46 U.S.C. § 55102; 19 C.F.R. § 4.80b; Coastwise Transportation.

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H268169 September 2, 2015 VES-3-06-OT:RR:BSTC:CCR H268169 KLQ CATEGORY: Carriers Ms. Anne E. Mickey Cozen O’Connor 1627 Eye Street NW, Suite 1100 Washington, D.C. 20006-1605 RE: 46 U.S.C. § 55102; 19 C.F.R. § 4.80b; Coastwise Transportation. Dear Ms. Mickey: This is in response to your August 27, 2015, ruling request on behalf of your clients, [ ] and [ ], in which you request a ruling determining whether the transportation of a non-self-propelled mobile offshore drilling unit (“MODU”), the [ ] by a non-coastwise-qualified vessel in United States (“U.S.”) territorial waters would constitute a violation of 46 U.S.C. § 55102. Our decision follows. FACTS The following facts are from your ruling request and letter to this office dated September 1, 2015. The MODU is a non-self-propelled MODU flagged in the Marshall Islands. The MODU will be towed by coastwise-qualified vessels from the Mexican outer continental shelf to [ ] facility (“facility”) in Pascagoula, Mississippi. On or about [ ] 3, 2015, while at the facility in Pascagoula, Mississippi, articles will be laden onboard the MODU. On or about [ ] 3, 2015, coastwise-qualified vessels will tow the MODU from the facility in Pascagoula, Mississippi to a deepwater hole, a second coastwise point, in Pascagoula, Mississippi. On or about [ ] 4, 2015, while at the deepwater hole, the MODU will be laden onboard the foreign-flagged [ ] (“vessel”). On or about [ ] 5, 2015, the vessel will transport the MODU back to the facility in Pascagoula, Mississippi. At this time, the MODU will be further secured to the vessel and if required, additional articles will be laden onboard the MODU. On or about [ ] 7, 2015, the subject vessel will transport the MODU from Pascagoula, Mississippi to its foreign destination, [ ]. You indicate that once the MODU is laden onboard the vessel, neither the MODU nor any other articles previously laden on the MODU will be unladen until the vessel reaches [ ]. ISSUE Whether the transportation of the MODU from the deepwater hole in Pascagoula, Mississippi to the facility in Pascagoula, Mississippi constitutes 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 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 46 U.S.C. § 55102(a), “merchandise, includes (1) merchandise owned by the United States Government, a State, or a subdivision of a State; and (2) valueless material.” As such, any cargo, regardless of its value or ownership, would be considered merchandise for the purpose of 46 U.S.C. § 55102. 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. It is a violation of the coastwise laws for a non-coastwise-qualified vessel to engage in coastwise trade. In the present case, the subject vessel is not coastwise-qualified insofar as it is foreign-flagged. Coastwise trade occurs when merchandise “laden at a point embraced within the coastwise laws (“coastwise point”) is unladen at another coastwise point.” In the present case, the MODU will be: (1) laden onboard the subject non-coastwise-qualified vessel at the deepwater hole in Pascagoula, Mississippi, a coastwise point; (2) transported by the vessel to the facility in Pascagoula, Mississippi, a second coastwise point; and (3) unladen from the vessel in Trinidad, a foreign point. It is not a violation of the coastwise laws for a non-coastwise-qualified vessel to lade merchandise at a coastwise point and transport that merchandise to a second U.S. coastwise point without unlading it. Insofar, as the subject vessel will only lade the MODU at the deepwater hole in Pascagoula, Mississippi, a coastwise point, and transport it to the facility in Pascagoula, Mississippi, a second coastwise point, without unlading it, the subject transportation does not constitute a violation of 46 U.S.C. § 55102. HOLDING The transportation of the MODU from the deepwater hole in Pascagoula, Mississippi to the facility in Pascagoula, Mississippi does not constitute a violation of 46 U.S.C. § 55102. Sincerely, Lisa L. Burley Chief/Supervisory Attorney-Advisor Cargo Security, Carriers and Restricted Merchandise Branch Office of International Trade, Regulations and Rulings U.S. Customs and Border Protection