CBP: SpaceX Vessels Retrieving Equipment on High Seas Are Subject to Entry, Arrival Requirements

In April 2024, CBP's Office of Field Operations told SpaceX that its vessels would be required to report arrival times and make vessel entry. In response, SpaceX asked both Port Canaveral and the Miami field office to seek "internal" advice, because the company said it believed that as it recovers from the Atlantic and Pacific oceans and the Gulf its rocket fairings, boosters and other space-flight hardware items that detach from the rocket after launch, it shouldn't be subject to formal vessel entry requirements, according to the ruling.

CBP analyzed the situation by focusing on two provisions governing vessel entry under 9 U.S.C. § 1433: whether the vessels “delivered or received merchandise or passengers”; and, if so, whether such delivery or receipt occurred “outside the territorial sea.”

CBP looked to define "territorial sea" by relying on definitions within the United Nations Convention on the Territorial Sea. CBP eventually said it recognizes, for the purpose of administering customs laws, "the breadth of the territorial sea as three nautical miles wide adjacent to the U.S. coast and seaward of the territorial sea baseline consistent with 33 C.F.R. § 2.22(a)(2)."

CBP also looked at whether SpaceX's space flight hardware components would be considered "merchandise," defined as "goods, wares, and chattels of every description, and includes merchandise the importation of which is prohibited, and monetary instruments as defined in section 5312 of Title 31," under 19 U.S.C. §§ 1433(a)(1)(D) and 1434(a)(4).

The agency determined that the rocket fairing, booster and another unnamed component "are unquestionably merchandise," noting that SpaceX didn't contest this.

CBP then looked at whether SpaceX "receives" the equipment from the high seas by exploring the definition of "receive," saying that "both the plain language understanding of the term 'receive,' as well as the jurisprudence regarding receipt of cargo aboard vessels, is the element of physical custody and control, not legal ownership." CBP also noted that regulations governing who receives the merchandise don't factor in who owns the merchandise.

In prior related rulings, "CBP has never considered the ownership of merchandise to be relevant in assessing whether a vessel has received merchandise," CBP said. "Accordingly, consistent with the ordinary meaning and with the canons of statutory construction ... the SpaceX vessels receive merchandise when they take aboard the rocket fairings, rocket boosters, [ ] outside the territorial sea."

And since this is occurring "while the vessels are outside the territorial sea, the arrival reporting and formal entry requirements ... apply to SpaceX's vessels -- namely, the droneship, support vessels" and an unnamed component -- "upon their return to a U.S. port."

However, because "the towing vessel that tows the droneship laden with the recovered rocket boosters does not receive merchandise, it is not subject to these requirements," CBP said.