46 U.S.C. § 55102; 19 C.F.R. § 4.80b(a); Coastwise transportation of merchandise; lightering; HQ 110127 (Apr. 5, 1989)

HQ H015481 October 12, 2007 VES-3-24-OT:RR:BSTC:CCI H015481 LLB CATEGORY: Carriers Michael S. Budelman, Esquire Bauer Moynihan and Johnson, LLP 2101 Fourth Avenue, Suite 2400 Seattle, Washington 98121 Re: 46 U.S.C. § 55102; 19 C.F.R. § 4.80b(a); Coastwise transportation of merchandise; lightering; HQ 110127 (Apr. 5, 1989) Dear Mr. Budelman: This in response to your letter dated August 7, 2007, supplemented by your letter of October 5, 2007, in which you request a ruling, on behalf of your client on the applicability of 46 U.S.C. § 55102 to the lightering operation described therein using foreign-built lighter vessels. FACTS The foreign-built lighter vessels will be used to transport cargo from Kivilina, Alaska to a foreign-flagged bulk carrier anchored beyond the three-mile U.S. territorial sea. The lightering vessel would discharge all of the cargo laden in Kivilina onto the foreign-flagged bulk carrier, which would then transport the cargo to its final destination in various places in Canada and Asia. ISSUE Whether the lightering operation described in the FACTS section above is an engagement in the coastwise trade in violation of 46 U.S.C. § 55102. LAW AND ANALYSIS Pursuant to 46 U.S.C. § 55102, in pertinent part, the transportation of merchandise 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, 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. The CBP Regulations promulgated under the authority of 46 U.S.C. § 55102 provide that a coastwise transportation of merchandise takes place when merchandise laden at a point embraced within the coastwise laws ("coastwise point") is unladen at another coastwise point, regardless of origin or ultimate destination. See 19 C.F.R. § 4.80b(a). In HQ 110127 (Apr. 5, 1989), merchandise was laden on a foreign barge at a U.S. point and towed by a U.S.-flag tugboat to a point outside of the territorial waters where the merchandise was unladen onto a foreign vessel for transport to a foreign port. CBP held that the movement of the barge and the subsequent lightering by the foreign flag vessel would not be a movement in the coastwise trade. Similarly, in the present case, merchandise will be laden on a foreign vessel in Kivilina, Alaska, a U.S. coastwise point, and will be unladen at a point outside of U.S. territorial waters onto a foreign vessel destined for various foreign locations in Canada and Asia, where the merchandise will be unladen. Such movement would not be in violation of 46 U.S.C. § 55102. HOLDING The lightering operation described above would not be an engagement in coastwise trade in violation of 46 U.S.C. § 55102. Sincerely, Glen E. Vereb, Chief Cargo Security, Carriers and Immigration Branch 2