HQ 112581: Dredging; Coastwise Trade; 46 U.S.C. App. 292, 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 112581

                        February 22, 1993

VES-3/10-02-CO:R:IT:C 112581 GEV

CATEGORY:  Carriers

Thomas L. Wescott
708 Fourth Ave.
Laurel, Montana 59044

RE:  Dredging; Coastwise Trade; 46 U.S.C. App. 292, 883

Dear Mr. Wescott:

     This is in response to your letter dated January 3, 1993,
regarding the M/V ATLANTIC AMERICAN.  Your letter enclosed copies
of the vessel's Certificate of Inspection and Certificate of
Documentation.  Our ruling on this matter is set forth below.

FACTS:

     The M/V ATLANTIC AMERICAN is an oceangoing, self-propelled
hopper dredge issued a Certificate of Documentation from the U.S.
Coast Guard endorsed with coastwise, Great Lakes, and registry
endorsements.  The contractual obligations of the vessel include
three geographical scenarios:  (1) operating wholly within U.S.
waters; (2) daily round trips to international waters and back;
and (3) operating continuously outside U.S. waters.  During these
three scenarios, the vessel is neither calling at port nor tying
up to a pier, but is continuously engaging in dredging operations.

     In addition to the geographical considerations discussed
above, the subject vessel has three modes of operation:  (1)
continuously engaging in dredging operations ceasing only for
weather, broken machinery, etc.; (2) suspending dredging operations
temporarily in order to sail to a fuel dock located in U.S. waters
for fuel and water; and (3) sailing from one U.S. port to another
such port, not dredging and not "on contract".

ISSUE:

     Whether geographical area and/or mode of operation are
determinative as to a dredge's use in the coastwise trade within
the meaning of 46 U.S.C. App. 883 commensurate with its
documentation pursuant to 46 U.S.C. 12106. 


                              - 2 -

LAW AND ANALYSIS:

     Title 46, United States Code Appendix,   292 (46 U.S.C. App.
292), provides that "a foreign-built dredge shall not, under
penalty of forfeiture, engage in dredging in the United States
unless documented as a vessel of the United States."  In our
interpretation of this statute, we have ruled that dredging in the
United States is prohibited by any foreign-built dredging vessel
except one of those named in   2 of the Act of 1906 (Customs
Service Decision (C.S.D.) 85-11).

     Title 46, United States Code Appendix,   883 (46 U.S.C. App.
883), the coastwise merchandise statute often called the "Jones
Act"), provides in part, that no merchandise shall 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 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 (i.e., a coastwise-qualified
vessel).  

     The coastwise laws administered by the Customs Service, which
include, inter alia, 46 U.S.C. App. 292 and 883, are applicable
only to those vessels engaged in activities in U.S. territorial
waters generally 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, in cases
where the baseline and the coastline differ.  In addition, pursuant
to   4(a) of the Outer Continental Shelf Lands Act (43 U.S.C.
1333(a)), Customs has held that dredging on the outer continental
shelf outside United States territorial waters constitutes
"dredging in the United States" for purposes of 46 U.S.C. App. 292
(C.S.D. 85-11).

     Furthermore, Public Law 100-329 (100 Stat. 508; effective June
7, 1988) amended 46 U.S.C. App. 883 to apply to the transportation
of "...valueless material or any dredged material regardless of
whether it has commercial value, from a point or place in the
United States or a point or place on the high seas within the
Exclusive Economic Zone as defined in the Presidential Proclamation
of March 10, 1983, to another point or place in the United States
or a point or place on the high seas within the Exclusive Economic
Zone..."  (emphasis added)  The Exclusive Economic Zone is defined
in Presidential Proclamation 5030 of March 10, 1983 (48 FR 10605),
as extending outward for 200 nautical miles from the baseline from
which the territorial sea is measured.
                              - 3 -
     
     Accordingly, although the scenarios set forth in your letter
do not sufficiently specify the geographical area (i.e., internal
waters, territorial sea, OCS or beyond) or the mode of operation
(dredging only, or a combination of dredging and transportation of
merchandise, valueless material, and/or dredged material) for the
subject vessel, you should know that Customs has held that the act
of dredging while at anchor or moving about is not, in and of
itself, considered to be coastwise trade for purposes of 46 U.S.C.
App. 883 (C.S.D. 85-11).  However, the transportation of
merchandise, valueless material, and/or dredged material between
points embraced within the coastwise laws (including points in U.S.
territorial waters and/or the EEZ, as discussed above) is coastwise
trade and is prohibited unless performed by a vessel that is U.S.-
built, owned and documented.  In view of the fact that the M/V
ATLANTIC AMERICAN has been issued a Certificate of Documentation
from the U.S. Coast Guard endorsed with coastwise, Great Lakes, and
registry endorsements, there appears to be no impediment to its
fulfilling its contractual obligations insofar as Customs
administration of 46 U.S.C. App. 292 and 883 are concerned.

HOLDING:

     The geographical area and mode of operation are determinative
as to a dredge's use in the coastwise trade within the meaning of
46 U.S.C. App. 883 commensurate with its documentation pursuant to
46 U.S.C. 12106.

                                   Sincerely,




                                   Acting Chief