H327804

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H327804 October 28, 2022 VES-3-02-OT:RR:BSTC:CCR H327804 AMW CATEGORY: Carriers Constantine G. Papavizas, Esq. Winston & Strawn LLP 1700 K Street, NW Washington, DC 20006 RE: Coastwise Transportation; Offshore Cable; Cable Protection Materials; 46 U.S.C. § 55102; 46 U.S.C. § 55103; 46 U.S.C. § 55109; 19 C.F.R. § 4.80a; 19 C.F.R. § 4.80b; Modification of H322233 (Sept. 2, 2022) Dear Mr. Papavizas: On September 2, 2022, U.S. Customs and Border Protection (CBP) issued Headquarters Ruling HQ H322233 to [ ] regarding whether the installation of offshore cable and associated activities by non-coastwise qualified vessels over the U.S. outer continental shelf (“OCS”) would violate the coastwise laws. As explained below, this ruling modifies one holding in HQ H322233. This modification is not subject to the notice and comment provisions of 19 U.S.C. § 1625(c) because HQ H322233 has been in effect for less than 60 days; this ruling modifying HQ H322233 is effective immediately pursuant to 19 CFR § 177.12(e). As described more fully below, CBP is modifying its holding in HQ H322233, relating to landing small amounts (i.e., 5% or less by quantity of the original amount of cable placed aboard the vessel) of surplus cable by a cable-laying vessel at a coastwise point other than the original point of lading, to state that this is not prohibited under the Jones Act, which has been CBP’s longstanding position on the issue. FACTS The following facts are from your December 7, 2021, ruling request. Your client proposes to transport and install electric transmission cable on the seabed off the coast of [ ] in connection with the construction of a wind energy project to be installed on the U.S. outer continental shelf. You anticipate that the cable laying will occur [ ]. Your client will utilize a non-coastwise-qualified Cable Installation Vessel (the “CIV”), the [ ]. Your client anticipates that the CIV may visit the following ports during the operation: [ ]. You state that the cable will arrive at the project site on board the CIV itself from a U.S. or foreign port or will be delivered to the CIV from another non-coastwise-qualified vessel from a foreign port. Any cable loaded onto a non-coastwise-qualified vessel other than the CIV, will be either: (1) transported to a U.S. port to be unloaded (and subsequently loaded onto the CIV); or (2) unloaded onto the CIV within U.S. territorial waters. You propose that any excess cable not placed on the seabed by the CIV along the designated route will either be: (1) returned to its point of origin in the United States to be unloaded; or (2) unloaded at a different U.S. port if the quantity left over is five percent or less of the length of the originally laden cable. During the course of the operation, the CIV will place cable to both connect the subject wind turbine towers to each other or to an offshore substation (known as the “array cable installation”) and to connect the offshore wind farm to the onshore electrical grid (known as the “export cable installation”). The cable may be placed in stages, meaning that when the CIV depletes a roll or portion of cable, it will then attach a new section of cable to the previously placed portion. To do so, the CIV would recover the end of the previously placed, underwater portion and join it to the cable on board the vessel before proceeding to lay the remaining cable. For cable placed in U.S. waters near the shore, a coastwise-qualified vessel will be used to recover the cable and pull it to a land connection. Much of the cable will be embedded into the seabed using a tracked underwater remotely operated vehicle (“ROV” or “trenching machine”), likely the [ ]. The trenching machine will use a chain cutter system combined with a series of water jets to cut through seabed sediment and rock to create a pathway on the seabed. The trenching machine will simultaneously guide the cable into place in this pathway by use of “cable loading arms,” which will load the cable into a cable trough, located above the chain cutter and forward of the jetting swords. The jetting system will be driven by two hydraulically driven water pumps to emulsify “sand-like” material. The trenching machine is capable of creating a pathway in the seabed to a maximum of 3 meters in depth, depending on ground conditions, and .6 meters wide. Finally, once the cable has been placed on the seabed, the CIV may place “cable protection” over portions of the cable. Specifically, the CIV may place rock bags or concrete mats over cables on the seabed at such places where cables cross or otherwise require protection. The rock bags or concrete mats may be sourced either from a U.S. port or foreign port or indirectly from a foreign port where they would first be delivered to a U.S. port or a vessel in a U.S. port tied alongside a berth or anchored in U.S. territorial waters. Finally, the CIV will carry a complement of approximately [ ] marine crew who will operate the vessel and approximately [ ] project crew tasked with performing functions associated with installing the cable. Occasionally, you state that representatives of the project developer will also board the CIV to perform project oversight and inspection functions. ISSUES Whether the use of the trenching machine to create a seabed cable trench violates the coastwise dredging statute, 46 U.S.C. § 55109? Whether the subject cable placement and movement by a non-coastwise-qualified vessel violates the Jones Act, 46 U.S.C. § 55102? Whether the return of surplus cable to a U.S. port by a non-coastwise-qualified vessel violates the Jones Act, 46 U.S.C. § 55102? Whether the transportation of concrete mats and other material on board a non-coastwise-qualified vessel to be placed over the subject cable violates the Jones Act, 46 U.S.C. § 55102? Whether the transportation of the marine and project crew on board a non-coastwise-qualified vessel violates the Passenger Vessel Services Act, 46 U.S.C. § 55103? LAW AND ANALYSIS Your request presents five separate issues as outlined above. This ruling analyzes each below. Issue One: Whether the use of the trenching machine to create a seabed cable trench violates the coastwise 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 Latin word meaning to hollow out. Its common, plain and ordinary meaning is to make a cavity or hole in, to dig out, hollow out, to remove soil by digging, scooping out or other means. The common plain and ordinary meaning of the word “dredging” is the removal of soil from the bottom waters by suction or scooping or other means. CBP (to include its predecessor, the U.S. Customs Service) has consistently held that the term “dredging” within the meaning of 46 U.S.C. § 55109, is “the use of a vessel equipped with excavating machinery in digging up or otherwise removing submarine material.” See HQ 103692 (Dec. 28, 1978, published as Customs Service Decision (C.S.D.) 79-331); HQ 109108 (Nov.13, 1987); HQ 109910 (Jan. 26, 1989, published as C.S.D. 89-64). CBP has nevertheless held that the use of certain devices to create underwater trenches for the purpose

Your request presents five separate issues as outlined above. This ruling analyzes each below.Issue One: Whether the use of the trenching machine to create a seabed cable trench violates the coastwise 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 Latin word meaning to hollow out. Its common, plain and ordinary meaning is to make a cavity or hole in, to dig out, hollow out, to remove soil by digging, scooping out or other means. The common plain and ordinary meaning of the word “dredging” is the removal of soil from the bottom waters by suction or scooping or other means. CBP (to include its predecessor, the U.S. Customs Service) has consistently held that the term “dredging” within the meaning of 46 U.S.C. § 55109, is “the use of a vessel equipped with excavating machinery in digging up or otherwise removing submarine material.” See HQ 103692 (Dec. 28, 1978, published as Customs Service Decision (C.S.D.) 79-331); HQ 109108 (Nov.13, 1987); HQ 109910 (Jan. 26, 1989, published as C.S.D. 89-64). CBP has nevertheless held that the use of certain devices to create underwater trenches for the purpose of cable laying does not constitute “dredging.” In particular, CBP has reasoned that the use by cable-layin