HQ 111286: U.S.-built barge sold foreign to be used as dredge in U.S. waters

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 111286


                          May 21, 1991


VES-10-02-CO:R:IT:C  111286 KVS

CATEGORY:  Carriers

Mr. Robert J. Taylor
Taylor Associates
23827 2nd Ave. West
Bothell, WA  98021

Re:  U.S.-built barge sold foreign to be used as dredge in U.S.
     waters

Dear Mr. Taylor:

     This is in response to your letter dated September 6, 1990,
which requests a ruling regarding the use of a U.S.-built barge,
which has been sold foreign, in dredging operations located
within the territorial waters of the United States.

FACTS:

     You state that your client is contemplating the purchase of
an unmanned barge.  The vessel, named the ARL-10, was built in
1944 at Baltimore, Maryland for the U.S. Navy.  The vessel was
built as a repair ship, using an LST design.  In 1966, the vessel
was purchased by the Canadian Pacific Railway and converted to a
rail-trailer ferry.  In 1985, the vessel was decommissioned and
sold.  Since that time, the vessel has been registered as a
barge, presumably under Canadian registery.

     Your client wishes to purchase the barge, convert it to a
deck barge, register the vessel in the United States, and use it
in a sand dredging operation in San Francisco Bay.

ISSUE:

     Whether a U.S.-built barge, which has been sold foreign, may
be used in dredging operations located within the territorial
waters of the United States.

LAW AND ANALYSIS:

     Section 1 of the Act of May 28, 1906 (36 Stat. 204; 46
U.S.C. 292), provides that "a foreign-built dredge shall not,
under penalty of forfeiture, engage in dredging in the United
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States unless documented as a vessel of the United States.  The
Customs Service has ruled that dredging, for purposes of 46
U.S.C. 292, means the use of a vessel equipped with excavating
machinery in digging up or otherwise removing sub-marine
material.

          It is the position of the Customs Service that because
the prohibition in 46 U.S.C. 292 relates to build, and not the
documentation of a dredge, a dredge documented under a foreign
flag may engage in dredging in the United States if it was built
in the United States (C.S.D. 85-11; see also, Customs Letter
Ruling 110063 KMF (dated April 12, 1989)).

     However, title 46, United States Code, section 883, in
pertinent part, prohibits the transportation of merchandise
between points in the United States embraced within the coastwise
laws in any vessel other than a vessel built in and documented
under the laws of the United States and owned by persons who are
citizens of the United States.  Points in the United States
embraced within the coastwise laws include points in the
territorial sea (defined as the belt, three nautical miles wide,
seaward of the territorial sea baseline), and points located in
internal waters (those waters landward of the territorial sea
baseline, in cases where the baseline and the coastline differ.)

     Section 883 was recently amended by the Act of June 7, 1988
(Public Law 100-329; 102 Stat. 588) to expand the definition of
coastwise trade to include activities that had previously not
been considered coastwise trade.  Under the new provision, the
section 883 prohibition against the transportation of
merchandise:

          ...applies to the transportation of valueless
          material or any dredged material regardless
          of whether it has commercial value, from a
          point or place in the United States or a
          point or place on the high seas within the
          Exclusive Economic Zone...to another point
          or place in the United States or a point or
          place on the high seas within that Exclusive
          Economic Zone...

     Therefore, the use of a United States-built, foreign-flag
dredge to engage solely in the act of dredging would not be
considered coastwise trade for purposes of 46 U.S.C. provided
that the dredge is not used to transport the dredged material, or
any other merchandise, between coastwise points.

       Accordingly, if the ARL-10 will be used solely for
dredging, it need not alter its registry.  If, however, the ARL-
10 will be used to transport sand from a fixed point in San
                              - 3 -


Francisco Bay to the shoreline, its documentation must permit
the barge to be used in coastwise trade.  Questions regarding
vessel documentation should be addressed to:

          Mr. Thomas Willis
          Chief, Vessel Documentation
          U.S. Coast Guard (GMVI-6/13)
          2100 Second Street
          Room 1312
          Washington, D.C. 20593-0001

HOLDING:

     A United States-built dredge documented under a foreign flag
may engage in dredging operations in the United States provided
that it does not transport the dredged material between coastwise
points.

                                Sincerely,




                                B. James Fritz
                                Chief
                                Carrier Rulings Branch