Coastwise transportation; Fuel oil transshipment; Registry vessel; 46 U.S.C. App. 883; 46 U.S.C. 12105

HQ 112298 July 23, 1992 VES-3-07-CO:R:IT:C 112298 GFM CATEGORY: Carriers Ms. Elizabeth Robertson Klemm, Blair, Sterling & Johnson, P.C. Suite 1008, Pacific News Bldg. 238 Archbishop F.C. Flores Street Agana, Guam 96910 RE: Coastwise transportation; Fuel oil transshipment; Registry vessel; 46 U.S.C. App. 883; 46 U.S.C. 12105 Dear Ms. Robertson: Reference is made to your letter of June 17, 1992, in which you request a ruling as to whether the scenario described below would constitute a violation of U.S. coastwise laws. FACTS: You state that, on behalf of a client, you wish to know whether a foreign-flag vessel transporting fuel oil from the U.S. to Asia which makes a ship-to-ship transfer of a portion of its cargo to a smaller U.S.-flag ship in international waters for ultimate delivery to the U.S. territory of Guam would constitute a violation of the coastwise laws. ISSUE: Whether the combined transportation of merchandise between the U.S. and Guam aboard a U.S.-flag vessel documented with a registry endorsement and a foreign-flag vessel would constitute a violation of the coastwise laws. LAW AND ANALYSIS: The coastwise law pertaining to the transportation of merchandise, section 27 of the Act of June 5, 1920, as amended (41 Stat. 999; 46 U.S.C. App. 883, often called the Jones Act), provides that: No merchandise shall be transported by water, or by land and water, on a 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, to be recovered from any consignor, seller, owner, importer, consignee, agent, or other person or persons transporting or causing said merchandise to 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 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... For purposes of the coastwise laws, a point in the United States territorial waters is considered 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, adjacent to the coast of the United States and seaward of the territorial sea baseline. The restrictions enumerated in section 883 has been liberalized somewhat, however, by the passage of 46 U.S.C. 12105. This provision states that vessels which have been issued a registry may engage in trade with Guam, American Samoa, Wake, Midway, or Kingman Reef. Notwithstanding section 12105, however, in considering the legality of a voyage such as the one contemplated here, it must be pointed out that, according to section 883, no portion of the transportation may be carried out by means of a foreign-flag vessel. Turning to the proposal at hand, it is clear that at least some of the proposed transportation will take place aboard a foreign-flag vessel. In such a case, the use of a coastwise qualified or registry vessel in conjunction with that foreign- flag vessel will not be enough to validate the transportation for the purposes of section 883. HOLDING: The combined transportation aboard a U.S. registry and a foreign-flag vessel to effect transportation between the U.S. and Guam constitutes a violation of the coastwise laws. Sincerely, B. James Fritz Chief