HQ 109375: Applicability of 46 U.S.C. App. 251(a) to the transshipment in territorial waters of fish products received on the high seas by the transshipping vessel as whole fish and processed on board that vessel

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                      HQ 109375

                                   March 24, 1988


          VES-7-03 CO:R:P:C 109375/109383 PH

          CATEGORY: Carriers

          Myron H. Nordquist, Esq.
          Kelley, Drye & Warren
          1330 Connecticut Avenue, NW.
          Washington, D.C. 20036

          RE:  Applicability of 46 U.S.C. App. 251(a) to the
          transshipment in territorial waters of fish products received
          on the high seas by the transshipping vessel as whole fish
          and processed on board that vessel

          Dear Mr. Nordquist:

              This in response to your letters of February 19, 1988, in
          which you request a ruling on the applicability of the
          Nicholson Act to certain described fishing operations.

          FACTS:

              You state that your client plans to enter into a fishery
          joint venture.  In this joint venture, your client will
          organize United States-flag fishing vessels to catch fish and
          transfer them while still in the cod end to a foreign-flag
          processing ves- sel in the United States exclusive economic
          zone (EEZ) off the East Coast of the United States.  Once
          aboard the foreign-flag processing vessel, the transferred
          whole fish will be processed into various fishery products,
          including fish oil.

              You state that your client wishes to transport this
              processed fish to one of two locations:  (1) a sheltered
          area that is with- in United States territorial waters but is
          not a "port" in any physical sense whatsoever; or (2) a
          United States port as that term is commonly understood.  At
          one of these locations your client plans to have the
          processing vessel transfer the fish oil to a foreign-flag
          transport vessel which would then depart for an overseas port
          with the fish oil as cargo.  During the course of this
          transfer of the fish oil, you state that the processing
          vessel would not touch "United States territory" in any way.

              For purposes of this inquiry, you ask that we assume that
          the joint venture complies with all requirements of United
          States law other than the provisions of the Nicholson Act.

          ISSUES:

              1.  Is the transshipment at a point in United States
          territorial waters which is not a "port" in any physical
          sense whatsoever of fish products from a foreign-flag vessel
          to another vessel for transportation abroad a "landing in a
          port of the United States," as that phrase is used in 46
          U.S.C. App. 251(a)?

              2.  Does 46 U.S.C. App. 251(a) prohibit the landing by a
          foreign-flag vessel in a port of the United States of fish
          prod- ucts processed on that vessel from fish it received
          whole from catching vessels on the high seas?

          LAW AND ANALYSIS:

              Under the Act of September 2, 1950, as amended (chapter
          842, 64 Stat. 577; 46 U.S.C. App. 251(a), often called the
          Nicholson Act):

                    Except as otherwise provided by treaty or
                    convention to which the United States is a party,
                    no foreign-flag vessel shall, whether documented as
                    a cargo vessel or otherwise, land in a port of the
                    United States its catch of fish taken on board such
                    vessels on the high seas or fish products processed
                    therefrom, or any fish or fish products taken on
                    board such vessel on the high seas from a vessel
                    engaged in fishing operations or in the processing
                    of fish or fish products.

              For purposes of this statute, the high seas are those
          waters outside the territorial waters of the United States or
          those of any other nation.  The territorial waters of the
          United States consist of the territorial sea, defined as the
          belt, 3 nautical miles wide, adjacent to the coast of the
          United States and seaward of the territorial sea baseline.

              The Customs Service has consistently held that the
          transshipment in United States territorial waters of fish or
          fish products caught or taken on board on the high seas,
          including the EEZ of the United States, from the foreign-flag
          vessel which caught or took on board the fish or fish
          products to another ves- sel, whether or not the fish or fish
          products are to be exported, is a landing of the fish or fish
          products prohibited by 46 U.S.C.  App. 251(a).  We have so
          held regardless of whether the point in territorial waters
          where transshipment occurs is what you describe as a "port"
          in a "physical sense"  (see, e.g., our ruling dated January
          26, 1981, file number 104779, copy enclosed for your
          convenience).

