United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 2007 HQ Rulings > HQ H002853 - HQ H004642 > HQ H004242

Previous Ruling Next Ruling
HQ H004242





December 22, 2006

VES-3-15/VES-10-01-RR:BSTC:CCI H004242 rb

CATEGORY: CARRIER

Stuart S. Dye
Holland & Knight LLP
2099 Pennsylvania Avenue, NW., Suite 100
Washington, D.C. 20006

RE: Coastwise transportation; Installation/repair operations; Salvage; Debris removal; Outer Continental Shelf; 43 U.S.C. 1333(a); 46 U.S.C. 55102, 55103, 80104

Dear Mr. Dye:

In your letter of December 7, 2006, you request an expedited ruling, on behalf of “Geo Rederi II AS,” and “Geo Century Ltd.,” the managers and time charterer, respectively, of the foreign-flagged vessel, SV GEOHOLM, as to whether the intended use of this vessel on the United States Outer Continental Shelf would violate the coastwise merchandise and passenger laws, 46 U.S.C. 55102 and 55103 (formerly, 46 U.S.C. App. 883 and 289), or the statute on salvaging operations, 46 U.S.C. 80104 (formerly, 46 U.S.C. App. 316(d)). Our ruling on your request follows.

FACTS:

A foreign-flagged vessel would be employed in support of new sub-sea oil wellhead and pipeline installation, and related survey/inspection, operations on the United States Outer Continental Shelf (OCS) in the Gulf of Mexico. The installations would be in new fields or would supplement wells and pipelines damaged or destroyed by hurricanes last year. The vessel would operate two remote underwater vehicles (ROVs) and associated equipment in the sub-sea survey/inspection/installation operations. Also, the vessel would similarly support the maintenance and repair of damaged or existing sub-sea wells and pipelines. For these purposes, the vessel would load, at a United States port, necessary equipment, supplies, materials, pipeline controls, and technical personnel as needed to undertake the described activities. Furthermore, in the course of its offshore operations, as outlined, the vessel might collect debris strewn along the OCS ocean floor from previously damaged/destroyed platforms, rigs, wells or pipelines, and transport such debris to a United States port.

ISSUE:

Whether the proposed survey and inspection activities, wellhead and pipeline installations, and any repairs to damaged wellheads and pipelines, may be performed on or from the foreign-flagged vessel without violating 46 U.S.C. 55102, 55103, or 80104 (formerly 46 U.S.C. App. 883, 289, or 316(d), respectively); and whether the removal of debris from the OCS ocean floor and its transportation to, and unlading at, a United States port, would violate section 46 U.S.C. 55102 or 46 U.S.C. 80104.

LAW AND ANALYSIS:

Under 46 U.S.C. 55102 and 55103, respectively (recodified from former 46 U.S.C. App. 883 and 289; Pub. L. 109-304, October 6, 2006), merchandise and passengers may not be transported between ports or places in the United States 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. 80104 (recodified from former 46 U.S.C. App. 316(d)), with certain exceptions not here relevant, a foreign vessel is prohibited, inter alia, from engaging in salvaging operations in the territorial waters of the United States in the Gulf of Mexico.

In pertinent part, the coastwise laws apply to any point in the territorial waters of the United States, defined as the belt, three (3) nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline (T.D. 78-440). In addition, under the Outer Continental Shelf Lands Act (OCSLA), as amended, 43 U.S.C. 1333(a), the laws of the United States are extended to the subsoil and seabed of the OCS and to all artificial islands, and all 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 therefrom to the same extent as if the OCS were an area of exclusive Federal jurisdiction within a State. Thus, the laws applicable to the OCS include the customs and navigation laws, as well as the coastwise laws, which encompass sections 55102, 55103, and 80104 (see T.D. 54281(1)).

