HQ 112561: Coastwise trade; Trade with Guam; Registry endorsement; Military cargoes; 46 U.S.C. 12105(b), 12112(b); 46 U.S.C. App. 883

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 112561

                          June 25, 1993
                                                                  
                                                                 
 VES-3-CO:R:IT:C  112561 LLB

CATEGORY:  Carriers

Mr. Willis R. Deming
Matson Navigation Company
333 Market Street, 30th Floor
San Francisco, California 94105-2190

RE:  Coastwise trade; Trade with Guam; Registry endorsement;
     Military cargoes; 46 U.S.C. 12105(b), 12112(b); 46 U.S.C. App.
     883

Dear Mr. Deming:

     Reference is made to your letter of December 17, 1992, which
poses certain questions regarding the use of a foreign-built,
United States-documented vessel in the transportation of
merchandise between Hawaii or the 48 contiguous states, and Guam. 

FACTS:

     Matson Navigation Company is a United States citizen
corporation for the purpose of documenting commercial vessels under
the laws of this country.  It is proposed that Matson purchase a
vessel that has been built or rebuilt outside of the United States
and which has been registered in a foreign country.  Matson intends
to document the vessel under United States law with a registry
endorsement.  Specifically, Customs is asked:

     (1)  do the provisions of   12105(b) (46 U.S.C.) permit
     transportation between the 48 contiguous states or Hawaii
     and Guam of both commercial cargo and equipment,
     materials, commodities or supplies bought by or for the
     Army, Navy, Air Force or Marine Corps with either
     appropriated funds or nonappropriated funds?

     (2)  Does   12112(b) of 46 U.S.C. permit such a vessel
     to carry commercial or military cargo identified in (1)
     above from Guam to the contiguous 48 states on the
     initial voyage from a foreign country to a port in the
     contiguous 48 states under the certificate of
     documentation and endorsement authorized by   12112(a)
     46 U.S.C.?

                              - 2 -


ISSUES:

1.  Whether a vessel documented under United States law with a
registry endorsement may be utilized in trade between the 48
contiguous states or Hawaii and Guam, and whether the answer to
that question might be altered depending upon whether the
transportation involves either commercial cargo, or supplies bought
by or for elements of the Department of Defense with appropriated
or nonappropriated funds.

2.  Whether a vessel operated under a certificate issued pursuant
to 46 U.S.C. 12112(a) may, on its first arrival in the United
States, land cargo taken aboard in Guam.

LAW AND ANALYSIS:

     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, in
pertinent part, that:

     No merchandise, including merchandise owned by the United
     States Government, a State (as defined in section 2101
     of...Title 46), or a subdivision of a State, 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 * * *.
     
     Pursuant to 46 U.S.C. App. 877, the coastwise laws are
applicable to Guam.  Under 46 U.S.C. 12105(b), however, a vessel
for which a registry is issued by the United States Coast Guard
may be employed in trade with Guam.  Under that statute and 46
U.S.C. 12102, a foreign-built, United States-owned vessel may,
under certain circumstances, be issued a registry.  In inter-
preting these statutes, the Customs Service has ruled that foreign-
built, United States-registered vessels may be used for transport
to and between points in Guam.

     Section 12112 of title 46, United States Code (46 U.S.C.
12112), provides for the issuance of provisional certificates in
advance of the formal documentation of vessels under United States
law.  The statute is in place in order to enable vessels 

                              - 3 -


purchased abroad to legally engage in trade over the course of
their first voyage to the United States, so long as the certificate
specified in subsection (a) of the statute has been issued.

     So long as a vessel is legally operating with either a
registry endorsement issued under section 12105, or a certificate
issued under section 12112, we find no requirement that its service
be limited according to the character of its cargo, whether
commercial merchandise or United States Government property. 
Further, a vessel proceeding on its initial voyage to the United
States and sailing under a provisional certificate, may transport
cargo from Guam to a port in the United States.

HOLDINGS:

1.  Vessels documented under United States law with a registry
endorsement may trade between the 48 contiguous states or Hawaii
and Guam.  Such vessels may transport either commercial or United
States Government-owned merchandise.

2.  Vessels issued a provisional certificate under 46 U.S.C. 12112
may, on their initial voyage to the United States, transport and
land in the United States, materials (commercial or United States
Government-owned) which were taken aboard in Guam.

                                  Sincerely,




                                  Acting Chief
                                  Carrier Rulings Branch