale of medium to a mining operation situation in
the Yukon Territory.  You state that the most advantageous way to
ship the medium to the Yukon is to ship it by rail or truck in
bond from Kamloops to Seattle, where it would be loaded on a
fully qualified U.S. bottomed vessel which is owned and operated
by Alaska Marine Line.  Alaska Marine Line would transport the
goods to Skagway, Alaska, where it would be offloaded on to
trucks for transportation to its ultimate destination.  You ask
whether the shipment of goods in such a manner is a violation of
the coastwise laws.

ISSUE:

     Whether the transportation on a coastwise-qualified vessel
of in-bond goods being shipped from British Columbia to the Yukon
via Seattle, Washington, to Skagway, Alaska, is considered
coastwise trade and subject to the coastwise laws.

LAW AND ANALYSIS:

     Generally, the coastwise laws (e.g., 46 U.S.C. App. 289 and
883, and 46 U.S.C. 12106 and 12110) prohibit the transportation
of merchandise or passengers between points in the United States
embraced within the coastwise laws in any vessel other than a
vessel built in and documented under the laws of the United
States, and owned by persons who are citizens of the United
States.

     The coastwise law pertaining to the transportation of
merchandise, section 27 of the Act of June 5, 1920, as amended
(41 Stat. 999; 46 U.S.C. App. 883, often called the Jones Act),
provides that:

          No merchandise shall be transported by water,
          or by land and water, on penalty of
          forfeiture of the merchandise (or a monetary
          amount up to the value thereof as determined
          by the Secretary of the Treasury, or the
          actual cost of the transportation, whichever
          is greater, to be recovered from any
          consignor, seller, owner, importer,
          consignee, agent, or other person or persons
          so transporting or causing said merchandise
          to 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 other vessel than a
          vessel built in and documented under the laws
          of the United States and owned by persons who
          are citizens of the United States ....

     For purposes of the coastwise laws, a point in United States
territorial waters is considered a point embraced within the
coastwise laws.  The territorial waters of the United States
consist of the territorial sea, defined as the belt, 3 nautical
miles wide, adjacent to the coast of the United States and
seaward of the territorial sea baseline.

     "Merchandise," as used in section 883, includes any
article, including valueless merchandise pursuant to the recent
amendment of section 883 by the Act of June 7, 1988 (Public Law
100-329; 102 Stat. 588).

     The coastwise laws's prohibitions are against the use of
foreign-flag or non-coastwise-qualified U.S. vessels.  The
transportation of the goods from port to port or point to point
within the territorial waters of the United States is permitted
on vessels which are documented for the coastwise trade.  The
transportation of the subject goods from Seattle, Washington, to
the Skagway, Alaska, would be considered coastwise transportation
and coastwise-qualified vessels must be used for such
transportation.

HOLDING:

     Transportation of goods from British Columbia, Canada, to
the Yukon Territory using a coastwise-qualified vessel for the
leg from Seattle to Alaska would not be prohibited under the
provisions of the coastwise laws, specifically 46 U.S.C. App.
883.

                                     Sincerely,




                                     B. James Fritz
                                     Chief
                                     Carrier Rulings Branch