H321256

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H321256 November 2, 2021 VES-3-02-OT:RR:BSTC:CCR H321256 DMK CATEGORY: Carriers Mr. Charlie Papavizas, Esq. Winston & Strawn LLP 1901 L Street, N.W. Washington, DC 20036 RE: Undersea Cable Laying; 46 U.S.C. § 55102; 46 U.S.C. § 55103; 46 U.S.C. § 55109; 19 C.F.R § 4.50(b); 19 C.F.R. § 4.80. Dear Mr. Papavizas: This letter is in response to your October 12, 2021 ruling request on behalf of your client [ ] regarding whether certain activities related to the installation of telecommunications cable by a non-coastwise qualified vessel in U.S. territorial waters, as described below, would violate the coastwise laws. Our decision follows. FACTS The following facts are from your ruling request and supporting information received in our office on October 12, 2021 and October 18, 2021. Your client has requested U.S. Customs and Border Protection (“CBP”) determine whether certain operations related to the installation of telecommunications cable in U.S. territorial waters off the coast of [ ] would violate the Jones Act, 46 U.S.C. § 55102, and the Dredging Act of 1906 (the “Dredging Statute”), 46 U.S.C. § 55109. You state the proposed operation is intended to provide telecommunications between the United States [ ] and Europe [ ]. As such, [ ] has entered into a contract to lay and bury the cable. [ ] proposes to use the non-coastwise-qualified [ ] (the “Vessel”), a cable laying vessel employing a self-propelled cable burial tool, to perform the operation. The Vessel will be laden with cable segments in [ ] and proceed to the landfall site where it will begin laying and burying the cable. You have provided the exact coordinates for the cable lay operation, including the cable’s landfall point. When the project is complete, the Vessel will leave U.S. waters and discharge any remaining cable at a foreign location. Your request describes the cable burial as involving a “proprietary self-propelled cable burial tool” [ ] to simultaneously lay the cable and bury it for protection in certain locations. You state that the [ ] utilizes caterpillar tracks and is tethered to the Vessel. The tool is equipped with water jets and jetting nozzles to fluidize the soil and utilizes a cutting wheel or digging chain to cut through hard sediment and rock. The [ ] can open a trench up to 350 mm wide and up to 2.3 m deep. After the cable is laid, the displaced soil partially subsides and collapses into the trench, partly burying the cable. The Vessel will enter and leave US waters with its marine crew. Additionally, six specialized technicians will join the Vessel at a US port, and either be returned to the same port after the Vessel goes beyond US territorial limits or stay on board and leave the vessel at a Canadian port. These technicians will be [ ] citizens and are necessary to the operation of the cable burial device. ISSUES Whether the subject cable laying operation by the non-coastwise-qualified vessel violates the Jones Act, 46 U.S.C. § 55102? Whether the subject cable burial operations by the non-coastwise-qualified vessel violates the Dredging Statute, 46 U.S.C. § 55109? Whether the subject transportation of individuals onboard the non-coastwise-qualified vessel violates the Passenger Vessel Services Act, 46 U.S.C. § 55103? LAW AND ANALYSIS Generally, the coastwise laws prohibit the transportation of 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.” Issue One: Whether the Cable Laying Operation Violates 46 U.S.C. § 55102 First, we determine whether the cable laying operations violate the Jones Act, 46 U.S.C. § 55102. 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 transportation of merchandise, the Jones Act, is found at 46 U.S.C. § 55102, and provides in pertinent part: 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. Pursuant to 19 U.S.C. § 1401(c), the word “merchandise” is defined as “goods, wares, and chattels of every description, and includes merchandise the importation of which is prohibited, and monetary instruments as defined in section 5312 of Title 31.” For purposes of the Jones Act, merchandise also includes “valueless material.” 46 U.S.C. § 55102(a)(2). The CBP Regulations promulgated under the authority of 46 U.S.C. § 55102 provide that a coastwise transportation of merchandise takes place when merchandise laden at a coastwise point is unladen at another coastwise point, regardless of origin or ultimate destination. 19 CFR § 4.80b(a). First, we find that the proposed cable laying operations do not constitute “transportation” within the meaning of the Jones Act. CBP has long held that the sole use of a vessel in laying pipe or cable is not considered a use in the coastwise trade of the United States, even when the pipe or cable is laid between coastwise points. See, e.g., HQ H311603 (Aug. 31, 2020), HQ 115431 (Sept. 4, 2001), HQ 115333 (Apr. 27, 2001). The fact that the material is not laded as cargo but is only paid out in the course of the laying operation makes such operation permissible. Id. Further, since the use of a vessel in pipe or cable laying is not a use in the coastwise trade, a non-coastwise-qualified vessel may carry pipe or cable which is laid between such points. In line with these rulings, your request outlines a scenario in which the subject cable will be paid out from a static cable tank and deposited via a gantry cable way. As such, the proposed use of the non-coastwise-qualified vessel to lay cable between coastwise points is not in violation of 46 U.S.C. § 55102. Second, we find that the discharge of excess cable at a foreign location does not violate the Jones Act. Since the excess cable is to be unladed at a foreign location, the fact that it was laded at a coastwise point is of no consequence for the purposes of this ruling. There is no coastwise movement, and consequently no violation of 46 U.S.C. § 55102. Issue Two: Whether the Cable Burial Operation Violates 46 U.S.C. § 55109 Next, we determine whether the proposed cable burial operation is in violation of the Dredging Statute, 46 U.S.C. § 55109. Pursuant to 46 U.S.C. § 55109, only coastwise-qualified vessels may engage in dredging in the navigable waters of the United States, providing, in pertinent part: [A] vessel may engage in dredging in the navigable waters of the United States only if— (1) the vessel is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; (2) the charterer, if any, is a citizen of the United States for purposes of engaging in the coastwise trade; and (3) the vessel has been issued a certificate of documentation with a coastwise endorsement under chapter 121 of this title or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement Dredging is defined as “excavation” by any means: The word “excavate” is derived from the Lat