HQ 109815: Applicability of the coastwise laws to the use of a non- coastwise-qualified submersible vessel in Lake Superior for dual use in research/exploration and passenger touring

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 109815

                                   December 5, 1988

            VES-3-02/14 CO:R:P:C 109815 LLB

            CATEGORY: Carriers

            Dr. Steven D. Audette
            President, Lake Quest, Inc.
            438 North 57th Avenue West
            Duluth, Minnesota 55807

            RE:  Applicability of the coastwise laws to the use of a non-
                 coastwise-qualified submersible vessel in Lake Superior
                 for dual use in research/exploration and passenger touring

            Dear Dr. Audette:

                 Reference is made to your letter of October 12, 1988, in
            which you request a ruling on the proposed use of a submersible
            vessel for passenger tours and research activities on Lake
            Superior.

            FACTS:

                 A Canadian concern currently owns a three-man, U.S.-built
            submersible vessel known as the SEA OTTER.  It is proposed that
            a U.S. Corporation operate the vessel out of Duluth, Minnesota,
            in the dual role of research/exploration vessel to be made
            available to scientists, and submarine excursion vessel for
            tourists.

            ISSUE:

                 Whether a non-coastwise-qualified vessel may engage in
            research and/or passenger for hire operations in Lake Superior
            while operating out of a U.S. port.

            LAW AND ANALYSIS:

                 Generally, the coastwise laws 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, documented under the laws of, and owned
            by citizens of the United States.  The passenger coastwise law,
            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











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                      a foreign port, under penalty of $200 for
                      each passenger so transported and landed.

                 Pursuant to 46 U.S.C. 12106 and 12110 and their
            predecessors (46 U.S.C. 65i and 65m and, before them, 46 U.S.C.
            11) and consistent with 46 U.S.C. 883, the coastwise
            merchandise law, the Customs Service has consistently held that
            the prohibition in 46 U.S.C. 289 applies to all non-coastwise-
            qualified vessels.  Non-coastwise-qualified vessels include any
            vessel other than a vessel built in, properly documented under
            the laws of, owned by citizens of the United States, and never
            sold foreign with certain exceptions (46 U.S.C. 12106(a)(2)(B)
            and 19 CFR 4.80(a)(2) and (3)).

                 In its interpretation of section 289, 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
            coastwise point, is considered coastwise trade subject to the
            coastwise laws.  Transportation of passengers from a point in
            the United States to the high seas or foreign waters and back
            to the point of original embarkation, often called a "voyage to
            nowhere," is not considered coastwise trade.  In this case,
            however, a "voyage to nowhere" would entail a round-trip of
            approximately 300 miles.  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."  (Section 4.50(b),
            Customs Regulations.)

                 The Customs Service has long held that the use of a vessel
            solely to engage in research is not a use in the coastwise
            trade.  Accordingly, the use of non-coastwise-qualified vessels
            to engage in research, including the transportation of persons
            participating in the research from, to, and between research
            sites in United States territorial waters, whether or not the
            persons participating in the research temporarily leave the
            vessel at the research sites, and back, would not violate the
            coastwise laws.  However, if the foregoing activities include
            the transportation between coastwise points of any persons
            other than the vessel crew and scientists and students engaged
            in the research or of any merchandise other than the usual
            supplies and equipment necessary for that research, the
            coastwise laws would be violated.

            HOLDING:

                 A non-coastwise-qualified vessel may not transport
            passengers on a voyage wholly within U.S. waters, even though












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            the passengers embark and disembark at the same coastwise
            point.  Such a vessel may, however, engage in bona fide
            research activities as outlined above without violating the
            coastwise laws.

                                         Sincerely,



                                         B. James Fritz
                                         Chief
                                         Carrier Rulings Branch