Coastwise Transportation; 46 U.S.C. § 55102

HQ H044170 November 19, 2008 VES-3-02-OT:RR:BSTC:CCI H044170 JLB CATEGORY: Carriers Mr. John Perez Port Manager Wilhelmsen Ships Service 454 W Coleman Blvd., Suite 1C Mount Pleasant, South Carolina 29464 RE: Coastwise Transportation; 46 U.S.C. § 55102 Dear Mr. Perez: This letter is in response to your correspondence dated November 13, 2008, in which you request a ruling on whether a non-coastwise-qualified vessel may unlade excess cargo at a coastwise point other than the point of lading. Our ruling on your request follows. FACTS The M/V ONEGO FORESTER entered the port of New Orleans on August 16, 2008 to load 8,000 tons of petroleum coke in bulk. Due to mechanical problems and two hurricanes in the New Orleans area, the vessel remained at the port for over a month. Although the vessel was initially supposed to proceed to the United Kingdom to discharge the cargo, the mechanical problems aboard made it impossible for the vessel to cross the Atlantic Ocean. Therefore, the vessel owners decided to have the vessel repairs performed in Charleston, South Carolina. As a result of the repairs and the resulting postponement, it is now the winter load line in the North Atlantic. Given that the vessel was loaded during the summer load line, the vessel contains approximately 100,000 metric tons of excess cargo which needs to be unladen. You wish to unlade this excess cargo at Charleston and then transport this cargo back to the New Orleans supplier via ground transportation. ISSUE Whether the transportation of merchandise by a non-coastwise-qualified vessel as described above constitutes a violation of 46 U.S.C. § 55102? LAW AND ANALYSIS 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 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.” For purposes of the Jones Act, merchandise also includes “valueless material.” See 46 U.S.C. § 55102(a)(2). The U.S. Customs and Border Protection (“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). Accordingly, given that the excess cargo was originally laden on the non-coastwise-qualified vessel at New Orleans, Louisiana, it may not be unladen at Charleston, South Carolina, without violating 46 U.S.C. § 55102. The navigation laws (including the Jones Act) can only be waived under the authority provided by 46 U.S.C. § 501. This statute provides, in pertinent part, that: [w]hen the head of an agency responsible for the administration of the navigation or vessel-inspection laws considers it necessary in the interest of national defense, the individual may waive compliance with those laws to the extent, in the manner, and on the terms the individual prescribes. [Emphasis added] As it is readily apparent that the case in question is not related to national defense, a waiver is unavailable. Consequently, the coastwise transportation of merchandise under consideration is in violation of 46 U.S.C. § 55102. HOLDING The transportation of merchandise by a non-coastwise-qualified vessel as described above constitutes a violation of 46 U.S.C. § 55102. Sincerely, Glen E. Vereb, Chief Cargo Security, Carriers and Immigration Branch