HQ 111621: Coastwise trade; Passengers; Voyage to nowhere; Use of Yacht foreign territorial waters; 46 U.S.C. App. 289

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 111621

                        September 5, 1991


VES-3-CO:R:IT:C  111621 LLB

CATEGORY:  Carriers

Mr. C. Lance Ericson
19345 US 19th North #402
Clearwater, Florida 34624

RE:  Coastwise trade; Passengers; Voyage to nowhere; Use of Yacht
     foreign territorial waters; 46 U.S.C. App. 289

Dear Mr. Ericson:

     Reference is made to your letter of April 2, 1991, in which
you request that we answer several questions that you pose
regarding the proposed use of your American-flag pleasure vessel.

FACTS:

     The vessel in question is documented for pleasure under the
laws of the United States.  Although built in this country, the
vessel was for a period of time under foreign ownership, thus
imposing a lifetime restriction on the qualification of the
vessel to be documented for the coastwise trade.

     Three potential itineraries are posed, and we are asked to
rule upon their legality under United States law.  The proposed
uses are as follows:

1.  The vessel would operate for hire between foreign ports only.
No United States points would be involved.

2.  The vessel would operate for hire entirely within the
territorial waters of a foreign nation.  No United States points
would be involved.

3.  The vessel would operate for hire on cruises leaving a dock
in the harbor of San Juan, Puerto Rico, sailing "around the bay",
and returning to the same dock to discharge the passengers.

In all cases you ask whether the captain needs a United States
license, and whether the vessel will be operating in violation of
any United States laws.

ISSUE:

     Whether a documented pleasure vessel may operate for hire in
foreign territorial or international waters, and in operations
out of and back into a single coastwise point.

LAW AND ANALYSIS:

     The Act of June 19, 1886, as amended (24 Stat. 81; 46
U.S.C. App.  289, sometimes called the coastwise passenger
law), provides that:

          No foreign vessel shall transport passengers
          between ports or places in the United States
          either directly or by way of a foreign port,
          under a penalty of $200 for each passenger so
          transported and landed.

     For your general information, we have consistently
interpreted this prohibition to apply to all vessels except
United States-built, owned, and properly documented vessels (see
46 U.S.C.  12106, 12110, 46 U.S.C. App.  883, and 19 C.F.R.
4.80).

     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.
However, the transportation of passengers to the high seas
or foreign waters and back to the point of embarkation,
assuming the passengers do not go ashore, even temporarily,
at another United States point, often called a "voyage to
nowhere," is not considered coastwise trade.  The territorial
waters of the United States consist of the territorial sea,
defined as the belt, three nautical miles wide, adjacent to
the coast of the United States and seaward of the territorial
sea baseline.

     The first of these positions, regarding transportation
of passengers entirely within territorial waters on a voyage
in which they embark and disembark at the same coastwise point
is based on a 1900 decision (Treasury Decision 22275).  Our
rulings have consistently followed this position.

     The second of these positions, regarding transportation
of passengers from a point in the United States to the high
seas or foreign waters and back to the same point, is based
on a 1912 opinion of the Attorney General of the United States
(29 Opinions of the Attorney General 318).  We have consistently
followed this position as well.

     On the basis of the foregoing interpretations by the
Customs Service, vessels not qualified to engage in the
coastwise trade may be operated on voyages to nowhere in which
passengers transported from a point in the United States to a
point outside United States territorial waters and back to the
point of the passengers' embarkation, assuming the vessel does
not touch any other coastwise point.  As stated above, this
Customs interpretation is of long-standing duration and is based
on an Opinion of the Attorney General of the United States.  We
are aware of no action by the Congress of the United States
in all of the time this interpretation has existed indicating
that our interpretation is contrary to the intent of the
Congress in enacting the coastwise laws, although Congress has
on various occasions since their enactment heard testimony on
their application.

     You should be aware, however, that voyages of vessels
carrying offshore fishing parties for hire, regardless of
whether trips extend beyond the three mile limit of the
territorial waters, are considered to be predominantly coastwise
in their nature and object.  As such, non-coastwise-qualified
vessels may not legally engage in such voyages. (Treasury
Decision 55193(2)).

     In the context of the current matter, the vessel in question
may operate outside the United States, as proposed, (either
between foreign ports or within the territorial waters of a
foreign nation) without violating the coastwise passenger
transportation statute.

     In regard to the proposal to use the vessel in Puerto Rico,
the legality of that proposed use under section 289 would depend
upon whether passengers are transported from a coastwise point,
are taken outside the territorial waters (to the high seas), and
are returned to the same point from which they departed in order
to be disembarked.  It is not clear from the facts as presented
whether sailing "around the bay" includes proceeding into
international waters.

     This ruling only concerns the legality of the operation of
the vessel in question under 46 U.S.C. App. 289.  The issues
raised concerning citizenship requirements and commercial use of
a documented pleasure vessel are within the purview of the U.S.
Coast Guard.  We cannot presume to rule upon matters within the
jurisdiction of that agency, but our informal opinion is that
section 8103(a) of title 46, United States Code would require
that the master of the vessel be a citizen of the United States.
Further, commercial use of a documented pleasure vessel would
appear to be in violation of section 12110(c) of title 46, United
States Code.  We strongly urge that the U.S. Coast Guard be
consulted on these matters prior to engagement of the vessel in
the proposed itineraries.  Information on these points may best
be obtained by contacting:

                    Chief, Vessel Documentation Branch
                    U.S. Coast Guard (GMVI-6/13)
                    2100 Second Street, S.W. (Rm. 1312)
                    Washington, D.C. 20593-0001
                    (Phone (202) 267-1492)

HOLDING:

     The holding in this ruling addresses only the legality of
the proposed use of a U.S.-documented pleasure vessel under 46
U.S.C. App. 289.  Section 289 will not be violated under the
proposed uses set forth in this ruling, so long as the vessel
proceeds into international waters on trips from and returning to
the same coastwise point when operating out of Puerto Rico or any
other coastwise location.

                                Sincerely,




                                B. James Fritz
                                Chief
                                Carrier Rulings Branch