Coastwise Transportation; Floating Wind Turbine Unit; 46 U.S.C. § 55102; 46 U.S.C. § 55111; 19 CFR § 4.80b.

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H318739 July 6, 2021 VES-3-02-OT:RR:BSTC:CCR H318739 AMW CATEGORY: Carriers Mr. Constantine G. Papavizas, Esq. Winston & Strawn LLP 1700 K Street, NW Washington, DC 20006 RE: Coastwise Transportation; Floating Wind Turbine Unit; 46 U.S.C. § 55102; 46 U.S.C. § 55111; 19 CFR § 4.80b. Dear Mr. Papavizas: This letter is in response to your May 12, 2021 ruling request on behalf of your client New England Aqua Ventus, LLC (“Aqua Ventus”) regarding whether the construction and transportation of a floating wind turbine generator unit between points in the United States would be in violation of the Jones Act, 46 U.S.C. § 55102, and the coastwise Towing Statute, 46 U.S.C. § 55111. Our decision follows. FACTS The following facts are from your ruling request and supporting information submitted on June 23, 2021, in response to a follow-up inquiry from this office. Aqua Ventus is a joint venture between Diamond Offshore Wind, RWE Renewables, and the University of Maine to construct a floating offshore wind demonstration project. The object of the present transaction is to construct and install a floating wind turbine in United States territorial waters (i.e., within three miles from shore) off the coast of Maine. When it is completed, the wind turbine unit will consist of a concrete hull supporting a wind turbine generator (“WTG”) comprised of a tower and turbine; the unit will be anchored in territorial waters near Monhegan Island, Maine. Aqua Ventus outlines two options to construct the concrete hull. Option One contemplates the construction of the entire hull at Mack Point in Searsport, Maine. Option Two contemplates the construction of segments of the hull at Searsport or Brewer, Maine, which will be transported to Eastport, Maine for final assembly and launching. In Option One, the hull will be fabricated on three to four barges lashed together at Mack Point in Searsport, Maine. Once the hull is completed, one or more of the barges will be used to tow the hull to a designated “oil transfer area” within Maine state waters. This process will occur in one of two ways: Option One, Alternative A – In this alternative, one or more of the lashed fabrication barges will be non-coastwise-qualified. When the hull is complete, it will be transferred from the fabrication barges to a coastwise-qualified launching barge using a skid system. The fabrication barges will remain stationary throughout the hull construction and transfer. A coastwise-qualified tug will then tow the launch barge to the oil transfer area where the launch barge will be anchored. The launch barge will then submerge so that the concrete hull can be floated and towed by a coastwise-qualified tug to Sears Island, Maine, where the hull will be ballasted down onto the seabed for assembly and installation of the WTG unit. Following this, the completed wind turbine unit will be towed by a coastwise-qualified tug to a location near Monhegan Island, Maine for anchorage and operation. Option One, Alternative B – In this alternative, all the lashed fabrication barges will be coastwise qualified. When the hull is complete, a coastwise-qualified barge will tow the fabrication barges to the oil transfer area where they will be moored next to a non-coastwise-qualified launching barge. The hull will be transferred to the launching barge using a skid system. There will be no movement of the vessels during the transfer of the hull. Following the transfer, the non-coastwise-qualified launch barge will submerge so that the concrete hull can be floated. The concrete hull will then be towed by a coastwise-qualified tug to Sears Island, Maine, where the hull will be ballasted down onto the seabed for assembly and installation of the WTG unit. Following this, the completed wind turbine unit will be towed by a coastwise-qualified tug to a location near Monhegan Island, Maine for anchorage and operation. In Option Two, the concrete hull will be fabricated in segments in the upland areas at either Mack Point or Brewer, Maine. In either location, after construction, the hull segments will be laded onto a coastwise-qualified barge or barges. Coastwise-qualified tugs will then tow the barges to Eastport, Maine. In Eastport, three non-coastwise-qualified submersible barges will be lashed together and moored to the Estes Head Pier to form a construction platform. The hull segments will be transferred from the transport barges to the lashed barges for assembly. During the assembly phase, the lashed barges may need to be moved off the pier so that other ships can temporarily access the pier. Such a movement will be accomplished by a coastwise-qualified tug or tugs. In each instance the lashed barges will be returned to their exact original mooring location at the Estes Head Pier without having unladen any items. Once the hull is complete, the lashed barges will