HQ 110226: Use of a non-coastwise-qualified vessel for a diving platform for company-employed divers

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 110226


                          May 12, 1989




VES-3-CO:R:P:C 110226 LLB

CATEGORY: Carriers

Mr. Chuck Morris
Special Projects
Underwater Construction Inc.
8740 Hartzell Road,
Anchorage, Alaska 99507

RE:  Use of a non-coastwise-qualified vessel for a diving
     platform for company-employed divers

Dear Mr. Morris:

     This is in response to your letter of May 8, 1989, in which
you request that we rule upon the proposed use of a Canadian-flag
tug boat for non-tug-related activities rn U.S. territorial
waters.

FACTS:

     The vessel GORDON GILL is described as a small tug boat of
Canadian registry, currently located in Dutch Harbor, Alaska, and
due to be sold via sealed bid on May 15, 1989.  Your American
company proposes to purchase the vessel and put it into service
as a dive platform for its own company-employed divers.  The tow
winch would be removed and the vessel would not be engaged in any
towing operations.

ISSUE:

     Is the transportation of divers employed by the owner of a
non-coastwise-qualified vessel, the transportation of passengers
within the meaning of title 46, United States Code App., section
289,and thus a prohibited activity.

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 a foreign port,
          under a 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. App. 883, the coastwise merchandise
law, the Customs Service has consistently held that the
prohibition in 46 U.S.C. App. 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, and owned by citizens of the United States, with
certain exceptions (see 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.  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)

     Since those persons transported aboard the vessel will be
employees of the owner and will be engaged in diving operations
on behalf of the owner, we are of the opinion that they are
directly connected with operation, ownership, or business of the
vessel and not, therefore, passengers within the contemplation of
the statute or implementing regulations.

HOLDING:

     Company-employed divers transported aboard the company
vessel in furtherance of the business of the vessel (a diving
platform) are not passengers within the meaning of section
4.50(b), Customs Regulations.  Accordingly, their transportation
to and from dive sites, even though wholly within territorial
waters, is not violative of 46 U.S.C. App. 289.

                              Sincerely,



                              B. James Fritz
                              Chief
                              Carrier Rulings Branch