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HQ 115772





August 19, 2002

VES-10-01-RR:IT:EC 115772 GEV

CATEGORY: CARRIER

Dennis L. Bryant, Esq.
Haight Gardner Holland & Knight
2099 Pennsylvania Avenue, NW
Washington, D.C. 20006-6801

RE: Salvage; 46 U.S.C. App. § 316(d)

Dear Mr. Bryant:

This is in response to your letter dated August 13, 2002, requesting an expedited ruling as to whether the scenario set forth below is in accord with 46 U.S.C. App. § 316(d). Our ruling on this matter follows.

FACTS:

The M/S DELTA CONVEYOR, a U.S.-flag vessel built in Portland, Oregon in 1944 and assigned U.S. Coast Guard (USCG) Official Number 245225, sank at approximately mile 158.8 of the Lower Mississippi River on June 11, 2001. This vessel was documented with the USCG as a freight ship at the time of its sinking and is resting upright in about 52 feet of water.

On January 8, 2002, the New Orleans District of the U.S. Army Corps of Engineers sent a letter to Stevedoring Services of America (SSA) directing removal of the M/S DELTA CONVEYOR as an obstruction to navigation. The letter acknowledges that SSA has a “salvage plan in place for the ship’s removal” and urges SSA to “follow through with your plan making all necessary arrangements to have the ship restored to operation or removed from the area.”

On July 29, 2002, SSA Gulf Terminals, Inc., of Mobile, Alabama, issued an invitation for various marine salvage companies to submit bids for the salvage and removal of the M/S DELTA CONVEYOR.

The draft agreement allows the contractor to either treat the project as a wreck removal or as a salvage operation with the option of the salvor acquiring title to the vessel. The contract has been awarded to the owners of the KARLISSA B, a U.S.-flag jack-up crane barge with a registry endorsement on its certificate of documentation. The KARLISSA B is not eligible for a coastwise endorsement in view of its previous foreign-ownership.

The operation in question may commence as soon as the week of August 19, 2002, since the Mississippi River is at low water.

ISSUE:

Whether the use of a U.S.-flag, registry-endorsed vessel to recover a sunken vessel from U.S. territorial waters as described above constitutes a salvage operation in violation of 46 U.S.C. App. § 316(d).

LAW AND ANALYSIS:

Title 46, United States Code Appendix, § 316(d) (46 U.S.C. App. § 316(d)), provides, in pertinent part, as follows:

No foreign vessel shallengage in salvaging operations in territorial waters of the United StatesProvided, however, that if, on investigation, the Commissioner of Customs is satisfied that no suitable vessel wholly owned by a person who is a citizen of the United States and documented under the laws of the United Statesis available in any particular locality he may authorize the use of a foreign vessel or vessels in salvaging operations in that locality and no penalty shall be incurred for such authorized use. (Emphasis added)

The Customs Regulation promulgated pursuant to 46 U.S.C. App. § 316(d) is found at § 4.97, Customs Regulations (19 CFR § 4.97) and provides, in pertinent part, as follows.

Only a vessel of the United States, a numbered motorboat owned by a citizen, or a vessel operating within the purview of paragraph (d) or (e) [Canadian and Mexican vessels operating pursuant to treaties], shall engage in any salvage operation in territorial
waters unless an application addressed to the Commissioner of Customs to use another specified vessel in a completely described operation has been granted.

A vessel such as the KARLISSA B that is issued a certificate of documentation with a registry endorsement by the USCG pursuant to 46 U.S.C. § 12105 is a vessel that is both “documented under the laws of the United States” within the meaning of 46 U.S.C. App. § 316(d), and a “vessel of the United States” within the meaning of 19 CFR § 4.97 (see 46 U.S.C. § 2101(46) which defines the term “vessel of the United States”, in pertinent part, as “a vessel documented or numbered under the laws of the United States”). Customs has long-held that vessels not qualified for the coastwise trade by virtue of previous foreign ownership/registration and/or build which are subsequently issued a certificate of documentation by the USCG with a registry endorsement may engage in salvage operations in United States territorial waters without contravening 46 U.S.C. App. § 316(d). (Customs ruling letters 103091, dated November 15, 1977; 104308, dated December 3, 1979; 104692, dated August 29, 1980; 105514, dated February 26, 1982; and 110391, dated May 3, 1990)

