Coastwise Trade; 46 U.S.C. § 55102; 19 C.F.R. §§ 4.7, 4.7a, 4.80

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H303361 May 6, 2019 VES-3-02-OT:RR:BSTC:CCR HQ H303361 SWM CATEGORY: Carriers Mr. George Keller The Ocean Cleanup Project c/o Customs Advisory Services, Inc. 100 Hartsfield Centre Parkway, Suite 350 Atlanta, Georgia 30354 Re: Coastwise Trade; 46 U.S.C. § 55102; 19 C.F.R. §§ 4.7, 4.7a, 4.80 Dear Mr. Keller: This is in response to your correspondence of November 9, 2018, and December 4, 2018, in which you request a ruling on whether the transportation of plastic waste aboard a non-coastwise-qualified vessel from international waters to a coastwise point constitutes a violation of the Jones Act, 46 U.S.C. § 55102. Our ruling is set forth below. FACTS The Ocean Cleanup Projects B.V. (“The Ocean Cleanup”) is a non-profit organization developing advanced technologies to clear the world’s oceans of plastic. The first area The Ocean Cleanup intends to clean up is the North Pacific Gyre, also known as the Great Pacific Garbage Patch (“GPGP”). The GPGP is located approximately 1,150 nautical miles from San Francisco Bay, in international waters. The Ocean Cleanup has developed a passive drifting system (the “System”), which uses the ocean’s forces to catch and concentrate plastic. The System consists of a 600-meter-long floater that sits on top of the water and a tapered 3-meter-deep impermeable skirt below, which does not attach to the seafloor. The floater provides buoyancy to the system and prevents plastic from flowing over it, while the skirt stops debris from escaping underneath. The plastic waste and the System are carried by the oceans current, however the wind and waves propel the System faster than the plastic, allowing the plastic to be captured. The System operates under Dutch jurisdiction and was towed from San Francisco to and installed on the GPGP by a foreign-flag vessel. The Ocean Cleanup intends to begin collecting waste in May 2019. The Ocean Cleanup will send the non-coastwise-qualified M/V Maersk Transporter, a Danish-flagged vessel (the “vessel”), to the GPGP to lade plastic waste. After the plastic waste is laden on the vessel, the vessel will sail to Rosarito, Mexico. The plastic waste will remain onboard while the vessel calls on Rosarito. From there, the vessel will sail from Rosarito, Mexico to San Francisco, California. While in San Francisco, the vessel will change crew and take in bunkers and stores. The vessel will then depart for the GPGP to pick up more plastic waste. This cycle – from San Francisco to the GPGP, to Mexico, and back to San Francisco – will repeat approximately two to four times until the vessel’s containers are full. At that point, the plastic waste will be offloaded at the Port of San Francisco. ISSUES Whether the the proposed transportation of plastic waste aboard a non-coastwise-qualified vessel, as described above, constitutes an engagement in coastwise trade for purposes of 46 U.S.C. § 55102. Whether the vessel will be required to declare the plastic waste aboard when it docks in San Francisco, for the stops as described in the FACTS section above, when the vessel will not unlade the plastic waste at that time. LAW AND ANALYSIS ISSUE 1 Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. 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 46 U.S.C. § 55102 (commonly known as the “Jones Act”), in pertinent part: Except as otherwise provided in this chapter or chapter 121 of this title [46 U.S.C. §§ 55101 et seq. or 12101 et seq.], 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-- (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 [46 U.S.C. §§ 12101 et seq.] or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement. The CBP Regulations promulgated under the authority of 46 U.S.C. § 55102 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). Accordingly, the determination as to whether a violation of 46 U.S.C. § 55102 has occurred depends on whether the subject transportation occurred between two coastwise points and whether the items transported are considered merchandise within the meaning of the statute. 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.” Accordingly, as we have held before, waste, such as the plastic waste at issue, is merchandise for purposes of 46 U.S.C. § 55102. See HQ 112436 (Sept. 16, 1992). The remaining question is whether the transportation of the merchandise violates the coastwise laws. As defined above, the coastwise laws, in pertinent part, apply to any point in the territorial waters of the United States. Thus, a point beyond the territorial waters, such as the GPGP, does not constitute a coastwise point. Moreover, the transportation of merchandise from a point outside of the U.S. territorial waters to a coastwise point does not constitute coastwise trade. See HQ H038355 (Sept. 24, 2008) and HQ 116586 (December 29, 2005) (recovery of articles from locations beyond U.S. territorial waters does not implicate coastwise laws such that they may be laden and transported aboard a non-coastwise-qualified vessel to a U.S. port without violating coastwise laws). Consequently, the transportation of the plastic waste by a non-coastwise-qualified vessel from the GPGP in international waters off the coast of California would not be in violation of 46 U.S.C. § 55102. ISSUE 2 You also ask whether the vessel will be required to declare the plastic waste onboard when it docks in San Francisco for crew and supply changes, even on stops in San Francisco when the waste will not be unladen. Pursuant to 19 C.F.R. § 4.7, any vessel arriving in the U.S. and required to make entry shall provide a manifest, consisting in part of a Cargo Declaration and CBP Form 1302. Under 19 C.F.R. § 4.7a(c), the Cargo Declaration must “list all inward foreign cargo on board the vessel regardless of the U.S. port of discharge.” Therefore, the vessel will need to declare the plastic waste onboard when it stops for crew and supply changes, even though the waste will not be unladen at that time. Accordingly, we find that the proposed transportation of the plastic waste from the GPGP to the Port of San Francisco does not constitute coastwise trade within the meaning of 46 U.S.C. § 55102 and 19 C.F.R. § 4.80. The vessel must declare laded plastic waste when it docks in San Francisco for crew and supply changes pursuant to 19 C.F.R. § 4.7a. HOLDING The proposed transportation of plastic waste, as described above, would not constitute an engagement in coastwise trade in violation of 46 U.S.C. § 55102. When the vessel stops in San Francisco, it will need to declare all plastic waste onboard, even if the waste will not be unladen at that time. Sincerely, Lisa L. Burley Supervisory Attorney-Advisor/Chief Cargo Security, Carriers and Restricted Merchandise Branch Office of Trade, Regulations and Rulings U.S. Customs and Border Protection