              Title 46, United States Code Appendix section 251(a),
          prohibits the landing by a foreign-flag vessel in a port of
          the United States of:  (1) its catch of fish taken on board
          such ves- sel on the high seas, (2) fish products processed
          from its catch of fish taken on board such vessel on the high
          seas, or (3) fish or fish products taken on board such vessel
          (the landing vessel) on the high seas from a vessel engaged
          in fishing operations or in the processing of fish or fish
          products.  In the operation un- der consideration, a
          foreign-flag fish processing vessel would receive whole fish
          from catching vessels on the high seas and, after processing
          on board the processing vessel, transship the product of that
          processing (fish oil) to another vessel for transportation
          abroad.  In such an operation, the processing ves- sel is
          clearly not:  (1) landing its catch of fish taken on board
          the processing vessel on the high seas, or (2) landing fish
          prod- ucts processed from its catch of fish taken on board
          the process- ing vessel on the high seas.  Nor, you contend,
          is it landing "fish ... taken on board such vessel on the
          high seas ..." or "fish products taken on board such vessel
          on the high seas ...." Instead, you state, the processing
          vessel is transshipping the products of whole fish taken on
          board the vessel on the high seas.

              After thoroughly reviewing the history of 46 U.S.C. App.
          251(a), we have concluded that the interpretation of section
          251(a) you suggest is incorrect.  Section 4311, Revised
          Statutes, which was the statute amended by the Nicholson Act
          in 1950 (Chapter 842, 64 Stat. 577), reserved the privileges
          of vessels employed in the American fisheries to properly
          documented vessels built in the United States and owned by
          United States citizens (see sections 4132 and 4312, Revised
          Statutes).  Before enactment of the Nicholson Act, it was the
          understanding of Congress that this statute and section
          4.96(a), Customs Regulations of 1943, "prohibit the landing
          of fish by foreign fishing vessels coming directly to United
          States ports from the fishery banks (Report No. 2364, August
          15, 1960, of the Senate Committee on Interstate and Foreign
          Commerce).  The Nicholson Act was intended to strengthen the
          laws protecting the domestic fishing industry (House Report
          No. 2934, August 16, 1950, set forth at 1950 U.S.C.C.A.N.
          3539).  Specifically, it was intended to "make impossible the
          employment" of the "device" under which "foreign fishing
          vessels without rights under international agreements are
          able, after making their catches, to obtain documentation as
          car- go vessels in their home or other foreign ports and, as
          such car- go vessels, may proceed to American ports and
          market their fish" (House Report No. 2934, supra).

              Under the interpretation of 46 U.S.C. App. 251(a) you
          suggest, a foreign-flag vessel could avoid the prohibitions
          of section 251(a) by processing whole fish received on the
          high seas.  Clearly, this is antithetical to the purpose of
          the Nicholson Act and would result in a more egregious
          weakening of the protection intended under the fisheries laws
          than the device the employment of which the Nicholson Act was
          intended to make impossible.  Consistent with the intent of
          the Nicholson Act, we interpret section 251(a) to prohibit
          the landing in the United States by a foreign-flag vessel of
          fish products (including fish oil) that vessel has processed
          from whole fish it received on the high seas.  This follows
          our past rulings on this issue (see, e.g., our ruling to you
          dated July 20, 1983, file number 106191, copy enclosed for
          your convenience).

              We are, as you request, assuming that the joint venture
              you describe complies with all requirements of law other
          than 46 U.S.C. App. 251(a).  However, we note, as you may
          already be aware, that the laws relating to the United States
          documentation of vessels for the fisheries have recently been
          amended (see Pub- lic Law 100-239).  Under this amendment,
          "fisheries" is defined in 46 U.S.C. 12101 to include, in
          addition to the activities formerly listed in 46 U.S.C.
          12101(6), the processing, storing, and transporting (except
          in foreign commerce) of fish and other listed marine life in
          the navigable waters of the United States or the exclusive
          economic zone.

          HOLDING:

              1.  The transshipment anywhere in United States
              territorial waters of fish products from a foreign-flag
          vessel to another vessel for transportation abroad is a
          "landing in a port of the United States," as that phrase is
          used in 46 U.S.C. App. 251(a).

              2.  The landing by a foreign-flag vessel in a port of the
          United States of fish products processed on that vessel from
          fish it received whole from catching vessels on the high seas
          is prohibited by 46 U.S.C. App. 251(a).

                                      Sincerely,




                                       Edward T. Rosse
                                       Acting Director, Regulatory
                                       Procedures and Penalties Division