Coastwise trade rules to be reset – but maybe not

On July 17, 2009, the US Customs and Border Protection (CBP) stated in its weekly publication “Customs Bulletin and Decisions” that it had revoked a number of prior rulings regarding the application of the coastwise trade laws to certain merchandise and vessel equipment that are transported between coastwise points (generally between a shoreside port and a drilling unit on the US outer continental shelf). Some of these rulings were quite old. The rulings had consistently allowed vessels that were not eligible to engage in the coastwise trade to carry equipment out to drilling units so long as the vessels engaged in the carrying were also engaged in the installation of the equipment. Following concerns raised by the domestic vessel industry, the CBP revoked its prior rulings and proposed to adopt a new policy significantly narrowing the circumstances in which a non-coastwise-qualified vessel could engage in such activity. The agency received 141 comments on its proposal. Now, CBP has announced that it is withdrawing its earlier notice of modification and revocation of the prior ruling letters. In taking this most recent action, the agency stated: “Based on several substantive comments CBP received, both supporting and opposing the proposed action, and CBP’s further research on the issue, we conclude that CBP’s interpretation of [earlier Treasury Decisions] and its application to the rulings cited within the proposed action should be reconsidered.” A new notice setting forth the agency’s proposed action will be published in the near future.