H335695

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H335695 January 5, 2024 VES-3-02-OT:RR:BSTC:CCR H335695 HKC CATEGORY: Carriers Constantine G. Papavizas, Esq. Winston & Strawn LLP 1901 L. Street, N.W. Washington, DC 20036 RE: Coastwise Transportation; Outer Continental Shelf; Wind Turbines; 46 U.S.C. §§ 55102 and 55103; 19 CFR §§ 4.80a and 4.80b; 43 U.S.C. § 1333. Dear Mr. Papavizas: This letter is in response to your October 25, 2023 ruling request on behalf of your client [ ] regarding whether the installation of wind turbine generators and associated operations the U.S. outer continental shelf (“OCS”), as described below, would violate the coastwise laws. Our decision follows. FACTS The following facts are from your October 25, 2023 ruling request and subsequent correspondence. Your client proposes to install approximately [ ] wind turbine generator (“WTG”) units for a project organized by [ ]. The project is located in federal waters on the OCS located [ ]. WTG installation will commence in [ ]. The proposed transportation of the WTG units from a U.S. port located on the eastern seaboard, to installation sites on the U.S. Outer Continental Shelf (“OCS”) will be conducted by a coastwise-qualified tug and a coastwise-qualified barge (the “Tug and Barge”). At the installation sites, the WTGs will be installed by a foreign-flagged jack-up vessel (“Jack Up Vessel”), the [ ], which was constructed in [ ] and registered in [ ]. Monopile foundations and transition pieces will already be installed when the jack-up vessel commences WTG installation. Prior to installation, the Jack Up Vessel will travel to the first WTG installation site on the U.S. OCS under its own power, secure its retractable legs to the seabed, and jack up to installation height. After the Jack Up Vessel establishes itself at the installation site, the coastwise-qualified Tug and Barge will moor alongside the Jack Up Vessel, which will remain grounded on the OCS. The components for a single WTG, contained in shipping frames will be lifted onto the deck of the Jack Up Vessel using the Jack Up Vessel’s crane. Additionally, one or more shipping containers containing WTG bolts and nuts and spare parts and provisions will be laded on the Jack Up Vessel. Finally, a second set of shipping containers, consisting of office spaces, tools, rigging equipment, and spare parts will be laded onto the Jack-Up Vessel from the coastwise qualified Tug and Barge. After receiving WTG components from the Tug and Barge, crewmembers onboard the Jack Up Vessel will install the WTG units onto the pre-constructed monopile foundations. The Jack Up Vessel will remain stationary on the seabed via retractable legs throughout this process. Once installation is complete, the Jack Up vessel will then proceed to the next WTG installation site under its own power, while transporting the empty shipping frames and containers described above. At the next installation site, the empty shipping frames, and shipping containers filled with waste, dirty rags, etc. will be offloaded onto the coastwise-qualified Tug and Barge, and a new set of WTG components and containers will be laded aboard the Jack Up Vessel. The Tug and Barge will then return to a U.S. port located on the eastern seaboard. The second set of shipping containers, consisting of office spaces and tools etc., will remain on the Jack Up Vessel until all WTGs have been installed. This process will be repeated at each installation site. Marine crew responsible for operating the Jack Up Vessel and project crew responsible for WTG installation and project oversight will remain aboard the Jack Up Vessel throughout. Once installation is complete at the final installation site, the containers containing office spaces and tools etc. will be unladed onto the Tug and Barge and returned to a U.S. port located on the eastern seaboard. ISSUES Whether the transportation of the WTG components by a coastwise-qualified tug and barge from a U.S. port located on the eastern seaboard, to an anchored, non-coastwise-qualified Jack Up Vessel located on the U.S OCS violates the Jones Act, 46 U.S.C. § 55102? Whether the installation of the subject wind turbine generators by the non-coastwise-qualified Jack Up Vessel on the OCS violates the Jones Act, 46 U.S.C. § 55102? Whether transportation of certain empty shipping frames, containers, tools, and materials between coastwise points by the non-coastwise-qualified Jack Up Vessel violates the Jones Act, 46 U.S.C. § 55102? Whether the transportation of the marine crew and project crew between coastwise points by the non-coastwise-qualified Jack Up Vessel violates the Passenger Vessel Services Act, 46 U.S.C. § 55103? 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 CFR § 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. (Emphasis added). Accordingly, the OCSLA, as amended in 2021, extends U.S. jurisdiction to devices attached to the seabed of the OCS for the purpose of producing non-mineral energy such as wind energy. Issue One: Whether the Transportation of the WTG Components between points in the U.S. and the Jack Up Vessel on the OCS on the coastwise-qualified Tug and Barge Violates 46 U.S.C. § 55102 The Jones Act specifically prohibits the coastwise transportation of “merchandise” between coastwise points by non-coastwise qualified vessels. 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.” Further, 46 U.S.C. § 55102(a) also provides: “[m]erchandise includes (1) merchandise owned by the United States Government, a State, or a subdivision of a State; and (2) valueless material.” For purposes of the Jones Act, merchandise also includes “valueless material.” Accordingly, the WTG components being transported offshore would constitute merchandise. To determine if the proposed transportation occurs between coastwise points, we must examine the points at which the subject merchandise will be laden and unladen. The Jones Act extends to points on 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, 

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; andhas 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 CFR § 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; orany such installation or other device (other than a ship or vessel) for the purpose of transporting or transmitting such resources.(Emphasis added).Accordingly, the OCSLA, as amended in 2021, extends U.S. jurisdiction to devices attached to the seabed of the OCS for the purpose of producing non-mineral energy such as wind energy.Issue One: Whether the Transportation of the WTG Components between points in the U.S. and