HQ 226762: 46 U.S.C. App. 316(a), 883; Coastwise transportation ofmerchandise; Transfer vessel

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  226762 

                                February 28, 1996

VES-3-RR:IT:EC   226762 GOB

CATEGORY:    Carriers

R. Keith Jarrett, Esq.
Liskow & Lewis
One Shell Square
701 Poydras Street
Suite 5000
New Orleans, LA 70139-5099

RE:  46 U.S.C. App. 316(a), 883; Coastwise transportation of
merchandise; Transfer    vessel

Dear Mr. Jarrett:

     This is in response to your letter dated February 23, 1996.  

FACTS:

     Your letter states:

     Our client, a U.S. corporation, contemplates constructing a
     nonself-propelled mid-stream commodity transfer vessel ("the
     transfer vessel") using a barge hull built in the United
     States fitted with sophisticated dust-free transfer
     equipment manufactured in the Netherlands.  The vessel will
     neither store nor transport cargo.  Instead, it will be used
     to offload all manners of dusty commodities such as aluminum
     silica from ocean-going vessels moored in the river.  The
     exact process will work like this.  The ocean-going vessel
     will tie off to a mid-stream mooring buoy.  The commodity
     transfer vessel will be towed into position alongside the
     ocean-going ship where it will be tied off to the ship. 
     River barges will be brought along the outboard side of the
     transfer rig and tied off.  Using a suction nozzle, the
     dusty commodity will be offloaded from the ship and
     transferred by an air slide into the hopper barges.  Any
     movement of the transfer vessel will be incidental to its
     operation.

     
     In essence, as you further described to a member of my
staff, the transfer vessel acts as a conduit between the ocean-going vessel from which the dusty commodity will be unladed and
the hopper barges onto which the dusty commodity will be laded.

ISSUE:

     Is the activity of the transfer vessel, as described supra,
violative of 46 U.S.C. App. 883?

LAW AND ANALYSIS:

     Generally, the coastwise laws prohibit the transportation of
passengers or merchandise between points in the United States
embraced within the coastwise laws in any vessel other than a
vessel built in, documented under the laws of, and owned by
citizens of the United States.

     46 U.S.C. App. 883, the coastwise merchandise statute often
called the "Jones Act," 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, documented under the laws of, and owned by
citizens of the United States.

     19 U.S.C. 1401(c) defines "merchandise," in pertinent part,
as follows: "goods, wares, and chattels of every description..."

     46 U.S.C. App. 316(a) prohibits the use of a non-coastwise-qualified vessel to tow any vessel, other than a vessel in
distress, between ports or places in the United States embraced
within the coastwise laws, either directly or by way of a foreign
port, or to do any part of such towing, or to tow any such vessel
between points in a harbor of the United States.

     The coastwise laws generally apply to points in the
territorial sea, which is 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. 

     Your letter of February 23, 1996 excerpted Ruling 109831
dated November 14, 1988, which stated in pertinent part:

     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.  (Emphasis in
     original.)

     After a consideration of this issue, we determine that the
activity of the transfer vessel, as described supra, is not
violative of 46 U.S.C. App. 883.  As was the case in Ruling
109831, supra, no movement of the merchandise, i.e., the dusty
commodity, is  effected by movement of the transfer vessel.

HOLDING:

     As detailed supra, the activity of the transfer vessel is
not violative of 46 U.S.C. App. 883.

                              
                              Sincerely,



                              Director, 
                              International Trade Compliance
Division