HQ 109716: Applicability of Public Law 100-239 (Anti Reflagging Act of 1987), Amending the Definition of "Fisheries" in 46 U.S.C. 12101, to Fixed-Position Foreign-Built, Foreign- Flag Processing 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 109716

                                    October 4, 1988

            VES-7-02 CO:R:P:C 109716 LLB

            CATEGORY:  Carriers


            Mr. Greg Fisk
            Maretec Alaska
            130 Seward Street, No. 405
            Juneau, Alaska 99801

            RE:  Applicability of Public Law 100-239 (Anti Reflagging Act
                 of 1987), Amending the Definition of "Fisheries" in 46
                 U.S.C. 12101, to Fixed-Position Foreign-Built, Foreign-
                 Flag Processing Vessel

            Dear Mr. Fisk:

                 This is in response to your letter of August 29, 1988, in
            which you request a ruling on the possible use of a foreign-
            built and registered fish processing vessel in a near-shore
            remote location in Alaska.

            FACTS:

                 It is your plan to purchase the subject vessel and take
            various steps to ensure that it will not be susceptible to use
            in the transportation of fish or other materials.  You indicate
            that you will accomplish this through the following means:

                 1.  disabling or removing steering gear and rudder;

                 2.  disabling or removing propulsion machinery (propellers
                     and shafts), save that main engines would remain as
                     generator units;

                 3.  permanently fixing the vessel in place by means of
                     piles and/or fixed anchors;

                 4.  provision of permanent access from shore to/from the
                     vessel for vehicles and pedestrians; and

                 5.  connection of the floating dock to shore water utility
                     and inter-connecting the vessel's electrical
                     generating capacity with the shore utility.













                                         - 2 -


                 It is our understanding that the steps listed above will
            be accomplished once the vessel is in the U.S., and that at the
            time it arrives it will be an operational processing vessel.
            As such, the vessel would be exempt from consumption entry and
            payment of tariff duties under the Tariff Schedules of the
            United States (TSUS) by operation of General Headnote 5(g),
            thereof (19 U.S.C. 1202, General Headnote 5(g)).

            ISSUE:

                 Two issues are presented for resolution.  The first is
            whether, following the various disabling operations detailed
            above, the processor may properly be considered a "vessel"
            within the contemplation of title 46, United States Code App.
            section 12101, as amended by Pub. L. 100-239 (101 Stat 1778),
            commonly known as the  Anti-Reflagging Act of 1987.

                 The second issue is whether a non-qualified vessel
            operating as a fish processing plant from a stationary
            position, is operating in violation of the amended statute.

            LAW AND ANALYSIS:

                 The primary purpose of the Commercial Industry Vessel
            Anti-Reflagging Act of 1987 (Pub. L. 100-239; 101 Stat 1778),
            was to preclude the use of foreign-built processing vessels in
            U.S. waters, including those within the United States Exclusive
            Economic Zone (EEZ).  By detailing such extensive disabling
            measures it is no doubt sought to be established that the
            processor, once in use as such, should not be regarded as a
            "vessel" meant to be proscribed from operation by statute.

                 Section 12101 of title 46, United States Code App. (46
            U.S.C. App. 12101), the statute amended by the Anti-Reflagging
            Act, does not define the term "vessel".  Section 12101 is
            contained within Subtitle II of title 46 which does contain a
            general definition section at section 2101, wherein it is
            provided that "'vessel' has the same meaning given that term in
            section 3 of title 1."  (46 U.S.C. App. 2101(45))

                 Section 3 of title 1, United States Code (1 U.S.C. 3),
            provides, in its entirety:

                 The word "vessel" includes every description of water
                 craft or other artificial contrivance used, or
                 capable of being used, as a means of transportation
                 on water.

                 The definition has been cited in a significant body of












                                         - 3 -


            court cases.  The factors which are generally determinative in
            deciding whether a structure is considered a "vessel" are well
            set forth in the case of McCarthy v. The Bark Peking, 716 F.2d
            130 (1983).  The court in that case interpreted the definition
            of vessel in 1 U.S.C. 3, albeit for a different purpose than
            that presently under consideration.  The facts concerning the
            condition and use of the PEKING are, however, quite relevant to
            this inquiry.  The PEKING was a museum vessel on exhibit at the
            South Street Seaport Museum in New York.  Its rudder had been
            welded in one position and it had not put to sea under its own
            power for half a century.  The court found the section 3
            definition of vessel to be applicable, stating:

                 ...virtually any capacity for use as seagoing
                 transportation - perhaps even the hypothetically plausible
                 possibility - has sufficed to lend the dignity of "vessel"
                 status to a host of seemingly unlikely craft.  McCarthy,
                 supra., at 134.

            It is the residual capacity for use as a vessel, even if a
            remote capacity under tow, that retains for a vessel that
            status.

                 Most closely resembling the facts here under consideration
            were those before the court in the case of Pleason v. Gulfport
            Shipbuilding Corporation, 221 F.2d 621 (1955), a case where the
            court considered whether a former U.S. Navy vessel, converted
            to a stationary shrimp processing plant was, in fact, a vessel
            within the meaning of 1 U.S.C. 3.  The vessel had no propellers
            or shaft, no crew, no operable machinery, no light, heat or
            power in operation.  The main engines and steering apparatus,
            with the exception of the rudder, had been removed.  It was
            lashed to shore by ropes and steel cables from which stationary
            position it processed shrimp.  Telephone and electricity were
            supplied from shore facilities.  Even so, the court found it to
            be a vessel since it retained that elusive residual capacity to
            be used as a vessel.  In the words of the court it
            "...definitely was capable of being used as a means of
            transportation under tow."  (Pleason, supra., at 623)  The
            definition of "vessel" within the meaning of 1 U.S.C. 3 has
            been very broadly construed, even to the point of moving
            one court to find that:

                 No doubt the three men in a tub would also fit within
                 our definition, and one probably could make a
                 convincing case for Jonah inside the whale.  Burks v.
                 American River Transportation Company, 697 F.2d 69
                 (1982), at p. 75.













                                         - 4 -


                 The incoming ruling request states that the amendments
            known as the Anti-Reglagging Act, "...specifically preclude the
            use of foreign vessels in processing at sea."  Our reading of
            the amended definition of "fisheries" now appearing in 46
            U.S.C. 12101(a)(1), reveals restrictions on mere processing "in
            the navigable waters" of the United States.  The statute does
            not contemplate that a vessel need be at sea, or even underway
            in order to come within the orbit of its restrictions.  It is
            enough that it performs its processing function while located
            in navigable waters.

            HOLDING:

                 In light of the broad scope applied by courts to the
            definition of a "vessel" appearing in 1 U.S.C. 3 (made
            applicable to 46 U.S.C. App. 12101 through 46 U.S.C. App. 2101
            (45)), and, further, based upon the clear and unambigous
            wording of the definition of "fisheries" appearing in 46 U.S.C.
            App. 12101, we find that the foreign-built fish processing
            vessel here under consideration may not operate from a
            permanently stationary position in the navigable waters of the
            United States.

                                         Sincerely,




                                         John E. Elkins
                                         Acting Director,
                                         Regulatory Procedures
                                         and Penalties Division














            CO:R:P:C:LBURTON:rk:9/28/88