HQ 109831: Request for Ruling on "Coastwise Trade"

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 109831

                                   November 14, 1988

            VES-3 CO:R:P:C 109831

            CATEGORY: Carriers

            Harold K. Watson, Esq.
            Liddell, Sapp, Zivley, Hill & LaBoon
            Texas Commerce Tower
            Houston, Texas 77002

            RE:  Request for Ruling on "Coastwise Trade"

            Dear Mr. Watson:

                 This is in reference to your letter of October 24,
            1988, requesting a ruling as to whether certain
            floating cranes would be permitted to engage in stevedoring
            activities in the United States.

            FACTS:

                 Your client, a U.S. corporation, wishes to purchase
            two floating cranes for use in the United States.  These
            cranes were built in the United States and subsequently
            sold to non- U.S. interests for use in stevedoring
            operations in a foreign country.  The subject cranes would
            not be used to transport cargo.  Rather, they would remain
            stationary while loading and unloading bulk cargoes from
            ship to shore or from shore to ship.

            ISSUE:

                 Whether the use of U.S.-built, foreign-owned floating
            cranes subsequently sold to a U.S. corporation for
            stevedoring operations in the United States would be
            prohibited by 46 U.S.C. App. 883.

            LAW AND ANALYSIS:

                 Title 46, United States Code Appendix, section 883 (46
            U.S.C. App. 883), 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.  As interpreted by
            the Customs Service, section 883 also prohibits the
            engagement in the coastwise trade by any vessel which had
            the right to engage in the coastwise trade but was sold
            foreign, in whole or in part, or was placed under foreign
            registry.

                 The Customs Service has long held that the use of a
            non-coastwise-qualified crane vessel to load and unload
            cargo is not coastwise trade and does not violate 46 U.S.C.
            App. 883, provided, that any movement of the merchandise is
            effected exclusively by the operation of the crane and not
            by movement of the vessel, except for necessary movement
            which is incidental to a lifting operation while it is
            taking place.  However, movement of merchandise while it is
            suspended from the crane, even between two points within a
            harbor, which is effected by a movement of the vessel which
            is neither necessary nor incidental to a lifting operation
            by the crane would constitute coastwise transportation of
            merchandise within the purview of 46 U.S.C. App. 883.

                 Accordingly, the use of the non-coastwise-qualified
            floating cranes as described above, would not violate the
            coastwise laws, assuming that no part of the movement of
            the bulk cargoes being loaded or unloaded is effected by a
            movement of the floating cranes which is neither necessary
            nor incidental to the lifting operation by the cranes.

            HOLDING:

                 The use of U.S.-built, foreign-owned floating cranes
            subsequently sold to a U.S. corporation for stevedoring
            operations in the United States would not be prohibited by
            46 U.S.C. App. 883, provided, that no part of the movement
            of the bulk cargoes being loaded or unloaded is effected by
            a movement of the crane vessels which is neither necessary
            nor incidental to the lifting operations by the cranes.

                                         Sincerely,




                                         B. James Fritz
                                         Chief
                                         Carrier Rulings Branch