US Customs issues cable-lay guidance for offshore wind

The guidance is the first offshore wind guidance issued by CBP since 2011. Earlier guidance issued on 15 July 2020 was withdrawn on 3 August.

The Jones Act is the popular term for legislation that restricts certain activities in US waters to qualified US-flag vessels. Section 27 of the Merchant Marine Act 1920 in particular, restricts the transportation of ‘merchandise’ between two points in the US to qualified US-flag vessels owned and operated by US citizens.

Winston & Strawn maritime practice partner and chair Charlie Papavizas said the request for guidance relates to the Block Island windfarm, which is in Rhode Island state waters, that is, within three nautical miles of Rhode Island’s coast including Block Island.

CBP refers to ‘state waters’ as ‘US territorial waters.’ Everywhere within such territorial waters is a ‘point in the US’ for purposes of the Jones Act. Beyond three nautical miles to the extent of the US outer continental shelf, the application of the Jones Act relies on the Outer Continental Shelf Lands Act or OCSLA which contains a purpose limitation.

“CBP has not addressed whether that purpose limitation, which is focused on oil and gas activity, encompasses offshore renewable activities and, at least to date, CBP has not issued any recent rulings relating to offshore wind projects outside territorial waters,” Mr Papavizas explained.

“In fact, the reason the 15 July guidance was withdrawn was that CBP had incorrectly understood that the activities encompassed by the request were within US territorial waters.

“The 31 August ruling confirmed that laying of cable by a foreign vessel in US territorial waters is permissible – which is a long-standing interpretation – and that cable recovered from the seabed within US territorial waters by a foreign vessel cannot be discharged in a US port,” he explained.

“The recent ruling also confirmed long-standing interpretations that a cable burial device that employs only pressurised waterjets to fluidise the seabed does not constitute ‘dredging,’ so a foreign vessel can use such a device in US territorial waters. CBP was apparently not presented with the issue of devices which employ waterjets and cutters.

“Finally, the request indicates that the foreign cable-lay vessel will pick up technicians and other personnel in a US port and later return them to the same port.

“CBP, consistent with long-standing precedent, indicated that such transportation would be considered a Jones Act violation because the vessel would not leave US territorial waters – which is a necessary element to fall under the ‘voyage to nowhere’ exception.

“However, CBP also determined that such persons were not ‘passengers’ in that their work on board a vessel was necessary for its operation, so a foreign cable lay vessel could transport the personnel as proposed.”