HQ 111927: Coastwise; Pipelaying; Transport Barge; 46 U.S.C. App. 883; 19 C.F.R. 4.80b(a).

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 111927

                           May 6, 1992

VES-3-16   CO:R:IT:C  111927  JBW

CATEGORY:   Carriers

Thomas A. Lorenzen
Paul, Hastings, Janofsky & Walker
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036

RE:  Coastwise; Pipelaying; Transport Barge; 46 U.S.C. App. 883;
     19 C.F.R. 4.80b(a).

Dear Mr. Lorenzen:

     This letter is in response to your request that we rule on
the application of the coastwise laws to the use of a foreign
registered barge for the transportation of pipe from the shore to
a pipelaying vessel.

FACTS:

     By letter of August 12, 1991, the Carrier Rulings Branch
issued a ruling letter in which we determined that, subject to
certain limitations, the foreign-flagged vessel the LORELAY may
be used to transport and to lay pipe in connection with the Exxon
Santa Ynez Unit Expansion Project.  We again ruled, by letter
dated September 24, 1991, that the use of cranes on the LORELAY
to load and unload work decks for movement on coastwise-qualified
vessels is permitted provided that the LORELAY remains stationary
while the cranes are being used.

     In the instant submission, you request a ruling on the
application of the coastwise laws to the use of the LORELAY's
gondola barge for the transportation of pipe between Port
Hueneme, California, and the LORELAY.  Specifically, Allseas
Marine Contractors ("Allseas"), the company contracted to install
the pipe, will load pipe in Port Hueneme into the gondola barge.
The barge will be towed by a United States-flag tug to the
LORELAY, which will either be attached to the quay, moored in the
harbor, or free-floating in the harbor.  The LORELAY will then be
ballasted to permit the barge to be moved into its hold.  You
state that once the barge is inside the LORELAY, the barge is
fixed to and actually becomes part of the hold of the vessel.
The LORELAY will then sail to the work site, which is beyond the
three mile territorial sea limit.  At the work site, the pipe
will be moved from the barge by means of elevators, cranes, or
conveyor belts to the LORELAY's "firing line" for fabrication
and laying.

ISSUE:

     Whether the transportation by a foreign-registered barge of
pipe for use in a pipe laying project is in violation of the
coastwise laws where the pipe is loaded on the barge at one
coastwise point, the barge is loaded on the pipe laying vessel
at another coastwise point, and the pipe is transferred from the
barge to the pipe laying vessel and is payed out at point not
embraced within the coastwise laws.

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....

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.

     The Customs Regulations provide that a coastwise
transportation of merchandise takes place when the merchandise is
laden at a point embraced within the coastwise laws and is
unladen a another coastwise point, regardless of the origin or
ultimate destination of the merchandise.  19 C.F.R. 4.80b(a)
(1991).  Applying this rule to the present facts, the merchandise
under consideration--the pipe--is laden on the gondola barge at
Port Hueneme, a coastwise point.  The barge in turn is moved into
the hold of the LORELAY, but at this point, no unlading of the
pipe has occurred.  The pipe is unladen for purposes of the
coastwise laws when it is moved from the gondola barge to the
LORELAY for use in the pipe laying operation.  This unlading
takes place at the work site, which is beyond the territorial
waters of the United States.  Therefore, the pipe is not unladen
at a coastwise point.  We find no violation of the coastwise
laws.  You should be aware, however, that United States law
requires that a coastwise-qualified vessel tow the barge between
the point of lading and the LORELAY.  46 U.S.C. App. 316(a).

HOLDING:

     The transportation by foreign-registered barge of pipe for
use in a pipe laying project is not in violation of the coastwise
laws where the pipe is loaded on the barge at one coastwise
point,  the barge is loaded on the pipe laying vessel at another
coastwise point, and the pipe is transferred from the barge to
the pipe laying vessel and is payed out at point not embraced
within the coastwise laws.


                              Sincerely,



                              B. James Fritz
                              Chief
                              Carrier Rulings Branch