HQ 113465: Coastwise Trade; Oil Skimming Vessel; 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 113465

                          June 22, 1995

VES-3-06-R:IT:C 113465 GEV

CATEGORY: Carriers

Edward K. Roe
President 
Clean Channel Association
111 East Loop North, Room 270
Houston, Texas 77029

RE: Coastwise Trade; Oil Skimming Vessel; 46 U.S.C. App.  883

Dear Mr. Roe:

     This is in response to your letter of May 25, 1995, to Capt. George M. Williams,
Commandant G-MVI, U.S. Coast Guard (USCG) Headquarters, regarding the use of the LORI
BEAVER in oil skimming operations.  You enclosed the seller's position on this matter in your
letter.  In view of the fact that this matter is within the purview of the U.S. Customs Service, your
letter was forwarded to this office for direct response.  Our ruling is set forth below.

FACTS:

     Hyde Products of Cleveland, Ohio has offered for sale a 19 ft. work boat with a LORI
skimming system and one cubic meter of storage capacity for skimmed oil.  The boat, called the
LORI BEAVER, was exhibited at the 1993 International Oil Spill Conference and has had
considerable exposure.  It is presently stored in Houston.

     Clean Channel Association, as a potential purchaser, is concerned that since the hull of the
vessel was manufactured in Finland, its use in oil skimming operations in the United States may be
contrary to law.  The vessel is stated to be approximately four tons and would transport up to one
cubic meter of recovered oil as part of skimming operations.   
                              - 2 -

ISSUE:

     Whether the use of a foreign-built vessel in oil skimming operations in United States
waters constitutes coastwise trade in violation of 46 U.S.C. App.  883.

LAW AND ANALYSIS:

     The coastwise law pertaining to the transportation of merchandise,  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,... 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...

     The coastwise laws generally apply to points in the territorial sea, 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.  The
term "merchandise" as used in  883 includes valueless material (see amendment to  883 by the
Act of June 7, 1988, Pub.L. 100-329; 102 Stat. 588).  Furthermore, the statute provides that the
prohibitions set forth therein 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 [(EEZ)] 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 that [EEZ]."  Id.  The March 10, 1983, Presidential
Proclamation defined the EEZ as a zone contiguous to the territorial sea extending to a distance
200 nautical miles from the territorial sea baseline.
     
     From the above statutory framework, the Customs Service has concluded that the removal
of surface oil by skimming constitutes a lading of merchandise (see Headquarters Ruling 111420,
dated June 17, 1991).  The deposit of the skimmed oil at a point other than which it is laded
would constitute an unlading of merchandise.  The merchandise coastwise law (46 U.S.C. App. 
 883) prohibits the use of a non-coastwise-qualified vessel (i.e., one that is not U.S.-built, owned
and documented) for such recovery and transportation of oil in waters within its jurisdiction as
discussed above (see Headquarters Ruling 110386, dated September 29, 1989).  
                              - 3 -

     Accordingly, the use of the foreign-built LORI BEAVER in skimming operations in
waters subject to 46 U.S.C. App.  883 constitutes a violation of that statute.  Parenthetically, we
note that if in fact this vessel is less than five net tons thereby excluding it from the U.S. Coast
Guard documentation requirements (see  67.9, USCG Regulations, 46 CFR  67.9), it would
still be prohibited from engaging in the coastwise trade in view of its having been built foreign
(see  4.80(a)(2), Customs Regulations, 19 CFR  4.80(a)(2)).

HOLDING:

     The use of a foreign-built vessel in oil skimming operations in United States waters
constitutes coastwise trade in violation of 46 U.S.C. App.  883.

                              Sincerely,




                              Arthur P. Schifflin
                              Chief
                              Carrier Rulings Branch