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HQ H004781

December 27, 2006

VES-3-02-RR:BSTC:CCI H004781 GOB


Mr. Dave Ross
Promar Agency Ltd.
14009 Hughes Road West
Dickinson, Texas 77539

RE: Coastwise Transportation; 46 U.S.C. § 55102

Dear Mr. Ross:

This letter is in response to your letter of December 26, 2006, with respect to the coastwise transportation of certain equipment. Our ruling is set forth below.


You describe the pertinent facts as follows. The M/V PORT NELSON (the “vessel”) was positioned off the shore of Galveston for hold cleaning which was completed on December 25, 2006. Due to high seas and winds, the cleaning equipment could not be removed from the vessel and placed upon a launch boat for return to the mainland. The vessel therefore proceeded to Port Arthur, Texas with the cleaning equipment onboard. You ask for permission to remove the cleaning equipment from the vessel at Port Arthur.

We are informed that the vessel is a foreign-flag vessel.


Whether the removal of the cleaning equipment from the vessel at Port Arthur will constitute a violation of 46 U.S.C. § 55102?


Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under
the laws of, and owned by citizens of the United States. Such a vessel, after it has obtained a coastwise endorsement from the U.S. Coast Guard, is said to be “coastwise qualified.”

The coastwise laws generally apply to points in the territorial sea, which is 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.

The coastwise law applicable to the carriage of merchandise is found in 46 U.S.C. § 55102 (often referred to as the “Jones Act;” recodified by Pub. L. 109-304, enacted on October 6, 2006), which provides as follows:

(a) Definition. In this section, the term “merchandise” includes-
merchandise owned by the United States Government, a State, or a subdivision of a State; and
valueless material.

(b) Requirements. Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not provide any part of the transportation of merchandise by water, or by land and water, between points in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel-
is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and
has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement.

(c) Penalty. Merchandise transported in violation of subsection (b) is liable to seizure by and forfeiture to the Government. Alternatively, an amount equal to the value of the merchandise (as determined by the Secretary of Homeland Security) or the actual cost of the transportation, whichever is greater, may be recovered from any person transporting the merchandise or causing the merchandise to be transported.

Section 4.80b(a), Customs and Border Protection (“CBP”) Regulations (19 CFR § 4.80b(a)) provides in pertinent part:

A coastwise transportation of merchandise takes place, within the meaning of the coastwise laws, when merchandise laden at a point embraced within the coastwise laws (“coastwise point”) is unladen at another coastwise point, regardless of the origin or ultimate destination of the merchandise.

In the situation at issue, if the cleaning equipment is unladen at Port Arthur, it will have been transported from one coastwise or U.S. point, off the shore of Galveston within U.S. territorial waters, to a second coastwise or U.S. point, Port Arthur, by a non-coastwise-qualified, or foreign-flag, vessel. Such transportation is violative of 46 U.S.C. § 55102. If the goods are unladen in Port Arthur, a penalty will be assessed against the carrier of such goods.


The transportation of the cleaning equipment to Port Arthur, as described above, is violative of 46 U.S.C. § 55102.


Glen E. Vereb

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