You note that the prohibition regarding salvage set forth in 46 U.S.C. App. § 316(d), and that pertaining to the transportation of passengers between United States points set forth in 46 U.S.C. App. § 289, both pertain to the use of any “foreign vessel.” You further note that notwithstanding this same terminology, Customs interpretation of § 289 (limiting the engagement covered therein to only U.S.-built, owned and documented (“coastwise-qualified”) vessels) differs from that of § 316(d) (limiting the engagement therein to U.S.-flag vessels that need not be coastwise-qualified).

With respect to the disparate interpretations to which you refer, we note that “[I]t is an acknowledged general rule that statutes which have the same purpose or which relate to the same matter or subject are in pari materia and are to be construed together.” Bethlehem Steel Corp. v. United States, 551 F.Supp. 1148 (1982) Both 46 U.S.C. App. §§ 289 and 883 address coastwise transportation (the former pertaining to passengers, the latter pertaining to merchandise), not salvage. Consequently, it is Customs position that these two statutes are to be interpreted in par materia. Since the statutory language of 46 U.S.C. App. § 883 specifically provides that vessels transporting merchandise between United States points must be coastwise-qualified (see above), Customs has so interpreted 46 U.S.C. App. § 289. This interpretation is reflected in the Customs

Regulations promulgated pursuant to 46 U.S.C. App. § 289 (see 19 CFR § 4.80(a)(1)), as well as rulings issued from this office. (See, e.g., Customs ruling letters 112540, dated January 26, 1993, and 113259, dated October 28, 1994)

In regard to the activity in question, we note that in order for a marine operation to constitute “salvage,” according to the law developed in this area (see B.V. Bureau Wijsmuller v. United States, 702 F.2d 333, 337 (1983), in which the history of salvage law is briefly discussed), three elements are necessary. These elements are: “marine peril; service voluntarily rendered, not required by duty or contract; and success in whole or in part, with the service rendered having contributed to the success.” (Wijsmuller, 702 F.2d at 338, citing The Sabine, 101 U.S. 384, 25 L.Ed. 982 (1880)) To quote further from Wijsmuller, 702 F.2d at 338: “[p]eril necessary to give rise to a claim for salvage must be present and impending, although it need not be immediate or absolute. ‘A situation of actual apprehension, though not of actual danger, is sufficient.’ Absent danger, any services rendered a vessel cannot properly be called salvage” (See also Cope v. Vallette Dry-Dock Co., 119 U.S. 625 (1887); Simmons v. The Steamship Jefferson, 215 U.S. 130 (1909); de Kerchove’s International Maritime Dictionary, 2d Ed., 1961, p. 680, and Black’s Law Dictionary, 5th Ed., 1979 p. 1202, 1203)

With specific regard to the recovery of sunken vessels, we find the court’s decision in Treasure Salvors v. Unidentified Wrecked, etc., 569 F.2d 330 (1978) to be instructive. In that case the court determined that the critical element of marine peril existed in efforts to raise the ATOCHA, a Spanish galleon laden with gold bullion that sank off the Florida Keys in 1622. Notwithstanding the fact that this vessel lay buried beneath sand for over three centuries, the court nonetheless stated that “[e]ven after discovery of the vessel’s location it is still in peril of being lost through the actions of the elements.” Id. at p. 337 (See also Cobb Coin Co., Inc. v. Unidentified Wrecked, Etc., 549 F.Supp. 540, 557 (1982); Platoro Ltd., Inc. v. Unidentified Remains, Etc., 659 F.2d 893, 901 (1983)) Customs position that the recovery of sunken vessels constitutes salvage is in accord with the aforementioned judicial determinations. (See ruling letters 103091 and 104308, above, as well as Customs ruling letter 114738, dated June 23, 2000)

HOLDING:

The use of a U.S.-flag, registry-endorsed vessel to recover a sunken vessel from U.S. territorial waters as described above constitutes a salvage operation not in violation of 46 U.S.C. App. § 316(d).

Sincerely,

Acting Chief

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