HQ 112693: Coastwise Trade; Jones Act; 46 U.S.C. app. 883; Dredging; Construction; Passengers

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 112693

                            July 14, 1993

VES-3-17-CO:R:IT:C  112693 DEC

CATEGORY:  Carriers

Ms. Linda J. MacDonald
Contract Specialist
Saint Lawrence Seaway Development Corporation
P.O. Box 520
Massena, New York  13662-0520

RE:  Coastwise Trade; Jones Act; 46 U.S.C. app.  883; Dredging;
     Construction; Passengers

Dear Ms. MacDonald:

     This ruling is in response to your May 12, 1993, inquiry
concerning the eligibility of a Canadian-built vessel to be engaged
in various maintenance operations along the Saint Lawrence Seaway.

FACTS:

     The Saint Lawrence Seaway Development Corporation is in the
process of procuring a multi-purpose crane barge.  The barge will be
used for maintenance dredging as well as for construction, repair,
and maintenance of the corporation's fixed navigational aids and
docking facilities.  In addition, the barge will serve as a back up
to the corporation's buoy barge during the fall and spring buoy runs
to commission and de-commission the floating buoys during which the
buoys will be transported and placed in storage during the winter
and taken out to be re-positioned in the spring.  The barge will be
equipped with a crawl crane and the crew will consist of the
corporation's marine and trade personnel as well as a crane
operator.


ISSUES:

     1.  Whether a non-coastwise qualified vessel may engage in
maintenance dredging operations in the United States.

     2.  Whether a non-coastwise qualified vessel may engage in
maintenance operations that involve the construction, repair, and
maintenance of navigational aids and docking facilities at various
coastwise points.

     3.  Whether a non-coastwise qualified vessel may be used to
load and to drop off buoys at various coastwise points.

     4.  Whether a non-coastwise qualified vessel may use a crane to
move items between coastwise points.
                                 -2-


     5.  Whether a non-coastwise qualified vessel can transport
individuals who are connected to its navigation, ownership, or
business.

LAW AND ANALYSIS:

     Title 46, United States Code, appendix, section 292(a), states
that

           Except as provided in subsection (b) of this
           section, a vessel may engage in dredging in
           the navigable waters of the United States only if-
           . . .
                (3)  for a vessel that is at least 5 net
                     tons, the vessel is documented under
                     chapter 121 of Title 46 with a coastwise
                     endorsement.

46 U.S.C. app.   292 (1993).

     Since a foreign-built vessel is ineligible to obtain a
coastwise endorsement (46 U.S.C. app.   12106), it may not engage in
dredging operations within U.S. territory.  Consequently, a
Canadian-built vessel engaging in dredging operations in U.S.
territorial waters would be in violation of 46 U.S.C. app.   292
even if the vessel did not transport the dredged material.  The
penalty for knowingly violating this statute is "seizure by and
forfeiture to the United States Government" of the vessel in
violation.  46 U.S.C. app.   292(c)(1993).

     The issue of whether a non-coastwise qualified vessel may
engage in operations involving the construction, repair, and
maintenance of navigational aids and docking facilities depends on
the nature of the particular operation.  Pursuant to Title 19, Code
of Federal Regulations, section 4.80b, "[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, regardless of the origin or ultimate destination of the
merchandise."  19 C.F.R.   4.80b (1993).

     Therefore, your contemplated use of a non-coastwise qualified
vessel that will lade various items at a coastwise point for use in
the construction, repair, or maintenance of navigational aids and
docking facilities that results in the unlading of various items at
other coastwise points would be a violation of the coastwise laws. 
Only the items laded at one coastwise point and unladed at another
coastwise point would be the subject of the coastwise law violation. 
The tools and equipment aboard the vessel that are used to carry-
out the construction, repair, and maintenance would be the source of
a coastwise violation only if they are unladen at the worksite.  The
mere transport and use of the vessel's supplies at the various sites
would not violate the coastwise law.

                                 -3-



     Additionally, the spring and fall buoy runs to commission and
de-commission the floating buoys may constitute a coastwise
violation if performed with a non-coastwise qualified vessel. 
Whether a violation occurs depends on the location of the buoys when
they are laded and unladed.  Based on the information provided to
Customs, it appears that the buoys will be deployed from a coastwise
point (e.g. a nearby storage facility from the corporation's
headquarters in New York).  Their destinations are predominantly
points within U.S. territorial waters, but may include points in
Canadian or international points as well.  The transportation of
buoys from a U.S. storage facility to a point within the territorial
waters is a "transportation of merchandise" and must be accomplished
by a coastwise-qualified vessel.  If the buoys are being placed in
Canadian or international waters, then there are no coastwise issues
raised and the transportation would be allowed.  When the buoys are
brought back to storage, they must be transported via a coastwise
qualified vessel if they are in U.S. waters.

     Depending on how the use of the crawl crane is implemented into
the dredging and buoy run operations, a violation of the coastwise
law may arise.  The Customs Service has long held that the use of a
non-coastwise qualified crane vessel to load and unload cargo or to
construct or dismantle a marine structure is not coastwise trade and
does not violate the coastwise laws, provided, that any movement of
merchandise is effected exclusively by the operation of the crane
and not by movement of the vessel, except for necessary movement
which is incidental to a lifting operation while it is taking place. 
Thus, a crane barge could lift merchandise with its crane at one
coastwise point, be pivoted while remaining at one location, and put
down the merchandise at a place other than that from which it was
lifted.  A crane barge would be prohibited from lifting merchandise
with its crane at one coastwise point, being towed or pushed or
otherwise moving to another coastwise point while the merchandise is
suspended from the crane, and placing the merchandise at a second
coastwise point.  Headquarter Rulings 106351 (Nov. 1, 1983) and
108213 (Mar. 6, 1986).

     Title 46, United States Code, appendix, section 289 expressly
prohibits a foreign vessel from transporting "passengers between
ports or places in the United States, either directly or by way of a
foreign port. . .."  19 U.S.C. app.  289 (1992).  The Customs
Regulations define "passenger" for purposes of section 289 as "any
person carried on a vessel who is not connected with the operation
of such vessel, her navigation, ownership, or business."  19 C.F.R.
 4.50(b)(1993).  From your description of the individuals who will
be aboard (three to four marine personnel, one crane operator, and
several trade personnel), there appear to be no passenger coastwise
violations.  If additional individuals who are not connected with
the navigation, ownership, or business of the vessel are transported
between coastwise points, then there is a coastwise law violation.


                                 -4-


HOLDINGS:

     1.  A non-coastwise qualified vessel is expressly prohibited
from engaging in dredging operations at points embraced within the
coastwise laws.  46 U.S.C. app.  292 (1992).

     2.  A non-coastwise qualified vessel may engage in the
construction, repair, and maintenance of navigational aids and
docking facilities at coastwise points so long as there is no lading
of materials at one coastwise point and an unlading of the materials
at another coastwise point.

     3.  A non-coastwise qualified vessel may not be used to
transport buoys from one coastwise point to another, but may be used
to transport the buoys to or from Canadian or international waters.

     4.  A non-coastwise qualified vessel may use a crane to
transport items between coastwise points so long as the crane is the
source of the movement.  If the non-coastwise qualified vessel upon
which the crane is attached is moved, then there is a coastwise
violation.

     5.    A non-coastwise qualified vessel is permitted to
transport only individuals who are connected to its navigation,
ownership, or business.




                                     Sincerely,




                                     Acting Chief
                                     Carrier Rulings Branch