Coastwise Trade; Puerto Rico; 46 U.S.C. App. §§ 883, 877; 48 U.S.C. § 744

HQ 114611 February 23, 1999 VES-3-06-RR:IT:EC 114611 GEV CATEGORY: Carriers Jacqueline Martin General Manager Business Process Maersk Inc. RE: Coastwise Trade; Puerto Rico; 46 U.S.C. App. §§ 883, 877; 48 U.S.C. § 744 Dear Ms. Martin: This is in response to your fax of February 12, 1999, requesting clarification of Customs position with respect to the applicability of the Jones Act to an itinerary by which Maersk Inc. (“Maersk”) proposes to move cargo. Our ruling in this matter is set forth below. FACTS: Maersk proposes to transport cargo from any U.S. inland port to Puerto Rico in the following manner. The cargo in question would be transported overland from any such U.S. inland port to Halifax, Nova Scotia, Canada. At Halifax the cargo would be loaded onto a foreign-flag Maersk vessel for transportation to San Juan, Puerto Rico. ISSUE: Whether the transportation of merchandise from the United States overland to Canada where it is loaded on a foreign-flag vessel for subsequent transportation to Puerto Rico is violative of 46 U.S.C. App. § 883. LAW AND ANALYSIS: The coastwise law pertaining to the transportation of merchandise, § 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, in pertinent part, that:  - 2 - 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, to be recovered from any consignor, seller, owner, importer, consignee, agent, or other person or persons so transporting or causing said merchandise to be trans- ported), between points in the United States...embraced within the coast- wise laws, either directly or via a foreign port, or for any part of the trans- portation, 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... (Emphasis added) The navigation laws administered by Customs (including 46 U.S.C. App. § 883), apply to points in 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. Furthermore, Customs has long-held the Jones Act applicable to Puerto Rico pursuant to 48 U.S.C. § 744 and 46 U.S.C. App. § 877. With respect to the Maersk itinerary in question, the merchandise would be transported between coastwise points (U.S. mainland and Puerto Rico), by land and water, via a foreign port (Halifax), in part by a foreign-flag vessel (Halifax to San Juan). Such an itinerary clearly falls within the purview of 46 U.S.C. App. § 883 and would run contra to the provisions of that statute. HOLDING: The transportation of merchandise from the United States overland to Canada where it is loaded on a foreign-flag vessel for subsequent transportation to Puerto Rico is violative of 46 U.S.C. App. § 883. Sincerely, Jerry Laderberg Chief Entry Procedures and Carriers Branch