HQ 112434: 46 U.S.C. App. 289; 46 U.S.C. App. 883; Coastwise Trade; Passengers; Foreign-Built Vessel; Sailing School; NYAMBA

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 112434                  

                       September 11, 1992

VES-3-02/07 CO:R:IT:C 112434 MLR

CATEGORY:  Carriers

James M. Burwick
Box 195
Teton Village, Wyoming  83025

RE:  46 U.S.C. App. 289; 46 U.S.C. App. 883; Coastwise Trade;
     Passengers; Foreign-Built Vessel; Sailing School; NYAMBA

Dear Mr. Burwick:

     This is in reference to your letter of August 24, 1992,
concerning the use of your vessel as a sailing school.

FACTS:

     In your letter, you state that you intend to use the NYAMBA,
an Australian-built sailing vessel, U.S. Doc. #665236, as a
sailing school at Fernandina Beach, Florida.  You plan to have
six students.

ISSUE:

     Whether the use of a non-coastwise-qualified vessel as a
sailing school would be in violation of the coastwise laws, 46
U.S.C. App. 289, and 46 U.S.C. App. 883.

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.

     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 penalty of $200 for
          each passenger so transported and landed.
     In interpreting the coastwise laws, Customs has ruled that a
point in United States territorial waters is considered a point
embraced within the coastwise laws.  The coastwise laws generally
apply to points in the territorial sea, defined as the belt,
three (3) 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.  Therefore, in its administration of 46 U.S.C.
App. 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 coastwise laws.  

     However, the transportation of passengers to the high seas
(i.e., beyond U.S. territorial waters) and back to the point of
embarkation, assuming the passengers do not go ashore, even
temporarily, at another United States point, often called a
"voyage to nowhere", is not considered coastwise trade.  It
should be noted that the carriage of fishing parties for hire,
even if the vessel proceeds beyond territorial waters and returns
to the point of the passenger's embarkation, is 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."  19 CFR 4.50(b).  Section 4.80a, Customs
Regulations (19 CFR 4.80a) is interpretive of section 289.

     Given the foregoing definition of "passenger", the Customs
Service has held that a person being trained or receiving
instruction in the handling or navigation of a vessel, and whose
presence on board the vessel is necessarily required in order to
receive such training or instruction, is not a "passenger" within
the meaning of the coastwise laws.  Accordingly, if the vessel is
used only for such training it would not be required to have a
license to engage in the coastwise trade.  Customs Rulings
109850, dated December 27, 1988; and 109287, dated February 24,
1988.

     Therefore, the sole use of a non-coastwise-qualified sailing
vessel in connection with a bona fide instructional course in
sailing and navigation does not constitute coastwise trade within
the meaning of 46 U.S.C. App. 289.  Legitimate equipment and
stores of the sailing school vessel for its use, including
groceries purchased by the students are not considered
merchandise covered by section 883.  However, articles
transported on the vessel between points embraced within the
coastwise laws which are not legitimate stores and equipment of
the vessel are subject to the restrictions placed on the
transportation of merchandise under 46 U.S.C. App. 883.

     Further, all persons being carried in the vessel must be
involved with the operation, navigation, or business of the
vessel.  A person who is carried on board a vessel for
recreational purposes and who pays a fee for such carriage would
be considered a "passenger" and his carriage between places in
the United States or entirely within U.S. waters would be in
violation of the coastwise laws.

HOLDING:

     The use of a non-coastwise-qualified vessel as a sailing
school is not in violation of the coastwise laws, 46 U.S.C. App.
289, and 46 U.S.C. App. 883.

     This letter addresses only those federal requirements that
are administered by the United States Customs Service.  While we
are unaware of any federal or state agency requirements that
might pertain to the undertaking you describe, it is possible
that such requirements exist.

                                     Sincerely,




                                     B. James Fritz
                                     Chief