HQ 112104: Coastwise; Passengers; Floating Hotel; Bareboat Charter; Pleasure Use; 46 U.S.C. 289; 19 C.F.R. 4.80.

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 112104

                           May 6, 1992

VES-3-02/3-04   CO:R:IT:C  112104  JBW

CATEGORY:   Carriers

Mr. Larry W. Larison
566 N. E. Geraldine Drive
Hillsboro, OR 97124

RE:  Coastwise; Passengers; Floating Hotel; Bareboat Charter;
     Pleasure Use; 46 U.S.C. 289; 19 C.F.R. 4.80.

Dear Mr. Larison:

     This letter is in response to your inquiry of February 5,
1992, in which you seek a ruling on the application of the
coastwise laws to the use of a foreign-built, United States-flag
vessel.

FACTS:

     In your letter, you state that you intend to start a fishing
charter service in southeastern Alaska.  You state that you would
like to use a Canadian-built, United States-flag vessel to
provide lodging for your customers.  You state that the lodging
vessel will be anchored and will never be under way while the
customers are on board the vessel.  United States-flag vessels
will take the customers on day-long fishing excursions from the
lodging vessel.  The customers will be transported from shore to
the lodging vessel either by air-taxi or by the fishing boats.

ISSUES:

     (1)  Whether the use of an anchored, foreign-built lodging
boat for overnight lodging of guests is prohibited by 46 U.S.C.
App. 289.

     (2)  Whether vessels must be coastwise-qualified to
transport fishing parties from a lodging vessel anchored in
United States territorial waters.


LAW AND ANALYSIS:

     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.

46 U.S.C. App. 289.  The Customs Service has consistently
interpreted this proscription to apply to any vessel except a
United States built, owned, and properly documented vessel. See
46 U.S.C.A. 12106 & 12110 (West Supp. 1991), 46 U.S.C. App.
289, and 19 C.F.R. 4.80(a) (1991).  The territorial waters of
the United States are defined to include the belt, three nautical
miles wide, seaward of the territorial sea baseline, and to
points located in internal waters, landward of the territorial
sea baseline, in cases where the baseline and the coastline
differ.  Headquarters Ruling Letter 111275, dated November 13,
1990.

     The Customs Service has determined that a vessel not
qualified for the coastwise trade may be used as a hotel without
violating the coastwise statute provided the vessel remains
stationary by mooring or anchoring while the passengers are on
board.  Headquarters Ruling Letter 111423, dated January 9, 1991;
Headquarters Ruling Letter 110542, dated November 21, 1989.  Any
movement by the vessel from its stationary location with
passengers on board would constitute a violation of 46 U.S.C.
App. 289.  From these rules, we determine that the proposed use
of the Canadian-built, United States-flag vessel would not
constitute a violation of the coastwise laws provided that it
remains anchored while the customers are on board.

     In your letter, you do not state whether or not the lodging
vessel will be anchored in United States territorial waters.  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.  E.g., Headquarters Ruling Letter 110990,
dated May 21, 1990.  Alternatively, the transportation of
passengers to the high seas or foreign waters and back to the
precise point of embarkation, often called a "voyage to nowhere,"
is not considered coastwise trade.  Id.  An important corollary
to this rule is that a "voyage to nowhere" assumes the passengers
do not leave the vessel, even temporarily, at another United
States point.  Id.  Furthermore, the carriage of fishing parties
for hire, even if the vessel proceeds beyond territorial waters
and returns to the point of the passengers' embarkation, is
considered coastwise trade.  Headquarters Ruling Letter 111051,
dated August 16, 1990.

     The transportation, therefore, of the customers on the day-
long fishing trips from the lodging vessel anchored in
territorial waters would be considered an engagement in coastwise
trade, and the boats must be coastwise-qualified.  Likewise,
transportation of passengers from shore to the lodging vessel
anchored in territorial waters would be considered an engagement
in coastwise trade.

     This ruling does not address issues within the purview of
other governmental agencies, e.g., the United States Coast Guard
for issues relating to vessel documentation, safety, and
inspection requirements and the Department of Transportation,
regarding use of the air taxi.  If you wish to contact the Coast
Guard about these matters, you may communicate with your local
Coast Guard office or Coast Guard Headquarters at the following
address:

               Thomas Willis
               Chief, Vessel Documentation
               U.S. Coast Guard (GMVI-6/13)
               2100 Second Street, S.W. (Room 1312)
               Washington, D.C. 20593-001

HOLDING:

     (1)  The Customs Service has determined that a vessel not
qualified for the coastwise trade, which is moored or anchored,
may be used as a hotel without violating the coastwise statute,
provided the vessel is not moved from its moored or anchored
position with passengers aboard.

     (2)  The transportation of customers on day-long fishing
trips from a lodging vessel anchored in territorial waters would
be considered an engagement in coastwise trade.  Likewise,
transportation of passengers from shore to the lodging vessel
anchored in territorial waters would be considered an engagement
in coastwise trade.  Any vessel used for such transportation must
be coastwise-qualified.



                              Sincerely,



                              B. James Fritz
                              Chief
                              Carrier Rulings Branch