Coastwise Trade; 46 U.S.C. § 55102; Fisheries; 46 U.S.C. § 108

HQ H037523 September 11, 2008 VES-3-02-OT:RR:BSTC:CCI H037523 JLB CATEGORY: Carriers Mr. William N. Myhre Kirkpatrick & Lockhart Preston Gates Ellis LLP 1601 K Street, NW Washington, DC 20006-1600 RE: Coastwise Trade; 46 U.S.C. § 55102; Fisheries; 46 U.S.C. § 108 Dear Mr. Myhre: This is in response to your correspondence of September 5, 2008, on behalf of Ocean Gold Seafoods, Inc. (“Ocean Gold”), in which you request confirmation that the transportation of fish from a point outside the U.S. territorial waters to a coastwise point is not coastwise trade. Our ruling on your request follows. FACTS The F/V JUNO and the F/V RONDY’S (“the vessels”) are documented under the laws of the United States, and each has a fishery and registry endorsement, but neither has a coastwise endorsement. Ocean Gold is considering using these vessels as fish tenders to transport fish from offshore harvesting vessels to shoreside processing facilities under the terms of a joint venture agreement with the Makah Tribe. Specifically, this means that the vessels would load fish from the Makah Tribe harvesting vessels at a point in the Exclusive Economic Zone (“EEZ”) but outside the U.S. territorial sea and transport the fish to Ocean Gold’s fish processing facilities in Westport, Washington. ISSUE Whether the proposed tendering operation described above constitutes an engagement in coastwise trade for purposes of 46 U.S.C. § 55102? LAW AND ANALYSIS Pursuant to Title 46, United States Code, section 108, (46 U.S.C. § 108), "fisheries" includes the "processing, storing, and transporting (except in foreign commerce), planting, cultivating, catching, taking, or harvesting fish, shellfish, marine animals, pearls, shells, or marine vegetation in the navigable waters of the United States or in the exclusive economic zone." The EEZ is defined in Presidential Proclamation 5030 of March 10, 1983 (48 FR 10605), as extending outward for 200 nautical miles from the baseline from which the territorial sea is measured. Only a vessel with a fishery endorsement may engage in the fisheries. See 46 U.S.C. § 12113(b). The Jones Act, former 46 U.S.C. App. § 883 recodified as 46 U.S.C. § 55102, pursuant to P.L. 109-304 (October 6, 2006), states that “a vessel may not provide any part of the transportation of merchandise by water, or by land and water, between points in the United States to which the coastwise laws apply, either directly or via a foreign port” unless the vessel was built in and documented under the laws of the United States and owned by persons who are citizens of the United States. See also U.S. Customs and Border Protection (“CBP”) Regulations, 19 C.F.R. §§ 4.80, 4.80b. Such a vessel, after it has obtained a coastwise endorsement from the U.S. Coast Guard, is said to be “coastwise-qualified.” 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 19 U.S.C. § 1401(c), the word "merchandise" is defined as "goods, wares, and chattels of every description, and includes merchandise the importation of which is prohibited, and monetary instruments as defined in section 5312 of Title 31.” 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 coastwise point is unladen at another coastwise point, regardless of origin or ultimate destination. See 19 C.F.R. § 4.80b(a). In the present case, the fish in question are not laden at a coastwise point but at a point outside the U.S. territorial sea. Accordingly, a transportation of merchandise between coastwise points has not occurred and the subject vessels may transport the fish from the harvesting vessels to the fish processing facilities without violating 46 U.S.C. § 55102. Furthermore, note that since the two vessels Ocean Gold proposes to use would not be engaging in coastwise trade, a coastwise endorsement would not be necessary. See Headquarters Ruling Letter 116268, dated July 14, 2004; Headquarters Ruling Letter 111630, dated July 31, 1991. Since a coastwise endorsement is not required for the subject vessels to provide transportation of the fish within the EEZ from a point beyond the U.S. territorial waters to a coastwise point, the fishery endorsement each vessel now possesses would suffice. See Headquarters Ruling Letter 112849, dated September 24, 1993. HOLDING The proposed tendering operation described above does not constitute an engagement in coastwise trade for purposes of 46 U.S.C. § 55102. Sincerely, Glen E. Vereb, Chief Cargo Security, Carriers and Immigration Branch