H333956

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H333956 September 14, 2023 VES-3-02-OT:RR:BSTC H333956 HKC CATEGORY: Carriers Jennifer A. Carpenter President & CEO The American Waterways Operators 801 North Quincy Street, Suite 500 Arlington, VA 22203 RE: Coastwise Transportation; Monopile Foundation; 46 U.S.C. § 55102; Modification of H328718 (July 17, 2023). Dear Ms. Carpenter: This letter is in response to your August 18, 2023 request for revocation filed on behalf of the American Maritime Partnership, regarding ruling HQ H328718. In your request for revocation, you raised three distinct arguments that H328718 does not provide the adequate information and clarity necessary for informed compliance. Upon review, we have modified HQ H328718 in part to clarify its holdings. HQ H328718 is hereby modified as follows: FACTS The following facts are from the requestor’s November 25, 2022, ruling request. The requestor’s client, [ ] is a party to a [ ] agreement with [ ]. The requestor’s client proposes installing offshore wind turbine generators (“WTGs”) in federal waters using the [ ] or another similar non-coastwise-qualified vessel. The offshore WTGs would be spaced on average no less than [ ] nautical miles apart and no more than [ ] nautical miles apart. Based on current planning, subsea cable will have been laid in the lease area prior to the installation of the monopiles and no monopile will be installed closer than [ ] nautical miles to any laid cable. To accomplish this, multiple monopiles will be loaded aboard a non-coastwise-qualified foreign-flagged installation vessel in a U.S. port. The installation vessel will sail to the federal lease area where it will install each monopile at a pristine seabed site while maintaining its position utilizing a dynamic positioning (“DP”) system, with the intention of remaining unanchored from the seabed. However, the requestor notes, the installation vessel may have to anchor at an installation site depending on weather conditions before it commences monopile installation operations at each site. The installation vessel is not a jack-up vessel. There will be no scour protection installed at any of these pristine sites prior to the installation of the monopiles. The installation vessel will not move other than for corrections for changing wind, current, and wave conditions during the monopile installation when in DP mode. Should a foreign-flagged jack-up vessel be utilized if the [ ] is unavailable, said jack-up vessel will jack up at the pristine work site prior to installing a monopile, and then jack down and sail to the next site to repeat the operation. Thus, the monopile will be the first installed item on the pristine seabed at each future WTG location. Scour protection will be installed by a separate, coastwise-qualified vessel following installation of each monopile. Once several monopiles have been installed, the foreign-flagged installation vessel will return to a U.S. port to pick up the next set of monopiles, and operations will be repeated until all monopiles have been installed. ISSUE Whether the process of installing monopiles described above using a foreign-flagged installation vessel would result in a violation of the Jones Act, 46 U.S.C. § 55102? LAW AND ANALYSIS The coastwise law applicable to the transportation of merchandise, known as 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. 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. 33 C.F.R. § 2.22(a)(2). In addition, Section 4(a)(1) of the Outer Continental Shelf Lands Act of 1953 (“OCSLA”) (as amended) provides that the Constitution and laws and civil and political jurisdiction of the United States are extended to: the subsoil and seabed of the outer Continental Shelf; all artificial islands on the outer Continental Shelf; 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, including non-mineral energy resources; or any such installation or other device (other than a ship or vessel) for the purpose of transporting or transmitting such resources. Accordingly, the OCSLA extends U.S. jurisdiction to installations and devices attached to the seabed of the OCS for the purpose of producing non-mineral energy resources such as wind energy. The Jones Act specifically prohibits the coastwise transportation of “merchandise” between coastwise points by non-coastwise-qualified vessels. The Jones Act sets forth that the term “merchandise” “includes … merchandise owned by the United States Government, a State, or a subdivision of a State” and “valueless material.” See 46 U.S.C. § 55102(a). CBP additionally utilizes the definition of “merchandise” in 19 U.S.C. § 1401(c): “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.” Furthermore, by interpretations in its Jones Act administrative letter rulings, CBP has distinguished the transportation of “vessel equipment” from the transportation of “merchandise.” Here, the offshore transportation of monopiles would constitute transportation of merchandise. The term “coastwise point” is not defined in the Jones Act itself. 19 CFR § 4.80b(a) references the term as follows: “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….” This includes all points within U.S. territorial waters (i.e., landward points within three nautical miles of the territorial baseline) as well as limited extension to those points on the OCS that are captured by the jurisdictional provisions of the OCSLA. Unlike U.S. territorial waters, however, the extent of U.S. jurisdiction on the OCS is limited. In its application of the Jones Act, CBP interprets the OCSLA to provide CBP jurisdiction where there is an installation or device attached to the seabed serving a purpose as articulated in the OCSLA—the exploration for, development, production, transmission, or transportation of resources. 43 U.S.C. § 1333(a)(1). CBP previously has determined that jurisdiction does not reach activity occurring on the pristine seabed of the OCS where there is no installation or device attached to the seabed, and thus for Jones Act purposes no coastwise point exists. See, e.g., HQ 115069 (June 14, 2000) (noting a pristine site “is not considered to be a coastwise point”). Furthermore, in relation to the transportation of merchandise within and between such areas to which U.S. coastwise laws apply, the term “coastwise point” is interpreted narrowly. In this context, CBP has consistently determined that transportation of merchandise between different points in the same harbor, or even along the same pier, by a non-coastwise-qualified vessel results in a violation of the Jones Act, while a lading and unlading at the same point does not. See, e.g., H169017 (July 25, 20