HQ 110382: M/V PUMPKIN

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 110382

                         August 30, 1989


VES-3-CO:R:P:C 110382 GV

CATEGORY:  Carriers

Mr. John R. Bogert
President
Alaska Apollo Gold Mines Limited
Post Office Box 10438
Phoenix, Arizona 85064

RE: M/V PUMPKIN

Dear Mr. Bogert:

     This is in response to your letter of July 17, 1989,
requesting a ruling as to whether your company vessel, the M/V
PUMPKIN, is considered to be engaged in the coastwise trade.

     FACTS:

     The M/V PUMPKIN is a U.S.-built vessel owned by Alaska
Apollo Gold Mines Limited ("AAGML"), a company incorporated in
the State of Nevada.  The subject vessel is used exclusively by
designated, trained employees of AAGML to carry company supplies
(mostly diesel fuel) from the town of Sand Point, Alaska, on
Papof Island, to mining property of AAGML on adjacent Unga
Island, Alaska, a distance of approximately 15 miles each way.
The only passengers and merchandise carried on the subject vessel
are the aforementioned company employees and supplies.  The
subject vessel is never rented, chartered or leased for any
monetary, or other consideration of any kind.  It is engaged in
the operation described above only from March through September
of each year. During the winter months the M/V PUMPKIN is beached
above the high tide line in Baralof Harbor and mothballed.  There
are no liens or mortgages on the vessel.

ISSUE:

     Whether the transportation of a U.S. corporation's employees
and cargo between United States points on a U.S.-built vessel
owned by said company constitutes an engagement in the coastwise
trade within the meaning of 46 U.S.C. App. 289 and/or 883.
                                2

LAW AND ANALYSIS;

     The Customs Service enforces various navigation laws, some
of which deal with the coastwise trade. Title 46, United States
Code Appendix, section 883 (46 U.S.C. App. 883), often called the
Jones Act, provides, in part, that no merchandise shall be
transported between points in the United States embraced within
the coastwise laws, either directly or via a foreign port, or for
any part of the transportation, in any vessel other than a vessel
built in and documented under the laws of the United States and
owned by persons who are citizens of the United States (i.e., a
coastwise-qualified vessel).  Pursuant to 19 U.S.C. 1401(c), the
word "merchandise" means goods, wares and chattels of every
description and includes merchandise, the importation of which is
prohibited.  Furthermore, Public Law 100-329 (102 Stat. 588)
amended section 883 to apply to the transportation of "valueless
material...".  It should be noted that Customs has never held
that cargo which is owned by the owner of a vessel and is
transported solely for the use of the owner is not "merchandise"
for purposes of section 883. Indeed, we have held that "[i]t is
immaterial [for purposes of section 883] that any cargo so
transported [i.e., transported between coastwise points] may be
owned by the vessel owner."  This position is consistent with the
intent of the Congress as shown in its enactment of the so-called
sixth proviso to section 883 (the Acts of September 21, 1965, and
August 11, 1968; Public Law 89-194, 79 Stat. 823 and Public Law
90-474, 82 Stat. 700, respectively).

     Section 289 of title 46 (46 U.S.C. App. 289), as interpreted
by the Customs Service, prohibits the transportation of
passengers between points in the United States embraced within
the coastwise laws, either directly or by way of a foreign port,
in a non-coastwise-qualified vessel (see above).  For purposes of
section 289, "passenger" is defined as "... any person carried on
a vessel who is not connected with the operation of such vessel,
her navigation, ownership, or business" (19 CFR 4.50(b)).

     Accordingly, while the M/V PUMPKIN may or may not be
considered to be transporting passengers within the meaning of
section 289, it would be considered to be transporting
merchandise within the meaning of section 883.

     It should be noted, however, that although this
transportation constitutes an engagement in the coastwise trade,
it would appear that the subject vessel could be documented to
engage in such trade based on the record submitted (i.e., it
appears to be U.S.-built and owned).  However, the U.S. Coast
Guard, not Customs, is responsible for the administration of
vessel documentation requirements and we defer to that agency
regarding that matter.
                                3

HOLDING:

     The transportation of a U.S. corporation's cargo between
United States points on a U.S.-built vessel owned by said company
constitutes an engagement in the coastwise trade within the
meaning of 46 U.S.C. App. 883.

                              Sincerely,




                              B. James Fritz
                              Chief,
                              Carrier Rulings Branch