HQ 112874: Coastwise trade; Great Lakes Trade; Foreign-built vessel; In trade with Canada; 46 U.S.C. 12107; 46 U.S.C. App. 289

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.

                        September 14, 1993


                            HQ 112874

VES-3-CO:R:IT:C

112874 LLB

CATEGORY: Carriers

Mr. Roderick Hedley
President, Hedley Boat Company
Olcott, New York 14126

RE:  Coastwise trade; Great Lakes Trade; Foreign-built vessel; In
     trade with Canada; 46 U.S.C. 12107; 46 U.S.C. App. 289

Dear Mr. Hedley:

     Reference is made to your letter received via facsimile
transmission at 11:00 p.m. on September 9, 1993, in which you
request that this office make a determination as to whether
certain proposed activities to be accomplished by use of a
Russian hovercraft, the IRBIS, are permissible under United
States law.

FACTS:

     It is proposed that the Russian-made hovercraft IRBIS be
placed in passenger transportation service on Lake Ontario.  The
letter requesting advice states that the transportation at issue
would begin at Olcott, New York.  The vessel would proceed to a
port in Canada, most likely either Toronto or Oshawa.  A question
is posed as to whether the United States port of return must be
the same port from which the vessel departed the United States. 
It is not clear from the facts as presented whether passengers
embarked in the United States would disembark (end their voyage)
in Canada, with new passengers boarding in Canada for the return
voyage, or whether the same passengers would be returned to the
United States.  

ISSUE:

     What are the permissible uses under 46 U.S.C. App. 289 of a
foreign-flag passenger vessel on the Great Lakes, when the
proposed itinerary involves ports in the United States as well as
ports in Canada.





                                2 


LAW AND ANALYSIS:

     The Act of June 19, 1886, as amended (24 Stat. 81; 46 U.S.C.
App.  289, sometimes called 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 and landed. 

     For your general information, we have consistently
interpreted this prohibition to apply to all vessels except
United States-built, owned, and properly documented vessels (see
46 U.S.C.  12106, 12110, 46 U.S.C. App.  883, and 19 C.F.R.  
4.80). 
 
     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. 
However, the transportation of passengers to the high seas 
or foreign 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.  The territorial
waters of the United States consist of the territorial sea,
defined as the belt, three nautical miles wide, adjacent to 
the coast of the United States and seaward of the territorial 
sea baseline.

     The first of these positions, regarding transportation 
of passengers entirely within territorial waters on a voyage 
in which they embark and disembark at the same coastwise point 
is based on a 1900 decision (Treasury Decision 22275).  Our
rulings have consistently followed this position.

     The second of these positions, regarding transportation 
of passengers from a point in the United States to the high 
seas or foreign waters and back to the same point, is based 
on a 1912 opinion of the Attorney General of the United States
(29 Opinions of the Attorney General 318).  We have consistently
followed this position as well.  









     The three-mile territorial sea limit is useful in defining
the boundary between the territorial waters of the United States
and the high seas.  This limitation bears no relevance to
circumstances in which the waters of the United States and those
of a foreign nation are contiguous.  This is true regardless of
whether the point of contiguity is greater or lesser that three
miles.  In fact, Customs ruled in another case concerning
passenger transportation on the Great Lakes, that since the
international boundary was some 150 miles from the point of
embarkation a voyage to nowhere would require a 300-mile round-trip (Customs Ruling 109815, December 5, 1988).

     It is essential in order to comply with the law, that no
passengers embarked in Olcott, New York, end the voyage at any
other port or place in the United States.  It is permissible for
passengers to begin a voyage in Olcott which ends in Canada, or
to begin in Olcott and end there after having visited Canada or
at least entered Canadian waters.  It is not permissible,
however, to begin a voyage in Olcott and end it elsewhere in the
United States, even if during the voyage the vessel proceeds to a
port in Canada or into Canadian waters.  

HOLDING:

     Passengers may not be transported between points or places
in the United States in a foreign-flag vessel, even though during
the course of a voyage the vessel enters Canadian waters or a
port in Canada.  Passengers may, however, be embarked and
disembarked at the same United States port by a foreign-flag
vessel so long as that vessel leaves the territorial waters of
the United States during the voyage.

                                  Sincerely,




                                  Arthur P. Schifflin
                                  Chief
                                  Carrier Rulings Branch