46 U.S.C. § 55102; 43 U.S.C. § 1333(a)(1); 19 C.F.R. § 4.80b(a)

HQ H242466 July 3, 2013 VES-3-02 OT:RR:BSTC:CCR H242466 LLB CATEGORY: Carriers Alexander W. Koff, Esquire Whiteford, Taylor and Preston LLP Seven Saint Paul Street Baltimore, Maryland 21202-1636 Dear Mr. Koff: Re: 46 U.S.C. § 55102; 43 U.S.C. § 1333(a)(1); 19 C.F.R. § 4.80b(a) Dear Mr. Koff: This letter is in response to your May 23, 2013, letter in which you request a ruling determining whether the proposed transportation of a topside by a dynamically-positioned, non-coastwise-qualified vessel to a single point anchor reservoir (SPAR) on the Outer Continental Shelf (OCS), subsequent to receiving the topside from a coastwise-qualified vessel that previously laded the topside at a coastwise point, would constitute a violation of 46 U.S.C. § 55102. We have reviewed your request. Our decision follows. FACTS The requester proposes to use the subject non-coastwise-qualified vessel to transfer a topside to a SPAR that is anchored to the OCS. The topside will be laden aboard a coastwise-qualified launch barge at a point in a U.S. port. The launch barge will be towed by coastwise-qualified tugboats to your client’s non-coastwise-qualified vessel which, using dynamic positioning will be stationary and adjacent to the SPAR. The topside will then be lifted from the launch barge by the non-coastwise-qualified vessel using its [ ] which will also temporarily suspend the topside. Thereafter, the non-coastwise-qualified vessel, under its own propulsion, will begin a 90-degree pivoting rotation on its central axis. In order for the non-coastwise-qualified vessel to avoid coming in contact with the SPAR, the SPAR will be retracted. The non-coastwise-qualified vessel will then unlade the topside onto the SPAR. ISSUE Whether the proposed movement of the topside by the subject dynamically-positioned, non-coastwise-qualified vessel to a coastwise point (the SPAR), subsequent to receiving the topside from a coastwise-qualified vessel that will have previously laden the topside at a coastwise point (a point in a U.S. port), would constitute a violation of 46 U.S.C. § 55102. LAW and ANALYSIS Pursuant to 46 U.S.C. § 55102, which provides, in pertinent part: Except as otherwise provided in this chapter or chapter 121 of this title, 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 foreign port, unless the vessel— (1) is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and (2) has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement. (emphasis added). The regulations promulgated under the authority of 46 U.S.C. § 55102(a), provide in pertinent part: A coastwise transportation of merchandise takes place, within the meaning of the coastwise laws, when merchandise laden at a point embraced within the coastwise laws (“coastwise point”) is unladen at another coastwise point, regardless of the origin or ultimate destination of the merchandise. 19 C.F.R. § 4.80b(a). The coastwise laws are extended by Section 4(a) of the Outer Continental Shelf Lands Act (OCSLA), as amended, to: ... the subsoil and seabed of the outer Continental Shelf and to all artificial islands, and all installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing, or producing resources therefrom, or any such installation or device (other than a ship or vessel) for the purpose of transporting such resources, to the same extent as if the outer Continental Shelf were an area of exclusive Federal jurisdiction located within a State. See 43 U.S.C. § 1333(a)(1). As an initial matter, we note that the requester does not dispute that the topside is merchandise or that the SPAR is a coastwise point pursuant to the OCSLA. Insofar as the vessel will not be anchored or otherwise attached to the seafloor and it will maintain its stationary position next to the SPAR using dynamic positioning, consistent with CBP rulings the subject non-coastwise-qualified vessel would not be considered a coastwise point. See HQ H008396 (June 4, 2007)(holding that a floating hotel that remains stationary on the Outer Continental Shelf using dynamic positioning is not a coastwise point pursuant to the OCSLA insofar as it is not attached to the seabed); HQ 115134 (Sept. 27, 2000)(stating that floating offshore facility vessel would not be subject to Customs and navigation laws pursuant to the OCSLA insofar as “onboard propulsion system,” rather than anchoring, was used to maintain the vessel’s position next to a drilling unit). Therefore, the remaining issue for our consideration is whether the movement and unlading of the topside by the subject non-coastwise-qualified vessel, once it receives the topside from the coastwise-qualified vessel, would be a violation of 46 U.S.C. § 55102. As stated above, pursuant to 46 U.S.C. § 55102, “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” unless it is coastwise-qualified. In the present case, the topside will be laden aboard a coastwise-qualified vessel at a point at a U.S. port and then transferred to a stationary, dynamically-positioned, non-coastwise-qualified vessel that will subsequently pivot on its axis, without any other movement, and unlade the topside onto the SPAR. Although the non-coastwise-qualified vessel moves on its axis to unlade the topside onto the SPAR, without any other movement, CBP has previously determined that movement by a vessel on its axis does not constitute point-to-point transportation within the meaning of the coastwise laws. See HQ 115985 (May 21, 2003) (holding that the stationary rotation of a non-coastwise-qualified vessel on its central axis was a permissible movement rather than a transportation between two coastwise points) and HQ 111684 (June 26, 1991) (holding that the 90 degree rotation of a non-coastwise-qualified barge upon its axis was not a point-to-point transportation). In conclusion, because the subject non-coastwise-qualified vessel will be pivoting on its central axis, without any other movement, before it unlades the topside onto the SPAR, it will not be providing part of the transportation of the topside between a U.S. point and the SPAR. Therefore, such movement would not be in violation of 46 U.S.C. § 55102. HOLDING The movement of the topside, as described herein, by the subject dynamically-positioned, non-coastwise-qualified vessel to a coastwise point (the SPAR), subsequent to receiving the topside from a coastwise-qualified vessel that previously laded the topside at a coastwise point (a point in a U.S. port) would not constitute a violation of 46 U.S.C. § 55102. Sincerely, George Frederick McCray Supervisory Attorney-Advisor/Chief Cargo Security, Carriers and Restricted Merchandise Branch Office of International Trade, Regulations & Rulings