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HQ 115321





April 16, 2001

VES-3-24-RR:IT:EC 115321 GEV

CATEGORY: CARRIER

Cris John Wenthur
Wenthur & Chachas
4180 La Jolla Village Drive, Suite 500
La Jolla, California 92037

RE: Fisheries; Coastwise Trade; Nicholson Act; Report of Arrival; Entry; Clearance; 46 U.S.C. § 12101(a); 46 U.S.C. App. §§ 289, 883; 19 U.S.C. §§ 1433,1434; 46 U.S.C. App. § 91

Dear Mr. Wenthur:

This is in response to your fax of March 23, 2001, requesting a ruling, on behalf of your client, regarding the use of a vessel in conjunction with a fish farming operation in Mexico. Our ruling in this matter is set forth below.

FACTS:

Your client proposes to purchase a U.S.-built, Delaware-registered vessel (hereinafter referred to as the “client’s vessel”) to be used in the above-referenced fish farming operation as follows.

BAF Aquaculture Fish Farm in Mexico will purchase fish caught by independent Mexican and U.S.-flagged fishing vessels on the high seas. The fish will be put into fish storage cages and towed by the client’s vessel to the fish farm (just south of the U.S. border) where the fish will be fed and further grown. The client’s vessel has no Mexican or U.S. fishing permits and does not catch the fish, it merely tows the fish cages to the fish farm.

At such time as the fish are considered to be sufficiently grown, the client’s vessel lades the fish from the cages at the fish farm in Mexican waters and immediately partially processes the fish by gutting/de-
gilling. The semi-processed fish are then transported on board the client’s vessel to San Diego, California, where they are imported per U.S. Customs Service procedures and, subsequent to importation, are further processed.

ISSUES:

Whether the use of the client’s vessel as proposed violates 46 U.S.C. App. § 883.

2. Whether the use of the client’s vessel as proposed violates 46 U.S.C. App. § 251(a).

Whether the use of the client’s vessel as proposed constitutes an engagement in the fisheries for which its certificate of documentation must be endorsed pursuant to 46 U.S.C.

Whether the use of the client’s vessel as proposed necessitates that it be in compliance with the requirements to report arrival, enter and clear pursuant to 19 U.S.C. §§ 1433, 1434 and 46 U.S.C. App. § 91, respectively.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, § 883 (46 U.S.C. App. § 883, the merchandise coastwise law often called the “Jones Act”), provides, in part, that no merchandise shall be transported between points in the United States embraced within the coastwise laws, either directly or via a foreign port, or for any part of the transportation, in any vessel other than one that is coastwise-qualified (i.e., U.S.-built, owned and documented). Pursuant to § 4.80b(a), Customs Regulations (19 CFR § 4.80b(a)), promulgated pursuant to 46 U.S.C. App. § 883, a coastwise transportation of merchandise takes place when merchandise laden at one coastwise point is unladen at another coastwise point.

The coastwise laws generally apply to points in the U.S. territorial sea, 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 cases where the baseline and the coastline differ.

With respect to the first issue for consideration, in view of the fact that the fish will be laded on the client’s vessel in Mexican waters, the transportation in questions falls outside the scope of the Jones Act. Consequently, the provisions of 46 U.S.C. App. § 883 are inapplicable in this case.

In regard to the second issue, we note that the landing of fish or fish products in the United States governed by the Nicholson Act (the Act of September 2, 1950, as amended, Ch. 842, 64 Stat. 577; 46 U.S.C. App. § 251(a)), establishes that no foreign-flag vessel shall land in a port of the United States its catch of fish taken on board the vessel on the high seas, or fish products processed therefrom, or any fish or fish products taken on board the vessel on the high seas from a vessel engaged in fishing operations or in the processing of fish or fish products. Since the client’s vessel is not foreign-flagged, its proposed use would also fall outside the scope of the Nicholson Act. The provisions of 46 U.S.C. App. § 251(a) are therefore inapplicable as well.

