HQ 113132: Coastwise Trade; Foreign Trade Zone; 19 U.S.C. 81e

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 113132 DEC

                           June 9, 1994

VES-3-14-CO:R:IT:C  113132 DEC

CATEGORY:  Carriers

Mr. Bruce Stein
Aufrichtig, Stein & Aufrichtig, P.C.
Fifth Floor
300 East Forty Second Street
New York, New York  10017

RE:  Coastwise Trade; Foreign Trade Zone; 19 U.S.C. 81e

Dear Mr. Stein:

     This ruling is in response to your facsimile transmittal of
June 7, 1994, in which you inquired as to the legality of using a
non-coastwise qualified vessel to transport gasoline from a
foreign trade zone in Puerto Rico to Connecticut.

FACTS:

     In your correspondence with the Customs Service, you
indicate that your client plans to transport foreign-produced
gasoline from Brazil to Puerto Rico, the Dominican Republic, and
Connecticut.  Since the first two ports present draft
restrictions, the vessel plans to discharge 40,000 barrels of
gasoline in a Puerto Rican foreign trade zone before making its
first delivery in San Juan.  The vessel will then proceed to the
Dominican Republic to make its second delivery.  Subsequently,
the vessel will return to the Puerto Rican foreign trade zone to
retrieve the 40,000 gallons of gasoline and make its final
delivery of gasoline in Connecticut.

ISSUE:

     Whether the use of a non-coastwise qualified vessel to
transport merchandise from a Puerto Rican foreign trade zone to
Connecticut violates the coastwise laws.






LAW AND ANALYSIS:

     The coastwise law pertaining to the transportation of
merchandise, as amended (41 U.S.C. app. 883, often called the
Jones Act), provides that:


          No merchandise, including merchandise owned by the
     United    States Government . . . shall be transported
     by water, or by land     and water . . . 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 . . ..

     For purposes of the coastwise laws, a point in the United
States territorial waters is considered a point embraced within
the coastwise laws.  The territorial waters of the United States
consist of the territorial sea, defined as the belt, three
nautical miles wide, adjacent to the coast of the United States
and seaward of the territorial sea baseline.

     Title 19, United States Code, section 81e addresses the
issue of vessels entering or leaving a foreign trade zone and
provides that  

          Vessels entering or leaving a zone shall be subject
          to the operation of all the laws of the United States,
          except as otherwise provided in this chapter, and
          vessels leaving a zone and arriving in customs
territory
          of the United States shall be subject to such
          regulations to protect the revenue as may be prescribed
          by the Secretary of the Treasury.  Nothing in this
          chapter shall be construed in any manner so as to
permit
          vessels under foreign flags to carry goods or
merchandise
          shipped from one foreign trade zone to another zone or
          port in the protected coastwise trade of the United
          States.

19 U.S.C. 81e (1993).

     The transportation of gasoline laded in a Puerto Rican
foreign trade zone and transported to Connecticut where it is to
be unladed constitutes a coastwise movement of merchandise that
is subject to the restrictions of the coastwise laws.





HOLDING:

     Merchandise transported from a United States foreign trade
zone to another port of the United States embraced within the
coastwise laws must be conveyed via a coastwise-qualified vessel.

     The contemplated transport of gasoline from a Puerto Rican
foreign trade zone to Connecticut aboard a foreign vessel would
constitute a violation of the coastwise laws.

                              Sincerely,



                              Arthur P. Schifflin
                              Chief
                              Carrier Rulings Branch