HQ 111878: Application of the dredge statute (46 U.S.C. App. 292) to dredging in American Samoa.

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 111878

                        September 4, 1991

VES 7-03 CO:R:IT:C  111878 BEW

CATEGORY:  Carriers

Mr. Chris Costain
MK Ferguson
MK Ferguson Plaza
1500 West 3rd Street
Cleveland, Ohio

RE:  Application of the dredge statute (46 U.S.C. App. 292) to
     dredging in American Samoa.

Dear Mr. Costain:

     This is in reference to your facsimile transmission dated
August 26, 1991, in which you inquiry as to what effect the
"Federal Dredge Statute" (46 U.S.C. App. 292) has on a proposed
dredge project located in American Samoa.

FACTS:

     You state that McConnell Dowell of New Zealand is currently
bidding on a dredging contract in which it is proposed to dredge
in Loeation, a man-made shipping harbor entrance and turning
basin which has silted up over the past twenty (20) years.  The
proposed site is located in American Samoa.  You state that
McConnell Dowell intends to build a small pontoon on site and
mount a standard excavator on the pontoon for excavating the
seabed material, which will be placed on a barge and towed
ashore.  You state that the material will be removed from the
barge and trucked to the client's designated disposal site.
You ask what effect the dredging statute (46 U.S.C. App. 292) has
on this project.

ISSUES:

     1.  Whether the dredging statute is applicable to dredge
     operations performed in American Samoa.

     2.   Whether the coastwise laws are applicable to commerce
     between the islands of American Samoa and other ports of the
     United States?

LAW AND ANALYSIS:

     Section 1 of the Act of May 24, 1906 (34 Stat. 204; 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."  The Customs Service has ruled that dredging, for
purposes of 46 U.S.C. App. 292, means the use of a vessel
equipped with excavating machinery in digging up or otherwise
removing submarine material. We have long held that dredging in
United States territorial waters is dredging in the United
States, for purposes of this statute (see C.S.D. 83-106).

     In our interpretation of 46 U.S.C. App. 292, we and our
predecessor in the administration of the navigation laws, the
Bureau of Marine Navigation, have consistently held that a
foreign-built dredge (except those dredges named in section 2 of
the Act of May 28, 1906; may not engage in dredging in the United
States whether or not documented as a vessel of the United
States.

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

  Section 883 specifically provides that, for purposes of its
provisions, "merchandise" includes valueless material (Pub.L.
100-329; 102 Stat. 588).  The transportation of valueless
material, whether or not it has commercial value, from a point or
place in the United States or 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 would also be prohibited under the provisions of
section 883.

     Title 48, United States Code, section 1664 (48 U.S.C. 1664)
provides:

          The provisions of law of the United States restricting
          to vessels of the United States the transportation of
          passengers and merchandise directly or indirectly from
          any port of the United States to another port of the
          United States shall not be applicable to commerce
          beween1 the islands of American Samoa or between those
          islands and other ports under the jurisdiction of the
          United States.

          (1 So in original.  Probably should be between).

     We have ruled that the act of dredging is not a coastwise
law (rulings letter 101693 R, 103693 MKT, 104642 PH; see also
Great Lakes Dredge & Dock Co. v. Ludwig, et. al., Civ-78-185,
U.S. Dist. Ct., W. Dist., N.Y. March 26, 1980).  However, the
transportation of merchandise or passengers from or to the
dredge, or by the dredge, would be deemed coastwise trade if the
transportation were between ports or places in the United States.

HOLDING:

     1.  Since the exemption stated in 48 U.S.C. 1664 does not
     apply. The use of a foreign-built dredge to engage in
     dredging in the harbors of American Samoa is prohibited
     under 46 U.S.C. App. 292.

     2.  By virtue of the exception stated in 48 U.S.C. 1664, the
     coastwise laws are inapplicable to the transportation of the
     merchandise (dredged material) or passengers directly or
     indirectly between any port of the United States and the
     islands of American Samoa or between the islands or within
     the harbors of American Samoa.

                                     Sincerely,




                                     B. James Fritz
                                     Chief
                                     Carrier Rulings Branch