submerge at the Estes Head Pier and the hull will be floated off the barges. Once again, the concrete hull will then be towed by a coastwise-qualified tug to Sears Island, Maine, where the hull will be ballasted down onto the seabed for assembly and installation of the WTG unit. Following this, the completed wind turbine unit will be towed by a coastwise-qualified tug to a location near Monhegan Island, Maine for anchorage and operation. ISSUE Whether the use of non-coastwise-qualified barges to assemble the hull of a floating wind turbine unit to be affixed in U.S. territorial waters violates the Jones Act, 46 U.S.C. § 55102, or the coastwise Towing Statute, 46 U.S.C. § 55111. LAW AND ANALYSIS Generally, the coastwise laws prohibit the transportation of merchandise or passengers 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.” First, we determine whether the proposed scenarios involve the transportation of merchandise between coastwise points by a non-coastwise-qualified vessel in violation of the Jones Act. The coastwise law applicable to the transportation of merchandise, the Jones Act, is found at 46 U.S.C. § 55102, and 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 a foreign port, unless the vessel— is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and 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. The Jones Act specifically prohibits the coastwise transportation of “merchandise” between coastwise points by non-coastwise qualified vessels. Pursuant to 46 U.S.C. § 55102(a): “[m]erchandise includes (1) merchandise owned by the United States Government, a State, or a subdivision of a State; and (2) valueless material.” As a preliminary matter, we find that the subject concrete hull of the wind turbine unit constitutes “merchandise” as it relates to the Jones Act. 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). CBP has consistently held that no coastwise transportation occurs in violation of 46 U.S.C. § 55102 when merchandise is laden at one coastwise point, transported to another coastwise point where it remains aboard the vessel, and is subsequently unladen at the point of lading. See, e.g., HQ H070662 (Aug. 28, 2009); HQ H054167 (Mar. 17, 2009); HQ H047936 (Dec. 30, 2008). However, CBP has narrowly construed what constitutes the same coastwise point. See HQ W115601 (Feb. 28, 2002) (finding that merchandise unladen even a vessel width from the dock where it is laden (with no contact with the dock at any point) is in violation of 46 U.S.C. § 55102); HQ H028458 (June 19, 2008) (merchandise transported from one coastwise point, namely, Dock #2 of a U.S. facility, on a non-coastwise-qualified vessel to Dock #1 of the same U.S. facility, another coastwise point, via a foreign port was a violation of 46 U.S.C. § 55102). In most scenarios outlined above, you state that the subject non-coastwise-qualified barges will remain completely stationary at all times the concrete hull is laden on board. In “Option Two,” you state that the barges may move off their pier to allow other vessels to access the pier but will return to the same exact point. As such, the proposed scenarios do not violate the Jones Act, 46 U.S.C. § 55102, because the subject merchandise will not be transported between coastwise points on board the non-coastwise-qualified barges but will instead be laded and unladed at the exact same coastwise point. Next we determine whether the proposed scenarios involve a violation of the Towing Statute. The coastwise law applicable to the towing of vessels, the Towing Statute, is found at 46 U.S.C. § 55111, and provides in pertinent part: (a) IN GENERAL.—Except when towing a vessel in distress, a vessel may not do any part of any towing described in subsection (b) unless the towing 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 of this title or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement. (b) APPLICABLE TOWING.—Subsection (a) applies to the towing of— (1) a vessel between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port or place; (2) a vessel from point to point within the harbors of ports or places to which the coastwise laws apply; or …. In both “Options” outlined in the request, all towing will be conducted by coastwise-qualified tugs. Insofar as all towing operations between coastwise points will be conducted by a coastwise-qualified tug, there is no violation of 46 U.S.C. § 55111. HOLDING The proposed transportation in Options One and Two do not constitute a violation of the Jones Act, 46 U.S.C. § 55102, because the non-coastwise-qualified barges will not be involved in the transportation of merchandise between coastwise points. In addition, the above scenarios do not violate the Towing Statute, 46 U.S.C. § 55111, because all towing will be conducted by coastwise-qualified tugs. Sincerely, Lisa L. Burley Chief/Supervisory Attorney-Advisor Cargo Security, Carriers and Restricted Merchandise Branch Office of Trade, Regulations and Rulings U.S. Customs and Border Protection