Furthermore, we note that Customs has held that the proscription against using a foreign-flag vessel set forth in 46 U.S.C. App. § 251(a) does not prohibit its landing in the United States of fish or fish products taken on board the vessel while the vessel is within the territorial jurisdiction of a foreign country, including its territorial sea, inland waters, and ports (see Treasury Decision (T.D.) 78-431, citing T.D. 54861(21)). Assuming, arguendo, the client’s vessel was foreign-flagged, since the fish in question would be laded in Mexican territorial waters, the proposed use of the client’s vessel is beyond the purview of the Nicholson Act

With respect to third issue under consideration, we note that the Commercial Fishing Industry Vessel Anti-Reflagging Act of 1987 (the "Act", Pub. L. 100-239; 101 Stat. 1778) amended 46 U.S.C. § 12101(6) by changing the definition of "fisheries" set forth therein to include the "processing, storing, and transporting (except in foreign commerce)" of fish and related fishery resources in United States navigable waters and the United States EEZ, as well as the catching-related activities provided for in the former definition. Accordingly, the definition of fisheries, now set forth in 46 U.S.C. § 12101(a), reads as follows:

"fisheries" includes processing, storing, transporting (except in foreign commerce), planting, cultivating,
catching, taking, or harvesting fish, shellfish, marine animals, pearls, shells, or marine vegetation in the navigable waters of the United States or in the exclusive economic zone. (Emphasis added)

The U.S. EEZ is defined in Presidential Proclamation 5030 of March 10, 1983 (48 FR 10605), as extending outward for 200 nautical miles from the baseline from which the territorial sea is measured. The term “United States” is defined in 46 U.S.C. § 2101(44) as, “...the States of the United States, Guam, Puerto Rico, the Virgin Islands, American Samoa, the District of Columbia, the Northern Mariana Islands, and any other territory or possession of the United States.”

Title 46, United States Code, § 12108(b) limits the employment in the fisheries to a vessel issued a certificate of documentation with a fishery endorsement, "subject to the laws of the United States regulating the fisheries" (see e.g., the Magnuson Fishery Conservation and Management Act of 1976 (MFCMA), 16 U.S.C. 1801 et seq., administered by the Department of Commerce, NOAA, National Marine Fisheries Service (NMFS) under which a foreign vessel may obtain a permit from NMFS to engage in fishing in the EEZ). Under 46 U.S.C. § 12108(a), only a vessel eligible for documentation (i.e., over 5 net tons and owned by a citizen) which was built in the United States may be endorsed for the fisheries. Pursuant to 46 U.S.C. § 12108(b), subject to the laws of the United States regulating the fisheries, only a vessel so endorsed may engage in the fisheries.

Upon reviewing this matter it is readily apparent that the client’s vessel would be transporting fish in the U.S. EEZ. Pursuant to 46 U.S.C. § 12101(a), such transportation constitutes an engagement in the fisheries unless it is “in foreign commerce.” In regard to the term “foreign commerce”, it is legally defined as, “Trade between persons in the United States and those of a foreign country.” Black’s Law Dictionary, Fifth Edition, pp. 582, 583 (1979) (See also 46 U.S.C. App. § 1244(a), and Henderson v. Wickham, 92 U.S. 259, 270, 23, L.Ed. 543 (1876), citing U.S. v. Holliday, 3 Wall. 417, 18 L.Ed. 185). In view of the fact that the subject fish are being imported into the United States from Mexico, we have determined that such trade constitutes “foreign commerce” within the meaning of the aforementioned legal authority. Consequently, the requirement that the client’s vessel be endorsed for the fisheries pursuant to 46 U.S.C. § 12108 is obviated.

In regard to the last issue for our consideration, the navigation laws administered by the U.S. Customs Service require that any vessel arriving “from a foreign port or place” must immediately report its arrival and make formal entry. (19 U.S.C. §§ 1433(a)(1)(A) and 1434(a)(1), respectively) In addition, any vessel proceeding from a port or place in the United States “for a foreign port or place” must obtain clearance from Customs before proceeding. (46 U.S.C. App. § 91(a)(1) and (b)(1)) It is Customs position, based on judicial interpretation, that the term “foreign port or place” means “a port or place exclusively within the sovereignty of a foreign nation.” (see The Winnie, 65 F.2d 706, 707) Consequently, the fish farm located in Mexican territorial waters is a “foreign place” for purposes of the aforementioned statutes. Since the client’s vessel will visit that location it must comply with the requirements of the above-cited statutory authority unless otherwise exempted. We note that pursuant to 19 U.S.C. § 1441, certain vessels are not required to make entry or obtain clearance as discussed above. However, such exemptions are inapplicable in this case.

HOLDINGS:

The use of the client’s vessel as proposed does not violate 46 U.S.C. App. § 883.

2. The use of the client’s vessel as proposed does not violate 46 U.S.C. App. § 251(a).

3. The use of the client’s vessel as proposed does not constitute an engagement in the fisheries for which its certificate of documentation must be endorsed pursuant to 46 U.S.C.

4. The use of the client’s vessel as proposed necessitates that it be in compliance with the requirements to report arrival, enter and clear pursuant to 19 U.S.C. §§ 1433, 1434 and 46 U.S.C. App. § 91, respectively.

Sincerely,

Larry L. Burton
Chief

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