Coastwise Trade; Stevedoring Equipment; 46 U.S.C. §§ 55102, 55107; 19 CFR § 4.93

HQ H011462 August 29, 2007 VES-3-20-OT:RR:BSTC:CCI H011462 GG CATEGORY: Carriers Mr. Jeff Patrick Marine Department Geo. S. Bush & Co., Inc. P.O. Box 8829 Portland, Oregon 97208 RE: Coastwise Trade; Stevedoring Equipment; 46 U.S.C. §§ 55102, 55107; 19 CFR § 4.93 Dear Mr. Patrick: This is in response to your correspondence of May 18, 2007, in which you request a ruling on the application of the coastwise laws to the transportation of certain equipment used for removing residual cargo from a vessel’s cargo holds. Specifically, you request that the equipment be designated as stevedoring equipment under 19 CFR § 4.93. Our ruling is set forth below. FACTS The M/V JIN QUAN, a Hong Kong-flag vessel owned and operated by San Juan Navigation, plans to unlade cement in Sacramento, California. The residue cargo remaining on board the vessel must be removed before the holds can pass inspection prior to loading the next cargo of potash in Portland, Oregon. Certain equipment specific to this type of removal will be utilized to manipulate the remaining cargo on board so that the holds are suitable for the next load. Specifically, the subject equipment is used to blow high-pressure air through an aluminum pipe handle, ending in a mop head consisting of hollow plastic tubes. The high pressure air agitates the head of the mop and knocks the residual cargo off the holds and hatch covers to the hold floor. The cement residue is then collected by industrial vacuum and bagged for discharge. It is anticipated that several tons of cement will be collected for discharge. The equipment is owned by San Juan Navigation and will be transported without any charges. Geo. S. Bush & Co., Inc., as agent for San Juan Navigation, requests that the subject equipment be designated as stevedoring equipment pursuant to 19 CFR § 4.93(a)(2), in order that it be allowed to place the equipment on board the M/V JIN QUAN in Sacramento, California, and transported to Portland, Oregon, where it will come off the vessel. SSUE Whether the equipment as described above may be designated as stevedoring equipment under 19 CFR § 4.93(a)(2), such that its coastwise transportation from Sacramento, California to Portland, Oregon on a Hong Kong-flag vessel does not violate 46 U.S.C. § 55102. 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. Such a vessel, after it has obtained a coastwise endorsement from the U.S. Coast Guard, is said to be “coastwise qualified.” Title 46 United States Code, § 55102 (46 U.S.C. § 55102, the merchandise coastwise law commonly referred to as 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 and documented under the laws of the United States and owned by persons who are citizens of the United States (i.e., a coastwise-qualified vessel). A coastwise-qualified vessel is one that is U.S.-built, owned and documented. Pursuant to Title 19, United States Code, section 1401(c) (19 U.S.C. § 1401(c)) the word “merchandise” means goods, wares and chattels of every description and includes merchandise the importation of which is prohibited. 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. Pursuant to 46 U.S.C. § 55107, the prohibition contained within 46 U.S.C. § 55102 does not apply to the coastwise transportation of, among other things, stevedoring equipment in vessels of foreign nations that are found to extend reciprocal privileges to the vessels of the United States. Section 4.93(b)(2), CBP Regulations (19 C.F.R. § 4.93(b)(2)) lists the nations that are entitled to privileges provided by 46 U.S.C. § 55107. Hong Kong is on that list. Therefore, the M/V JIN QUAN, a Hong Kong-flag vessel may transport stevedoring equipment coastwise. We note that 46 U.S.C. § 55107 further provides that such stevedoring equipment must be owned or leased by the owner or operator of the transporting vessel, or be owned or leased by the stevedoring company contracting for the lading or unlading of that vessel, and must be transported without charge for the use in handling of cargo in foreign trade. In the instant case, San Juan Navigation owns both the vessel and the equipment, and the equipment is transported without any charges for the use in handling of cargo in foreign trade. CBP 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 shore to its place of stowage aboard a vessel. See Headquarters Ruling (“HQ”) 115587 (February 26, 2002), citing Treasury Decision (“T.D.”) 91-87. For example, cranes used in the loading and unloading of cargo in foreign trade have been held to be stevedoring equipment. See HQ 109629 (July 21, 1988). Moreover, “stevedoring” is defined as “[t]he operations of loading and discharging ships.” International Maritime Dictionary 788 (2nd ed. 1961). In order to qualify for the exemption for stevedoring equipment under 46 U.S.C. § 55107, the equipment must be used for the lading or unlading of the transporting vessel. In the instant case, the equipment is used for removing the residual cargo from the cargo holds incidental to its discharge and prior to lading of a new type of cargo. The excess cargo consists of several tons of cement, collected for discharge from the vessel. As such, the equipment meets the requisite criteria to be designated as stevedoring equipment in that it is being used for activities interrelated to the unlading of tons of the cement cargo. Accordingly, the Hong Kong-flag vessel to which you refer may be used to transport the subject equipment from Sacramento to Portland. HOLDING The subject equipment described above is stevedoring equipment within the meaning of 19 CFR § 4.93(a)(2). Therefore, the coastwise transportation of such equipment would not be in violation of 46 U.S.C. § 55102. Sincerely, Glen E. Vereb Chief Cargo Security, Carriers and Immigration Branch