H358624

H358624 CATEGORY: Carriers Mr. Constantine G. Papavizas Winston & Strawn LLP 1901 L Street, NW Washington, D.C. 20036 RE: 46 U.S.C. § 55102; 19 C.F.R. § 4.80b; Continuity of Transportation; Coastwise Transportation. Dear Mr. Papavizas: This letter is in response to your correspondence dated March 5, 2026 , on behalf of your client, […………… …………………], in which you inquire about whether your client’s use of a non-coastwise-qualified vessel to transport merchandise between United States (“U.S.”) coastwise points would constitute a violation of the U.S. coastwise laws.1 Our decision follows. FACTS The following facts are from your ruling request, supporting documents, and e-mails to this office dated March 5, 2026. On [……………..], [……………………… ………………… .] entered into a contract of affreightment with [….] for transport aboard the […………… …... ] (“the Vessel”), a U.S.-flag, non-coastwise-qualified vessel, to transport [……………………………………………………… ]. Of the [……………………… 1 You have asked this office for confidential treatment of bracketed information. CBP Regulations at 19 C.F.R. § 177.2(b)(7) provide that the requester of a ruling from our office may ask that privileged or confidential commercial or financial information supplied for purposes of preparing the requested ruling not be disclosed. Such requests will be considered if the information is clearly identified and the reasons for requesting that information not be disclosed are provided. If this office receives a Freedom of Information Act request for your submission, Regulations at 6 C.F.R. § 5.12, et seq. regarding the disclosure of business information provide that the submitter of business information will be advised of receipt of a request for such information whenever the business submitter has in good faith designated the information as commercially or financially sensitive information. We accept your request for confidential treatment as a good faith request. 1 ……………………………………………………………………………………….. ……………………… ………………..]. The bills of lading indicate that the merchandise was intended for the […………………….].2 On [………………………….], advised […] that [………………………………. …….]3 [……………………………………………………………………………………… ……… .4 ……………… ] On [……………………………………………………………….. 5 [……………………………….]].6 …………………………] According to your ruling request the Vessel is expected to arrive at [………………………………………. .]. At this time, [……………….] cannot provide the exact location in […………………….] where the merchandise will be offloaded, but you expect some or all the cargo will be offloaded at a berth other than the one at which it was loaded. ISSUE Whether the transportation of the subject [………………………………… ……………………], two coastwise points, to [……… …………..], another coastwise point, other than the point of lading, constitutes a violation of the coastwise laws. LAW AND ANALYSIS The coastwise law applicable to the transportation of merchandise, known as the Jones Act, is found at 46 U.S.C. § 55102,7 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— (1) is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and (2) 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 46 U.S.C. § 55102, 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 2 Exhibit A, […………………………………………………………………………………………………. …….]. 3 […………………………………………………………………………………………………………. …………………………………………………..]. 4 Exhibit B, [……………………………………………]. 5 Your ruling request states that […………………..] is permitted to redirect the shipment under the terms of the contract. 6 Exhibit C, [……………………………………..]. 7 Formerly 46 U.S.C. App. § 883. See Pub. L. 109-304 (Oct. 6, 2006). 2 coastwise laws apply, either directly or via a foreign port, unless the vessel holds a coastwise 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). 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.” Also, the Jones Act provides, at 46 U.S.C. § 55102(a): “[m]erchandise includes (1) merchandise owned by the United States Government, a State, or a subdivision of a State; and (2) valueless material.” As such, any cargo, regardless of value, is generally considered merchandise for the purpose of the Jones Act. Customs and Border Protection (“CBP”) Regulation 19 C.F.R. § 4.80b(a) provides in relevant 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 Bermuda, 70 U.S. 514, 553 (1865), the Supreme Court held that a transportation from one coastwise point to another remains continuous, so long as intent remains unchanged, no matter what stoppages or transshipments intervene. The Court went on to reaffirm the longstanding rule that: [E]ven the landing of goods and payment of duties does not interrupt the continuity of the voyage of the cargo, unless there be an honest intention to bring them into the common stock of the country. If there be an intention, either formed at time of original shipment, or afterwards, to send the goods forward to an unlawful destination, the continuity of the voyage will not be broken, as to the cargo, by any transactions at the intermediate port.8 CBP has held that a break in the continuity of transportation can occur under a variety of circumstances, freeing a non-coastwise-qualified vessel from liability for what would otherwise have been a violation of the coastwise laws for the transportation of merchandise between U.S. coastwise points. In H256883, CBP held that the continuity of transportation was broken when a non-coastwise qualified vessel carrying a shipment of phenol intended for unlading in Argentina was rejected by the consignee due to mistaken contamination and was offloaded at another U.S. coastwise point. HQ H256883 (Sept. 16, 2014). In H167437, CBP held that the continuity of transportation was broken when a shipment of chemicals intended for unlading in Peru was rejected after a bulkhead cracked on the non-coastwise qualified 8 Id. at 554 (1865). 3 vessel during transportation and cross-contaminated the shipment. HQ H167437 (June 17, 2011). In H138236, CBP held that the continuity of transportation was broken when a non- coastwise qualified vessel transporting dry soybeans to China was struck by another vessel, took serious damage, and had to return to a second coastwise point to unlade its cargo to undergo repairs. HQ H138236 (Dec. 15, 2010). Additionally, CBP has consistently held that the continuity of transportation can be broken by the actions of a non-party foreign government in a number of circumstances. For instance, it has been CBP’s longstanding position that a break in the continuity of transportation occurs if merchandise is rejected by a foreign government at the port of destination, if there was an honest intent to introduce 

The coastwise law applicable to the transportation of merchandise, known as the Jones Act, is found at 46 U.S.C. § 55102,7 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— (1) is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and (2) 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 46 U.S.C. § 55102, 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 2 Exhibit A, […………………………………………………………………………………………………. …….]. 3 […………………………………………………………………………………………………………. …………………………………………………..]. 4 Exhibit B, [……………………………………………]. 5 Your ruling request states that […………………..] is permitted to redirect the shipment under the terms of the contract. 6 Exhibit C, [……………………………………..]. 7 Formerly 46 U.S.C. App. § 883. See Pub. L. 109-304 (Oct. 6, 2006). 2 

coastwise laws apply, either directly or via a foreign port, unless the vessel holds a coastwise 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). 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