HQ 110954: Coastwise; Pleasure; Documentation; Passengers; LIMITLESS; 46 U.S.C. App. 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 110954

                         August 29, 1990


VES-3-02  CO:R:P:C  110954  JBW

CATEGORY:  Carriers

Ms. Gayle Johns
Vessel Documentation Services
291 W. 22nd Street, Suite 206
San Pedro, California  20229

RE:  Coastwise; Pleasure; Documentation; Passengers; LIMITLESS;
     46 U.S.C. App. 289; 19 C.F.R. 4.80.

Dear Ms. Johns:

          This letter is in response to your letter of March 26,
1990, in which you request information on the carriage of
passengers for hire by a vessel documented as a pleasure vessel.

          Section 177.2(b)(2)(iv) of the Customs Regulations sets
forth the information that must be submitted to obtain a binding
ruling from the Customs Service on the use of a vessel in the
coastwise trade.  This section states:

          If the transaction involves a vessel, the request
          for a ruling should include information relating
          to the place of build and nationality of
          registration and, if to be used in waters under
          the jurisdiction of the U.S., the exact place or
          places of intended use, if known.  If the request
          for a ruling involves a determination as to
          whether or not the primary object of a
          contemplated voyage would be considered to be
          coastwise transportation in violation of 46 U.S.C.
          [App.] 289 (see 4.80a of this chapter), the
          request should completely identify the voyage,
          including the proposed time of arrival at and
          departure from every port on the itinerary and any
          coordination of the voyage with special events at
          coastwise ports, and should be accompanied by
          samples, if available, of brochures, advertising,
          and other information that may be relevant to a
          determination of the primary object of the
          proposed voyage.

          In your letter, you make general inquiries regarding
the carriage of passengers by vessels operating with  pleasure
documentation.  We assume for purposes of this analysis that by
pleasure documentation, you mean a recreational endorsement.  You
also make inquiries regarding the vessel LIMITLESS, a United
States-built vessel that cannot obtain a coastwise endorsement
because the chain of title cannot be traced.  Your inquiry does
not meet the informational requirements of the regulations; we
are consequently unable to issue a binding ruling.  We can,
however, provide you with general information regarding your
request.

          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. 1990), 46 U.S.C. App.
289, and 19 C.F.R. 4.80(a) (1989).  Even vessels that may not
be documented by the United States Coast Guard because they
measure less than five net tons must otherwise qualify to engage
in the coastwise trade--that is, they must be United States-built
and owned.  19 C.F.R. 4.80(a)(2).  Vessels that have acquired
the right to engage in coastwise trade by virtue of the fact that
they were built in the United States lose such right if sold or
transferred to foreign persons or entities or if placed under
foreign registries.  19 C.F.R. 4.80(e).  These laws and
regulations apply regardless of the number passengers
transported.  Headquarters Ruling Letter 109509, dated August 3,
1988.

          The vessel LIMITLESS is currently operating under a
recreational endorsement, for it may not qualify for a coastwise
endorsement because of an incomplete chain of title.  The
Customs Service has consistently held that when a vessel is
chartered under a bona fide bareboat charter, the bareboat
charterer is treated as the owner of the vessel for the period of
the charter, and, because the owners are not considered
"passengers" for purposes of the coastwise laws, 19 C.F.R.
4.50(b) (1989), the charterer is not proscribed by the coastwise
laws from using the vessel during the charter for pleasure
purposes only.  Headquarters Ruling Letter 109638, dated July 22,
1988.  A non-coastwise qualified vessel chartered under a charter
arrangement other than a bareboat charter (e.g., a time or voyage
charter) and used in coastwise transportation would be subject to
penalties under the coastwise laws.  Id.  A vessel chartered
under a bareboat charter would also be subject to penalties if
the bareboat charterer used it in the coastwise trade (e.g., to
transport persons other than bona fide guests between coastwise
points or entirely within territorial waters).  Id.

          We hope this information will be of assistance to you.
Upon receipt of the required information, we shall gladly issue a
binding ruling.


                              Sincerely,



                              B. James Fritz
                              Chief
                              Carrier Rulings Branch