Coastwise Transportation; Outer Continental Shelf; Wind Turbines; 46 U.S.C. §§ 55102 and 55103; 19 CFR §§ 4.80a and 4.80b; 43 U.S.C. § 1333.

H345321 March 21, 2025 OT:RR:BSTC:CCR H345321 HKC CATEGORY: Carriers Constantine G. Papavizas, Esq. Winston & Strawn LLP 1901 L Street, N.W. Washington, DC 20036 RE: Coastwise Transportation; Outer Continental Shelf; Wind Turbines; 46 U.S.C. §§ 55102 and 55103; 19 CFR §§ 4.80a and 4.80b; 43 U.S.C. § 1333. Dear Mr. Papavizas, This letter is in response to your February 21, 2025 ruling request on behalf of your client [ ] regarding whether the installation and removal of wind turbine blades at existing wind turbine generator locations by a non-coastwise-qualified vessel on the U.S. outer continental shelf (“OCS”), as described below, would violate the coastwise laws.1 Our decision follows. FACTS The following facts are from your correspondence.2 February 21, 2025 ruling request and subsequent Your client proposes to remove existing turbine blades, and install new turbine 1 You have asked this office for confidential treatment of bracketed information. CBP Regulations at 19 C.F.R. § 177.2(b)(7) provide that the requester of a ruling from our office may ask that privileged or confidential commercial or financial information supplied for purposes of preparing the requested ruling not be disclosed. Such requests will be considered if the information is clearly identified and the reasons for requesting that information not be disclosed are provided. If this office receives a Freedom of Information Act request for your submission, Regulations at 6 C.F.R. § 5.12, et seq. regarding the disclosure of business information provide that the submitter of business information will be advised of receipt of a request for such information whenever the business submitter has in good faith designated the information as commercially or financially sensitive information. We accept your request for confidential treatment as a good faith request. 2 Re: Request for Immediate Consideration of a Ruling Request Regarding Interpretation of the Jones Act and Related Laws, dated February 21, 2025; Email, RE: [ ] Follow On Questions, dated March 6, 2025. 1 blades, at a site consisting of approximately [ ] wind turbine generators (“WTG”) developed by [ ]. The project site is located in federal waters approximately [ ] off the coast of [ ], and was developed pursuant to a lease by the U.S. Bureau of Ocean Energy Management [ ]. Your client proposes to utilize the non-coastwise qualified vessel [ ], registered in [ ] and constructed in [ ] to perform the work. The vessel will begin in a European port with all wind turbine generator equipment necessary to conduct the blade replacements, except for a specialized gangway, loaded aboard the vessel. The vessel will then cross the Atlantic and perform vessel entry at a U.S. port located close to the [ ] offshore wind farm. While docked at the U.S. port, a specialized gangway will be installed on the vessel permitting it to access the WTGs. Project installation personnel will board the vessel at this U.S. port, or alternatively by helicopter once the vessel is offshore. Upon arriving at the first WTG, the vessel will jack down to the seabed adjacent to the WTG. Next, project installation personnel will utilize the specialized gangway to access the WTG along with personal protective equipment and work equipment. Once the three WTG blades have been removed they will be loaded onto the vessel along with nuts, bolts, electrical connectors, and other component parts (“Component Parts”) associated with the removed blades. The vessel will then repeat this sequence of operations at four more WTGs, until a total of 15 removed blades have been laden aboard the vessel along with their Component Parts. The vessel will then sail directly from the [ ] offshore wind farm to [ ], Canada, where the 15 decommissioned blades and their Component Parts will be unladed. The vessel will then load 15 new replacement blades prior to departing [ ]. With regards to the Component Parts for the new replacement blades, some will be loaded in the European mobilization port, while others will be loaded along with the new replacement blades in [ ]. The vessel will then return to the [ ] offshore wind farm to install three new blades at each of the five WTGs where it had previously removed blades. The vessel will jack down at each site, while project installation personnel are placed onto the tower along with their personal protective equipment, work equipment, and the blades/Component parts. Once the blades and component parts have been installed, the project installation personnel will return to the vessel with the personal protective equipment and work equipment. The vessel will then proceed to uninstall 15 more WTG blades, offload them at [ ], Canada, take on 15 more blades for installation, etc. repeating the process until all [ ] WTGs located at the [ ] offshore wind farm have had their blades replaced. In between WTG sites, the project installation personnel will perform functions on board the vessel to include equipment checks, training, and filling out pre- and post-action reports. Once the last set of WTG blades has been installed, the vessel will depart the [ ] WTG site. The vessel will deposit the project installation personnel at a U.S. port or [ ] and return to Europe. The specialized gangway will remain aboard the vessel permanently. ISSUES 2 1. Whether the transportation of WTG blades and replacement blades, Component Parts, and installation equipment, as described above, by a non-coastwise vessel violates the Jones Act, 46 U.S.C. § 55102? 