U.S. Customs Clarifies Jones Act Rules for Offshore Platform Decommissioning

U.S. Customs and Border Protection (CBP) has issued a significant ruling establishing that offshore platforms remain coastwise points under the Jones Act even after their associated wells are permanently abandoned – clarifying a previously unsettled area of law with major implications for decommissioning operations.

Background

On May 1, 2026, CBP issued Ruling HQ H349684 in response to a ruling request regarding the use of foreign-flagged vessels in connection with the decommissioning and removal of an offshore platform on the Outer Continental Shelf (OCS). The ruling addresses fundamental questions about when an offshore installation ceases to be a "coastwise point" subject to the Jones Act and other coastwise laws.

The requester contemplated use of foreign-flag barges to transport removed topside modules to a U.S. port for recycling, foreign-flagged tugs to tow the floating hull to a reef site on the OCS under the Rigs-to-Reef program, and a foreign-flagged vessel to retrieve and transport the disconnected mooring system to a U.S. onshore facility.

What CBP Held

CBP issued a ruling with three key holdings:

• Holding 1 – Wells. If the permanent abandonment and plugging of the well meets the relevant U.S. Department of the Interior's Bureau of Safety and Environmental Enforcement (BSEE) regulation standards, the well would no longer be considered a coastwise point. This holding is consistent with longstanding CBP precedent.
• Holding 2 – Platform. The platform remains a coastwise point after the well is plugged and abandoned. Therefore, transportation of passengers or merchandise between the platform (for the removal of the topside modules, mooring system and anchors) to a different U.S. coastwise point for disposal would violate 46 U.S.C. § 55102 and 19 C.F.R. § 4.80. Also, towage of a barge to transport the removed topside components ashore for recycling would require the use of coastwise-qualified tugs in compliance with 46 U.S.C. § 55111.
• Holding 3 – Towing to Reef Site. Towing of the hull to a pristine seabed site on the OCS beyond U.S. territorial waters using a foreign-flag vessel would not violate the coastwise laws. CBP affirmed that the Outer Continental Shelf Lands Act (OCSLA) jurisdiction does not reach activity occurring on the pristine seabed of the OCS where there is no installation or device attached to the seabed.

Precedential Significance

This ruling establishes important new precedent by explicitly addressing, for the first time, when in the decommissioning process an offshore platform ceases to be a coastwise point. CBP stated that even though a platform is not producing presently (because the well it is associated with is not producing), the platform is still attached to the seabed and is still considered a coastwise point until the complete terminus of its production.

CBP applied a "complete terminus of production" standard: As with the removal (indeed, destruction) of the well, the platform will not reach the terminus of its production until it is removed. CBP stated it would only consider a geographic area not to be a coastwise point when the well is permanently removed, and the platform associated with it is permanently removed. Accordingly, the platform remains a coastwise point until it is completely removed, at which time – assuming nothing remains at the site other than the permanently plugged well and any other decommissioned fixtures that remain in accordance with BSEE regulations – CBP would consider the location to have returned to pristine seabed status and no longer be a coastwise point.

This ruling fills an interpretive gap in prior CBP rulings. Previously, though CBP had consistently held that plugged and abandoned wells lose coastwise point status, it had never definitively addressed the precise point in the dismantling process that a platform loses such status.

Distinction from CROSS Rulings on Wrecked Platforms

Importantly, this ruling does not disturb the established line of CBP Customs Rulings Online Search System (CROSS) rulings addressing platforms destroyed or severely damaged by hurricanes and other catastrophic events. In those relevant rulings, CBP has generally determined that wrecked platforms overthrown and lying on the OCS seabed were no longer coastwise points because they could not "legally be perceived as hereafter being affixed to the seabed for exploration, development, or production purposes, as required by the OCSLA."

The key distinction lies in the nature of the platforms: Hurricane-wrecked platforms have been physically destroyed – with piles no longer serving any useful purpose and debris strewn along the ocean floor – whereas a decommissioned but intact platform remains structurally attached to the seabed via its mooring system or other attachments. The distinction is narrow, but CBP's ruling makes clear that the functional and legal incapacity to produce resources does not, by itself, sever the platform's status as a coastwise point. Rather, physical removal or destruction is the operative trigger.

Conclusion

CBP Ruling HQ H349684 provides long-awaited clarity on a previously unsettled question: When does an offshore platform lose its status as a coastwise point during decommissioning? The answer is clear – essentially, not until it is completely removed. Though wells may lose coastwise point status upon permanent abandonment, the platform itself remains a coastwise point as long as it remains attached to the seabed. This ruling establishes a "complete terminus" standard that will guide offshore operators in planning their decommissioning activities and ensuring compliance with the coastwise laws.

For more information on this ruling or Jones Act compliance in offshore operations, please contact the author.