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HQ 116602

January 30, 2006

VES-3-14/VES10-01-RR:BSTC:CCI 116602 rb


Trevor Hughes
Commercial & Marketing Manager
Century Subsea Inc.
1640 W. Sam Houston Pkwy, N.
Houston, TX 77043

RE: Oceanographic Research; Coastwise Trade; Salvage; 46 U.S.C. App. 316(d), 883; Use of Foreign-Flagged Vessel

Dear Mr. Hughes:

In your letter of January 23, 2006, on behalf of Century Subsea Inc., you request an expedited ruling concerning whether the coastwise salvage and merchandise laws, 46 U.S.C. App. 316(d) and 883, respectively, would apply to a foreign-flagged vessel to be used in conducting a geophysical investigation beyond United States territorial waters on the Outer Continental Shelf. Our ruling follows.


A foreign-flagged vessel is intended to be used to conduct a geophysical investigation beyond United States territorial waters on the Outer Continental Shelf off the coast of New England. This geophysical investigation, or survey, is preparatory to the construction of a deepwater port at that location. Once operational, the deepwater port would facilitate the importation of liquefied natural gas, which would be delivered therefrom to onshore markets in the United States via pipeline facilities.

Specifically, in surveying the area involved in furtherance of the construction of the deepwater port, the vessel would obtain core samples (to be taken ashore for analysis) and perform on-site tests of the mechanical properties of the seabed soils, in order to determine the types of foundations that would be necessary in constructing a range of subsea structures associated with the port, including vessel moorings, riser bases, manifolds, flowlines, and pipelines. For such activities, the vessel would transport geotechnical equipment laden at a United States or foreign port to be used in effecting the survey; and, following these operations, the equipment, if not retained aboard the vessel, would be unladed either at the same U.S. port where initially laden or at another foreign port.


Whether the proposed geophysical investigation or survey to be performed in this case would involve either the coastwise transportation of merchandise or a salvaging operation under 46 U.S.C. App. 883 or 316(d), respectively, which would require the use of a coastwise-qualified vessel.


Generally speaking, coastwise trade consists of the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws (E.g., Headquarters ruling (HQ) 106983, of September 26, 1984). In particular, under 46 U.S.C. App. 883, merchandise may not be transported between ports or places embraced within the coastwise laws in any other vessel than one which is coastwise-qualified (i.e., built in and documented under the laws of the United States and owned by persons who are citizens of the United States). And under 46 U.S.C. App. 316(d), in pertinent part, a foreign vessel is prohibited from engaging in salvaging operations on the Atlantic coast of the United States.

In applying the coastwise laws, Customs (now Customs and Border Protection (CBP)) has ruled that a point in United States territorial waters is considered a point embraced within the coastwise laws; and that the coastwise laws typically apply to points in the territorial sea, defined as the belt, three (3) 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 coastline differ (T.D. 78-440). Also, under the Outer Continental Shelf Lands Act (43 U.S.C. 1333(a), as amended), the coastwise laws are extended to fixed structures, artificial islands, drilling platforms, including mobile rigs, and similar structures, during the period in which they are secured to or submerged onto the seabed of the OCS for exploration, development or production purposes (see, e.g., HQ 115799, dated September 30, 2002).

However, Customs (CBP) has long held that the use of a vessel solely to engage in oceanographic research is not coastwise trade (E.g., HQ 109815, of December 5, 1988). Notably, oceanographic research has been defined in this context as encompassing, but not being limited to, such studies pertaining to the sea as seismic, gravity meter and magnetic exploration and other marine geophysical or geological surveys, atmospheric research, and biological research (HQ 113461, of June 8, 1995; and HQ 112122, of July 22, 1992). Most significantly, as part of such oceanographic research, it is well settled that any supplies or equipment carried aboard the vessel and necessary for the research would not be considered merchandise under section 883

(HQ 109815, supra); nor would any marine specimens or samples be considered merchandise under section 883 should they be collected and transported from any research site along the ocean bottom and unladed at a point in the United States (HQs 113461 and 112122, supra).

Furthermore, the collection of marine specimens or samples at a survey/research site would clearly not constitute a salvaging operation under section 316(d) (ibid.; and see HQ 113838, dated February 25, 1997, and the authorities cited and discussed therein).


Under the facts herein presented, and for the reasons explained above, the proposed geophysical investigation or survey to be performed in this case constitutes oceanographic research, and would not involve either the coastwise transportation of merchandise under 46 U.S.C. App. 883 or a salvaging operation under 46 U.S.C. App. 316(d); as such, a foreign-flagged, or other non-coastwise-qualified, vessel may be employed in conducting the proposed geophysical investigation or survey.


Glen E. Vereb

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