HQ 112209: Coastwise; Foreign-Flag Vessel; Sixth Proviso; Stevedoring Equipment; Cranes; Grabs; Excavator; 46 U.S.C. App. 883.

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 112209

                         April 23, 1992

VES-3-17/3-20   CO:R:IT:C  112209  JBW

CATEGORY:   Carriers

Jim McKay
Southern Star Shipping Co.
245 Park Avenue
New York, New York 10167-0248

RE:  Coastwise; Foreign-Flag Vessel; Sixth Proviso; Stevedoring
     Equipment; Cranes; Grabs; Excavator; 46 U.S.C. App. 883.

Dear Mr. McKay:

     This letter is in response to your facsimile transmission of
April 21, 1992, in which you request a ruling on the application
of the coastwise laws to the transportation of certain grabs and
excavators for use in unlading scrap steel.

FACTS:

     Your company acts as vessel agent for a shipping company
that intends to transport scrap steel between Portsmouth, New
Hampshire, and Matanzas, Venezuela.  The vessel that will be used
to transport the scrap steel is the M/V CHRISTINA C, a Greek-
registered bulk carrier.  In order to unload this cargo in
Venezuela, you state that you must have on board two excavators
and four orange peel-type grabs for use with the ship's cranes.
The excavators are required to move the steel to a place in the
hold of the ship to permit the grabs to remove the steel.  The
excavators and grabs have been transported by land from Florida
to New Hampshire for loading on the vessel.  After the discharge
of the cargo in Venezuela, the excavators and grabs will be
returned to an unspecified point in the United States either by
the CHRISTINA C or by another vessel.  You state that the
excavators and grabs are owned by the vessel operator and will
be transported without freight charge.

ISSUE:

     Whether a Greek-registered ship may transport in the
coastwise trade excavators and grabs that will be used to unload
scrap steel from the ship.
LAW AND ANALYSIS:

     Section 883 of Title 46, United States Code Appendix,
provides, in pertinent part:

          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...), between points in the United
          States, including Districts, Territories, and
          possessions thereof 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....

46 U.S.C. App. 883.  The Customs Service has ruled that a point
within the territorial waters of the United States is 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, seaward of the territorial sea
baseline, and to points located in internal waters, landward of
the territorial sea baseline, in cases where the baseline and
the coastline differ.

     Pursuant to the sixth proviso of 46 U.S.C. App. 883, the
prohibitions contained in that section do not apply to the
coastwise transportation of, among other items, stevedoring
equipment in vessels of foreign nations that are found to extend
reciprocal privileges to vessels of the United States.  The
foreign nations that have been found to extend these privileges
to vessels of the United States are listed in section 4.93(b)(2)
of the Customs Regulations; Greece is among those countries.  The
CHRISTINA C, as a Greek-registered vessel, may transport
stevedoring equipment.

     Having found that the vessel may be used to transport
stevedoring equipment, we must determine whether the items to be
transported qualify as stevedoring equipment subject to the
exception.  The Customs Service considers items qualifying as
stevedoring equipment to be limited to equipment that is
necessary to unlade cargo from its place of stowage aboard a
vessel to its first place of rest on the shore or to lade cargo
from its last place of rest on the shore to its place of stowage
aboard a vessel.  T.D. 91-87, 56 Fed. Reg. 51168, 51169 (October
10, 1991).  This definition eliminates from consideration any
equipment used to manipulate cargo while it is ashore.  Id.
Further, the statute requires that the stevedoring equipment be
owned or leased by the owner or operator of the vessel or the
stevedoring company and that the equipment be transported without
charge for use in the handling of cargo in the foreign trade.  46
U.S.C. App. 883; 19 C.F.R. 4.93(a)(2).

     From these definitions, we determine that the excavators and
the grabs may be transported by the subject vessel under the
exemption provided for by the sixth proviso.  The excavators and
grabs are necessary to unlade the particular cargo being carried
by the vessel.  The equipment is owned by the vessel operator and
will be transported without freight charge.  We note, however,
that the items being transported may be used in a variety of
situations not related to the loading and unloading of cargo.
Consequently, our determination that the excavators and grabs
qualify as stevedoring equipment is restricted to the
transportation and use of these items on the subject vessel.  Any
use of these items for purposes other than unlading the scrap
steel from its place of stowage on the vessel will result in a
violation of 46 U.S.C. App. 883 upon the return of these items
to the United States, unless they are returned to their point of
lading.

     Finally, you raise the possibility that the equipment will
be returned to the United States in a vessel other than the
CHRISTINA C.  The law requires that the vessel providing the
transportation must, itself, be the object of use of the
stevedoring equipment.  T.D. 91-87.  Consequently, any vessel
other than the CHRISTINA C that provides the return
transportation for the excavators and grabs must either use this
equipment for the loading or unloading of cargo or operate with a
coastwise endorsement.

HOLDING:

     The excavators and the grabs described above may be
transported by the subject vessel under the exemptions provided
for by the sixth proviso.  Our determination that the excavators
and grabs qualify as stevedoring equipment is restricted to the
transportation and use of these items on the vessel.  Any use of
these items for purposes other than unlading the scrap steel from
its place of stowage on the vessel will result in a violation of
46 U.S.C. App. 883 upon the return of these items to the United
States, unless they are returned to their point of lading.


                              Sincerely,



                              B. James Fritz
                              Chief
                              Carrier Rulings Branch