Surveys, Inspections; Well and Pipeline Installation, Repairs

It has long been the position of Customs (now Customs and Border Protection (CBP)) that section 883 [now 55102] does not apply to the transportation of equipment, including ROVs, and supplies and materials, that are used on or from the transporting vessel in effecting such services as inspections/surveys and/or installations of, and/or repairs to, offshore or sub-sea structures, including the laying and repair of pipelines, provided such articles are necessary for the accomplishment of the vessel’s mission, and are usually carried on board as a matter of course; likewise, the carriage aboard the vessel of crew members, and personnel such as divers and technicians, as well as construction personnel, to accomplish the aforementioned services performed on or from the vessel is not precluded by section 289 [now 55103] (E.g., HQ 113838, of February 25, 1997 (involving, inter alia, survey/inspection/maintenance/repair of oil and gas pipelines and production platforms; and installation of pipelines and wellheads); HQ 115218, of November 30, 2000 (installation of pipeline tie-in spool piece to previously laid flow-line); HQ 115771, of August 19, 2002 (pipeline repairs).

Accordingly, the transportation of a charterer’s personnel, along with equipment, supplies, and materials, aboard the vessel, as necessary to inspect submerged structures, including pipelines, and/or to engage in construction activities, such as the installation of wellheads and associated pipelines, and/or repair operations concerning wellheads and pipelines, that are performed with such equipment and by such personnel on or from the subject vessel would not violate the coastwise laws.

Specifically, the equipment, supplies, and materials, as well as the personnel so transported would, under the foregoing circumstances, be connected to the business of the vessel so as not to be merchandise or passengers under section 55102 or 55103, respectively (E.g., HQ 113838, supra; and HQ 115218, supra, citing HQ 113838 (“provided such articles are to be utilized in furtherance of the vessel’s mission...[and] [t]he same rationale renders crewmembers of such vessels, including divers and technicians, as well as any other personnel carried on board in connection with the services performed on or from such vessels, to be other than ‘passengers’ within the meaning of [section 55103]”). Nor would the employment of the support vessel in this regard constitute salvaging operations under section 80104 (see HQ 113838, supra, and authorities cited and discussed therein).

Possible Recovery/Removal of Debris on OCS Floor

When the OCSLA, supra, was amended in 1978 in relation to temporary attachment, the legislative history further made clear that:

Federal law is to be applicable to all activities or all devices in contact with the seabed for exploration, development, and production. The committee intends that federal law is, therefore, to be applicable to activities on drilling rigs, and other watercraft, when they are connected to the seabed by drillstring, pipes, or other appurtenances, on the OCS for exploration, development, or production purposes.

H.Rept. No. 95-590, reprinted at, 1978 U.S. Code Cong. & Admin. News 1450, at 1534.

Consequently, the possible recovery/removal of debris strewn along the OCS ocean floor from previously damaged/destroyed platforms, rigs, wells or pipelines, and the transportation of such debris to, and its unlading at, a United States port, would not implicate section 55102 or 80104. In this respect, such debris cannot legally be perceived as being affixed or attached to the OCS seabed for exploration, development or production purposes pursuant to the OCSLA; and, hence, “such debris locations would not be considered coastwise points under the OCSLA” (HQ 116634, of March 29, 2006; accord, HQ 116593, dated January 6, 2006 (debris strewn along OCS seabed not affixed or attached thereto for purposes of, and, as such, not coastwise points under, OCSLA); HQ 116624, of March 17, 2006; see also, HQ 115850, of November 12, 2002 (severed leg remnants of wrecked/overturned production platforms, still clinging to OCS seabed, not coastwise points)).

HOLDING:

Under the facts presented herein, the proposed survey and inspection activities, wellhead and pipeline installations, and any repairs to damaged wellheads and pipelines, may be performed on or from the foreign-flagged vessel without violating 46 U.S.C. 55102, 55103, or 80104 (formerly 46 U.S.C. App. 883, 289, or 316(d), respectively); and the removal of debris from the OCS ocean floor and its transportation to, and unlading at, a United States port would not violate 46 U.S.C. 55102 or 46 U.S.C. 80104.

Sincerely,

/S/ Glen E. Vereb

Glen E. Vereb

Previous Ruling Next Ruling