HQ 112083: Passenger Coastwise Law; 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 112083

                        February 26, 1992


VES 3-02 CO:R:IT:C 112083 MLR

CATEGORY:  Carriers

John F. Weigold
President
Catamaran Lines, Inc.
2008 W. Main Street
Stamford, Connecticut  06902

RE:  Passenger Coastwise Law; 46 U.S.C app. 289

Dear Mr. Weigold:

     This is in reference to your facsimile dated February 17,
1992, concerning the proposed transport of commuters.

FACTS:

     Catamaran Lines, Inc. plans to have two vessels built in the
United States to transport approximately 20,000 commuters daily
from Haverstraw, New York, to the World Trade Center, via the
Hudson River.  According to Catamaran Lines, such a mass transit
system would reduce commuting time, which is currently four hours
per day by bus, and provide employment for numerous tradesmen who
construct the vessels.  While the vessels are being built, and to
prove that the project is viable, Catamaran Lines plans to
temporarily lease two vessels.  The leased vessels were built in
Norway and are documented under the Bahamian flag.

ISSUE:

     Whether the use of a foreign-built, foreign-documented
vessel, intended to transport commuters between Haverstraw, New
York, and the World Trade Center, is prohibited by the coastwise
trade laws.

LAW AND ANALYSIS:

     Generally, the coastwise laws (e.g., 46 U.S.C. app. 289 and
883, and 46 U.S.C. 12106 and 12110) prohibit the transportation
of merchandise or passengers between points in the United States
embraced within the coastwise laws 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).

     The passenger coastwise law, title 46 United States Code
Appendix, section 289 (46 U.S.C. app. 289), 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 penalty of $200 for
          each passenger so transported and landed.

     For purposes of the coastwise laws, a vessel "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).

     The coastwise laws, as well as the other navigation laws
administered by the Customs Service, are applicable to those
vessels engaged in activities in the territorial and navigable
waters of the United States, and the territorial and navigable
waters of its territories and possessions.  The territorial
waters of the United States consist of the belt, 3 nautical miles
wide, adjacent to the coast of the United States and seaward of
the territorial sea baseline.  At the date of this letter, the
recent Presidential Proclamation (dated December 27, 1988),
proclaiming a 12 nautical mile territorial sea, has extended the
jurisdiction of the United States only for international purposes
and has not extended or changed existing federal and state laws.
The term navigable waters, defined in Coast Guard regulations (33
C.F.R. 2.05-25), include the territorial sea of the United
States, the internal waters of the United States subject to tidal
influence, and certain other internal waters that are not subject
to tidal influence.

     In interpreting the coastwise laws as applied to the
transportation of passengers, we have ruled that the carriage of
passengers entirely within territorial waters, even though they
disembark at their point of embarkation and the vessel touches no
other coastwise point, is considered coastwise trade subject to
the coastwise laws.  However, the transportation of passengers to
the high seas (i.e., beyond U.S. territorial waters) or foreign
waters and back to the point of embarkation, often called a
"voyage to nowhere," is not considered coastwise trade, assuming
the passengers do not go ashore, even temporarily, at another
United States point.  Accordingly, the use of a foreign-built,
foreign-documented vessel to transport commuters between two
places in the United States via the Hudson River would violate
the coastwise laws.

     The only statute authorizing the waiver of the coastwise
laws is the Act of December 27, 1950 (64 Stat. 1120; note
preceding 46 U.S.C. app. 1).  Under the authority of this
statute, the Secretary of the Treasury may waive compliance with
the provisions of the navigation laws, including the coastwise
laws, "when he deems that such action is necessary in the
interest of national defense."  If the Secretary of Defense
requires such a waiver in the interest of national defense, the
Secretary of the Treasury is directed by the statute to grant the
waiver.  We naturally recognize that exigent commercial and
other interests may in certain circumstances exist to which the
statutory restriction against the use of non-coastwise-qualified
vessels to transport passengers between coastwise points, poses
an impediment; however, there is no legal basis to set aside the
prohibition of 46 U.S.C. app. 289 in such circumstances.

HOLDING:

     The use of a foreign-built, foreign-documented vessel
intended to temporarily transport commuters between Haverstraw,
New York, and the World Trade Center, via the Hudson River, is
prohibited by the coastwise laws.

                                     Sincerely,




                                     B. James Fritz
                                     Chief
                                     Carrier Rulings Branch