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

HQ H045777 December 4, 2008 VES-3-02-OT:RR:BSTC:CCI H045777 JLB CATEGORY: Carriers Mr. John Livingston S5/Norton Lilly International 952 Houston Northcutt Blvd., Suite 100 Mt. Pleasant, South Carolina 29464 RE: Coastwise Transportation; 46 U.S.C. § 55102 Dear Mr. Livingston: This letter is in response to your correspondence dated November 28, 2008, in which you request a ruling on whether a non-coastwise-qualified vessel may temporarily unlade cargo at a coastwise point other than the point of unlading due to mechanical problems aboard the vessel. Our ruling on your request follows. FACTS The MSC PERU (“the vessel”) needs to have repair work performed on its rudder in order to continue its voyage. Although the vessel is supposed to proceed to Jacksonville, Florida to discharge the cargo, the mechanical problems aboard make it necessary to unlade and stow these containers at the Wando Terminal in Charleston, South Carolina for no more than 48 hours while the repair work is performed. You wish to unlade this cargo in Charleston and then to re-lade the containers back on the vessel at the Wando Terminal after the repairs are completed. The containers will not be moved at all while they are stowed at the Wando Terminal and once the containers are re-laden, the vessel will continue on to Jacksonville where the containers will be discharged. 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 cargo will be re-laden on the non-coastwise-qualified vessel at Charleston, South Carolina, it may not be unladen at Jacksonville, Florida, 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