2. Whether the transportation of the project installation personnel between coastwise points by the non-coastwise-qualified vessel violates the Passenger Vessel Services Act, 46 U.S.C. § 55103? LAW AND ANALYSIS Issue One: Whether the transportation of WTG blades and replacement blades, Component Parts, and installation equipment, as described above, by a non-coastwise vessel violates the Jones Act, 46 U.S.C. § 55102? The coastwise law applicable to the transportation of merchandise, known as the Jones Act, is found at 46 U.S.C. § 55102,3 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— (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. 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. 33 CFR § 2.22(a)(2). In addition, Section 4(a)(1) of the Outer Continental Shelf Lands Act of 1953 (“OCSLA”), as amended by The William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, H.R. 6395, 116th Cong. § 9503 (2021), provides that the Constitution and laws and civil and political jurisdiction of the United States are extended to: (i) the subsoil and seabed of the outer Continental Shelf; (ii) all artificial islands on the outer Continental Shelf; (iii) 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 3 Formerly 46 U.S.C. App. § 883. See Pub. L. 109-304 (Oct. 6, 2006). 3 (iv) any such installation or other device (other than a ship or vessel) for the purpose of transporting or transmitting such resources.4 (emphasis added). Accordingly, the OCSLA, as amended in 2021, extends U.S. jurisdiction to devices attached to the seabed of the OCS for the purpose of producing non-mineral energy such as wind energy. 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.” However, CBP has also held that “vessel equipment” is not included within the general meaning of merchandise. “Vessel equipment” has been defined as portable articles, “necessary and appropriate for the navigation, operation or maintenance of the vessel a5 nd for the comfort and safety of the persons on board.” CBP clarified its consideration of vessel equipment in 2019, indicating that vessel equipment includes “all articles or physical resources serving to equip the vessel, including the implements used in the vessel’s operation or activity.”6 CBP elaborated that items considered “necessary and appropriate for the operation of the vessel” are those items that are integral to the function of the vessel and are carried by the vessel. This may include those items that aid in the installation and construction of offshore infrastructure. Whether such articles constitute vessel equipment is a fact-specific, case-by-case determination.7 To determine if the proposed transportation occurs between coastwise points, we must examine the points at which the subject merchandise will be laden and unladen. Prior CBP rulings have consistently determined that WTG monopile foundations located on the OCS for the purposes of developing wind energy to be coastwise points under OCSLA.8 Similarly, the WTGs located on the [ ] offshore wind farm on the OCS are coastwise points under OCSLA. Any Canadian and European port, because they are not points in the United States, would not be points embraced within the coastwise laws of the United States. Here, the WTG blades and Component Parts being transported between the offshore project site and [ ], Canada would constitute merchandise. However, this transportation is not coastwise transportation. The removed WTG blades and Component Parts are transported between the [ ] WTG foundations (coastwise points) and [ ], Canada (a non-coastwise point). Conversely, the replacement WTG blades are transported from [ ], Canada to the WTG foundations, while the replacement Component Parts are transported from either a European port or [ ], Canada to the WTG foundations. Because none of these items are being transported between two coastwise points, no violation of the Jones Act would occur. 4 43 U.S.C. § 1333(a)(1). 5 Treasury Decision 49815(4) (Mar. 13, 1939). 6 Customs Bulletin & Decisions Vol. 53, No. 45, p. 88 (Dec. 18, 2019). 7 Id. at pp. 88-89. 8 See, e.g., H329275 (Apr. 18, 2023); H300962 (Apr. 14, 2022). 