HQ 109583: Applicability of the coastwise laws to proposed passenger and cargo vessel movements between Guam and points in the Commonwealth of the Northern Mariana Islands

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 109583

                                     July 7, 1988

            VES-3-02 CO:R:P:C 109583 LLB

            CATEGORY: Carriers

            Mr. John T. K. Sun
            Foremost Maritime Corporation
            50 Broad Street
            New York, New York  10004

            RE:  Applicability of the coastwise laws to proposed passenger
                 and cargo vessel movements between Guam and points in the
                 Commonwealth of the Northern Mariana Islands

            Dear Mr. Sun:

                 Reference is made to your letter of June 22, 1988, in
            which you request that we rule upon a proposed foreign-flag
            regular passenger/cargo operation plying the waters between
            Guam and the islands of Rota and Saipan in the Commonwealth of
            the Northern Mariana Islands (CNMI).  Your letter indicates you
            are inquiring as to any potential prohibitions imposed upon
            your proposal by the coastwise laws of the United States.

            FACTS:

                 Your client proposes to start regular vessel service
            carrying cargoes and/or passengers between Guam, Rota, and
            Saipan.

            ISSUE:

                 Whether the coastwise passenger or merchandise statutes
            apply to vessel itineraries involving transportation between
            Guam and points in the Northern Mariana Islands.

            LAW AND ANALYSIS:

                 Generally speaking, the coastwise laws (46 U.S.C. App. 289
            and 883, and 46 U.S.C. 12106 and 12110) prohibit the
            transportation of passengers and merchandise between points in
            the United States embraced within the coastwise laws in any
            vessel other than a vessel built in, documented under the laws
            of, and owned by citizens of the United States.  Pursuant to 46
            U.S.C. App. 877, the coastwise laws are made applicable to
            Guam.















                                       - 2 -


                 In interpreting the coastwise laws as applied to the
            transportation of passengers, the Customs Service has ruled
            that the carriage of passengers entirely within territorial
            waters, even though the passengers disembark at their point of
            embarkation and the vessel touches no other point, is
            considered coastwise trade subject to the coastwise laws.  The
            transportation of passengers to the high seas or foreign
            locations and back to the point of embarkation, assuming the
            passengers do not go ashore, even temporarily, at another
            United States point, is not considered coastwise trade.  The
            territorial waters of the United States consist of the
            territorial sea, defined as the belt, 3 nautical miles wide,
            adjacent to the coast of the United States and seaward of the
            territorial sea baseline.  This definition also applies to the
            waters adjacent to Guam.

                 We do not know whether you are familiar with the terms of
            Article V of the Covenant to Establish a Commonwealth of the
            Northern Mariana Islands in Political Union with the United
            States of America (Pub. L. 94-241, March 4, 1976, 90 Stat. 263,
            at note following 48 U.S.C. 1681) (Covenant).  Section 503 (b)
            of the Covenant provides, through section 502 (b), that the
            coastwise laws of the U.S. are applicable in the Northern
            Mariana Islands only to the activities of the U.S. Government
            and its contractors.  Customs Service interpretations have been
            consistent with the language of the Covenant.  (Ruling letter
            106982, dated November 15, 1984).  We note that section 101 of
            Article 1 of the Covenant provides that upon termination of the
            Trusteeship Agreement, the Northern Marianas will become a
            self-governing commonwealth, in political union with and under
            the sovereignty of the United States.  We interpret sections
            502 and 503 of Article V of the Covenant to state that upon
            termination of the Trusteeship Agreement, the Congress will
            have to enact specific legislation to extend applicability of
            the coastwise laws to the Northern Marianas.  By proclamation
            5564, appearing in the Federal Register of November 7, 1986 (51
            FR 216), the President declared that as of November 3, 1986,
            the political status of the Northern Mariana Islands has
            changed and that residents there now enjoy U.S. Citizenship.
            We are not aware of any specific Congressional action regarding
            the coastwise laws.




















                                       - 3 -


            HOLDING:

                 Accordingly, since Guam is the only coastwise point
            involved in your proposed itinerary, Saipan and Rota, being a
            part of the CNMI and not subject to the coastwise laws, you may
            engage the services of a foreign-flag vessel to provide
            passenger and cargo service between Guam, Saipan, and Rota
            without violating the coastwise laws of the United States.

                                              Sincerely,




                                              B. James Fritz
                                              Chief
                                              Carrier Rulings Branch