HQ 109833: Applicability of the coastwise laws to stationary vessel to be used as an oil storage facility while anchored next to an oil well, eight miles off the Coast of Texas

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 109833
                                  November 30, 1988


          VES-3-21-CO:R:P:C 109833 LLB

          CATEGORY:  Carriers

          Ms. Jeri L. Jordan
          United Texas Corporation
          Post Office Box 22763
          Houston, Texas 77227

          RE:  Applicability of the coastwise laws to stationary vessel to
               be used as an oil storage facility while anchored next to an
               oil well, eight miles off the Coast of Texas

          Dear Ms. Jordan:

               Reference is made to your letter of October 27, 1988, in
          which you request that we rule upon the proposed use of a non-
          coastwise-qualified vessel to act as a stationary oil storage
          facility while anchored next to a producing oil well located off
          the Texas Coast.

          FACTS:

               A 326 net ton Honduran-flag tanker vessel the M/T MARK III,
          has been purchased for the purpose of anchoring it next to an oil
          well owned by the vessel owner.  It is planned to "produce oil
          into the tanker for storage" from the adjacent well which is
          located eight miles off the Coast of Texas.  For the purpose of
          this ruling it is assumed that the stored oil will be removed and
          transported to either foreign or domestic ports by other vessels.

          ISSUE:

               Whether the coastwise laws are violated when a non-
          coastwise-qualified tanker vessel is anchored next to, and
          receives oil for purpose of storage from, a producing oil well
          located eight miles off the Texas Coast.























                                        - 2 -


          LAW AND ANALYSIS:

               Title 46, United States Code App., section 883 (46 U.S.C.
          App. 883) in pertinent part, prohibits the transportation of
          merchandise 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.

               Section 4(a) of the Outer Continental Shelf Lands Act of
          1953, as amended (43 U.S.C. 1333(a)) (OCSLA), provides, in
          pertinent part, that the laws of the U.S. are:

                ... extended to the subsoil and seabed of the outer
                Continental Shelf and to all artificial islands, and all
                installations and other devices permanently or temporarily
                attached to the seabed, which may be erected thereon for
                the purpose of exploring for, developing, or producing
                resources therefrom, or any such installation or other
                device (other than a ship or vessel) for the purpose of
                transporting such resources, to the same extent as if the
                outer Continental Shelf were an area of exclusive Federal
                jurisdiction located within a State...

               The Customs Service consistently has held that the use of a
          foreign-flag vessel as a storage facility does not violate the
          coastwise laws, or any other law administered by the Customs
          Service, provided that the vessel remains stationary.  Customs
          also has held that if the vessel is being loaded or unloaded and
          must be moved to another location because of stress of weather or
          other reason involving the vessel's safety, subsequently is
          returned to the same point to continue its loading or unloading,
          and loads or unloads no merchandise at any other point in the
          United States, the coastwise laws are not violated.

               Although the vessel will not be engaging in coastwise trade
          while in operation as a stationary storage facility, the point
          should be made that by virtue of its being anchored next to and
          receiving petroleum products from an oil well located on the
          outer Continental Shelf, the vessel itself will become a
          coastwise point through operation of the OCSLA.  The practical
          effect of this fact is that any vessel moving merchandise
          (including oil products) or passengers between the storage vessel
          and another coastwise point (in either direction), must itself be
          documented for the coastwise trade.















                                        - 3 -


          HOLDING:

               The use of a stationary non-coastwise-qualified storage
          vessel does not violate the coastwise laws administered by the
          Customs Service.

                                             Sincerely,




                                             B. J. Fritz
                                             Chief
                                             Carrier Rulings Branch






















          LBURTON:ga: 11/23/88