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HQ 116185

March 28, 2005

VES-3-17-RR:IT:EC 116185 rb


Mr. Myles J. Ambrose
Sandler, Travis & Rosenberg, P.A.
1300 Pennsylvania Ave., N.W.
Washington, D.C. 20004-3002

RE: Coastwise Trade; Third Proviso to 46 U.S.C. App. 883; Reconsideration of HQ 115446

Dear Mr. Ambrose:

In your letter of March 17, 2004, you request that Headquarters ruling (HQ) 115446, dated August 9, 2001, be reconsidered and revoked or modified, as you previously requested in your letter of July 25, 2003. As you are aware, HQ 115446 was reaffirmed in HQ 116021, dated January 21, 2004, which was issued in reply to your initial request of July 25, 2003. Your March 17 request, which does not mention HQ 116021, is the subject of the following additional ruling.


In HQ 115446, it was found that the transportation of frozen fish indirectly between coastwise points, in part via both foreign-flag vessel and rail trackage in Canada, as described therein, was in accord with the Third Proviso to 46 U.S.C. App. 883. It is basically contended that this ruling fails to narrowly construe the Third Proviso, as necessary to fulfill the overall purpose, or policy, of section 883, which is to ensure domestic control over coastwise marine transportation; and it is further contended that the ruling permits cargo shipments to circumvent the advance cargo reporting requirements of the 24-hour rule applicable to non-U.S. vessels; for these reasons, a reconsideration and reversal or modification of HQ 115446 is sought.

In particular, HQ 115446 permitted a carrier, under the authority of the Third Proviso, to employ a foreign-flagged vessel to transport frozen seafood products from Dutch Harbor, Alaska, to New Brunswick, Canada, as part of a “through
route” to Calais, Maine, via truck and rail trackage in Canada. However, no such “through route” had been recognized by the Surface Transportation Board (STB) and no rate tariff for such route covering the seafood products had been filed with the STB, as stated in the proviso. However, in an informal opinion, the STB essentially acknowledged that the Board no longer approves any route-specific rate tariff filings. Thus, if such STB-related requirements as contained in the text of the Third Proviso were to continue to be required, no carrier whatever would be entitled to use the Proviso.


Whether HQ 115446 accords with the Third Proviso to 46 U.S.C. App. 883.


The decision in HQ 116021 (dated January 21, 2004) already thoroughly reconsidered all issues presented in reaffirming the legal validity of HQ 115446, in full agreement with an extensive and undeviating line of administrative rulings of 20 years’ duration, as enumerated therein, concerning the correct construction of the Third Proviso to 46 U.S.C. App. 883 (the coastwise merchandise statute). As such, HQ 116021 should be considered as incorporated by reference in this decision.

Against this backdrop, it is observed (1) that the Third Proviso represents a limited exception to the general requirement in section 883 prohibiting a foreign vessel from transporting cargo, directly or indirectly, between coastwise points in the United States; and (2) that HQ 115446 in this context gives reasonable and logically consistent effect under the circumstances to this Third-Proviso exception to section 883.

Specifically, in this latter regard, it is well settled that the plain language of a law (the Third Proviso requirement that a “through route” be recognized as such by the Surface Transportation Board (STB) for which route a rate tariff must be filed with the said Board) need not be followed where necessary to avert absurd or impossible results (i.e., that no route could at present qualify for Third Proviso protection, given that the STB no longer recognizes through routes as such) (see, e.g., United States v. American Trucking Assns., Inc., 310 U.S. 534, 543-544 (1940) (citing Helvering v. New York Trust Co., 292 U.S. 455, at 456) (in construing a statute, the literal language of the statute need not be followed - “however clear the words may appear on ‘superficial examination’” - when doing so leads to “absurd,” or even “unreasonable,” results)). And, in particular, the construction of a statute that leads to impossibility of compliance is an absurd consequence that is to be avoided (see, United States v. Williams and Frances, 8 U.S. 48 (1807); Willings et al. in error v. United States, 4 U.S. 374 (1804)).

Furthermore, it is axiomatic that the general purpose, or policy, of a statute (section 883) may properly be achieved only within its established statutory framework, and cannot override a specific exception to the statute (the Third Proviso to section 883, as lawfully construed) merely because this is perceived as inimical or unsuited to achieving the general purpose of the statute in a particular case.

Moreover, irrespective of the Third Proviso, the 24-hour rule has no relevance in the present context. First of all, advance electronic cargo data reporting under the 24-hour rule, if it were applicable herein, would apply equally to either a U.S. or a foreign vessel when it transports containerized cargo from a foreign port to the United States (see 19 CFR 4.7(b)(2), as amended by CBP Dec. 03-32, 68 FR 68140, 68168). By contrast, in HQ 115446, the subject cargo was transported indirectly between two coastwise points in the United States on a through bill of lading in part via both foreign vessel and Canadian rail.


The ruling in HQ 115446 accords with the Third Proviso to 46 U.S.C. App. 883, as previously reconsidered and reaffirmed in HQ 116021.


Charles D. Ressin

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