Coastwise Transportation; Scour Protection; Outer Continental Shelf; 46 U.S.C. § 55102

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H327710 April 1, 2023 VES-3-02-OT:RR:BSTC:CCR H327710 TNA CATEGORY: Carriers Constantine G. Papavizas, Esq. Winston & Strawn, LLP 1901 L Street, NW Washington, D.C. 20036 RE: Coastwise Transportation; Scour Protection; Outer Continental Shelf; 46 U.S.C. § 55102 Dear Mr. Papavizas: This letter is in response to your October 4, 2022, ruling request on behalf of your client, [ ], regarding whether the transportation of scour protection rocks to the U.S. Outer Continental Shelf (“OCS”), as described below, would violate the coastwise laws. Our decision follows. FACTS The following facts are from your October 4, 2022, ruling request. Your client, [ ] (“the company”), has proposed to install “scour protection” materials to protect wind turbine generator (“WTG”) foundations in conjunction with the construction of the [ ] project (“the project”), which is located on the OCS off the coast of [ ]. This work is pursuant to a lease issued by the U.S. Bureau of Ocean Energy Management and is currently intended to occur in [ ]. The company will utilize one or more of the following foreign-flagged vessels: [ ] (the “Vessel”) for the scour protection operation. The Vessel will arrive in U.S. waters with rock laden in Europe and of European origin. The Vessel will place the rock on the U.S. OCS at pre-determined points which are entirely pristine prior to the rock placement. Subsequent loads of rock will be of Canadian origin and will be laden aboard the Vessel in a Canadian port. The Vessel will continue the same operations until the scope of work is complete, and then it will demobilize. The Vessel will not undertake any crew transfers or port calls in the U.S. ISSUE Whether the transportation of the subject scour protection material as described above violates the Jones Act, 46 U.S.C. § 55102? LAW AND ANALYSIS Generally, the coastwise laws prohibit the transportation of 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 certificate of documentation with a coastwise endorsement from the U.S. Coast Guard, is said to be “coastwise qualified.” The coastwise law applicable to the transportation of merchandise, known as 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 coastwise laws apply, in part, 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. In addition, Section 4(a)(1) of the Outer Continental Shelf Lands Act of 1953 (“OCSLA) provides that the Constitution and laws and civil and political jurisdiction of the United States extend to: the subsoil and seabed of the outer Continental Shelf; all artificial islands on the outer Continental Shelf; 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, including non-mineral energy resources; or any such installation or other device (other than a ship or vessel) for the purpose of transporting or transmitting such resources. (Emphasis added.) 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.” Prior CBP rulings have interpreted this definition of “merchandise” to include rocks and dredged material. See, e.g., HQ H317289 (March 25, 2021); HQ 113219 (Oct. 17, 1994). As such, it is clear that the scour protection materials contemplated in the instant ruling request are merchandise under 46 U.S.C. § 55102. To determine if the proposed transportation occurs between coastwise points, we first examine the points at which the subject scour protection material will be laden and unladen. In the present case, the scour protection material will be laden aboard the Vessel either at a European port or at a Canadian port. Neither of these points is a coastwise point under 46 U.S.C. § 55102. A number of prior CBP rulings have examined the application of the OCSLA and the Jones Act to the OCS. These rulings have looked to determine what types of activity form a coastwise point on the OCS, especially when examining the installation of scour protection as contemplated in the present case. See, e.g., HQ H317289 (March 25, 2021); HQ H318758 (June 6, 2022); HQ H300962 (April 14, 2022). Here, however, we do not reach this issue. Because the scour protection material will be laden aboard the Vessel at non-coastwise points, these materials will not be transported between two coastwise points even if the work performed off the coast of [ ] formed a coastwise point in the process. As a result, we find that the transportation of the scour protection materials by a non-coastwise qualified vessel, as described in the Facts section of this ruling, would not be in violation of 46 U.S.C. § 55102. HOLDING The transportation of the scour protection material between a port in Europe or Canada and the pristine seabed on the OCS, as described in the FACTS section, would not be in violation of 46 U.S.C. § 55102. Sincerely, W. Richmond Beevers Chief, Cargo Security, Carriers and Restricted Merchandise Branch Office of Trade, Regulations and Rulings U.S. Customs and Border Protection