4 With regards to the WTG installation equipment, project installation personnel’s personal protective equipment, and specialized gangway, CBP’s longstanding position is that “vessel equipment” is not included within the general meaning of merchandise. “Vessel equipment” has been defined as portable articles, “necessary and appropriate for the navigation, operation or maintenance of the vessel and for the comfort and safety of the persons on board.”9 Items considered “necessary and appropriate for the operation of the vessel” are those items that are integral to the function of the vessel and are carried by the vessel. This may include those items that aid in the installation and construction of offshore infrastructure. Whether such articles constitute vessel equipment is a fact-specific, case-by-case determination. Here, the WTG installation equipment, project installation personnel’s personal protective equipment, and specialized gangway are vessel equipment. CBP has previously ruled that “tools … used by the installation personnel in physically installing and commissioning the subject WTG units… are integral to the function of the vessel, which is to install and commission the subject WTG units.”10 CBP has explicitly ruled WTG installation tools such as bolt handling tools and personal protective equipment to be vessel equipment.11 Similarly, the WTG installation equipment and personal protective equipment here should be considered vessel equipment. With regards to the specialized gangway, we note it remains affixed to the vessel throughout and after operations and is at no point unladed at a coastwise point. Additionally, the gangway would be considered vessel equipment because it is integral to the function of the vessel, which is removing and installing WTG blades. Accordingly, the transportation of WTG blades and replacement blades, Component Parts, and installation equipment, as described above, would not violate 46 U.S.C. § 55102. Issue Two: Whether the transportation of the project installation personnel between coastwise points by the non-coastwise-qualified vessel violates the Passenger Vessel Services Act, 46 U.S.C. § 55103? The Passenger Vessel Services Act (“PVSA”), 46 U.S.C. § 55103, provides, in relevant part: (a) In General. Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not transport passengers between ports or places 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 9 Treasury Decision 49815(4) (Mar. 13, 1939). 10 HQ H338702 (Aug. 13, 2024); H337433 (Feb, 28, 2024). 11 HQ H326258 (Sep. 15, 2023). 5 (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.12 A passenger is defined under 46 U.S.C. § 55103 and 19 CFR § 4.50(b) as “any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business.”13 Furthermore, the shipboard activities engaged in by such aforementioned individuals while traveling on a non-coastwise-qualified vessel between coastwise ports must be “directly and substantially” related to the operation, navigation, ownership, or business of the vessel itself in order for such individuals to not be considered as passengers under these provisions of law.14 In the present case, the project installation personnel will be transported from a U.S. port to a series of WTGs at the [ ] wind farm on the OCS, disembarking at each WTG to conduct blade removal and installation. In between WTG sites, the project installation personnel will perform functions on board the vessel to include equipment checks, training, and filling out pre- and post-action reports. Following operations the project installation personnel will disembark at a U.S. port or alternatively [ ], Canada. CBP has previously ruled that installation personnel carried aboard an offshore WTG installation vessel are not considered passengers, to the extent that they are directly and substantially connected with the operation and business of the vessel, which is the installation of WTGs.15 Similarly, the project installation crew here should not be classified as passengers because they are directly and substantially connected with the operation and business of the vessel, namely the removal and installation of WTG blades. Because the subject individuals are not “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b), their transportation as described above would not violate the Passenger Vessel Services Act. HOLDING 1. The transportation of WTG blades and replacement blades, Component Parts, and installation equipment, as described above, by a non-coastwise vessel would not violate the Jones Act, 46 U.S.C. § 55102. 2. The transportation of project installation personnel between coastwise points by the non-coastwise-qualified vessel would not violate the Passenger Vessel Services Act, 46 U.S.C. § 55103. Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and 12 See 85 Fed. Reg. 36469 at 36471 (June 17, 2020) (updating penalties for 2020). 13 19 CFR § 4.50(b). 14 See HQ 116721 (Sept. 25, 2006); HQ 116659 (May 19, 2006) (referencing the “direct and substantial” test). 15 HQ H327590 (Dec. 16, 2022); HQ H300962 (Apr. 14, 2022). 6 complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.” If the terms of the proposed activity vary from the facts stipulated to herein, this decision shall not be binding on CBP as provided for in 19 C.F.R. § 177(b)(1), (2) and (4), and § 177.9(b)(1) and (2). Sincerely, W. Richmond Beevers Chief Cargo Security, Carriers and Restricted Merchandise Branch Office of Trade, Regulations and Rulings U.S. Customs and Border Protection 7