HQ 111289: Coastwise; Passengers; Gondolas; Waiver; Bareboat Charter; 46 U.S.C. App. 289; 19 C.F.R. 4.80(a).

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 111289

                       September 14, 1990


VES-3-02  CO:R:P:C  111289  JBW

CATEGORY:  Carriers

Mr. Thomas J. Cullerton
That's Amore Gondolas
2058 West Rascher
Chicago, Illinois 60625

RE:  Coastwise; Passengers; Gondolas; Waiver; Bareboat Charter;
     46 U.S.C. App. 289; 19 C.F.R. 4.80(a).

Dear Mr. Cullerton:

     Congressman Frank Annunzio has forwarded your letter of
August 22, 1990, to the Customs Service for reply regarding the
use of a foreign-built gondola for the transportation of
passengers on the Chicago River.  Included with your letter was
supporting documentation relating to your proposed activities.

FACTS:

     As stated in your letter, you intend to use a gondola to
transport passengers on the Chicago River.  The gondola was built
in Venice, Italy, and was purchased in and imported from
Toronto, Ontario, Canada.

ISSUE:

     Whether a foreign-built gondola may be used to transport
passengers in United States waters.

LAW AND ANALYSIS:

     The coastwise passenger law (46 U.S.C. App. 289 (1988)
(frequently referred to as the Jones Act)) 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.

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).  The gondola under consideration, being foreign
built, falls under this prohibition.

     The function of the Customs Service is to interpret and
administer this law.  We do not possess the power or authority to
waive application of the coastwise laws unless a statutory
exemption permits us to do so.  The only legislative authority to
waive the coastwise laws appears in Act of December 27, 1950, 64
Stat. 1120 (note preceding Chapter 1 of Title 46 Appendix, United
States Code).  Under this Act, the Customs Service, through
authority delegated by the Secretary of the Treasury, must waive
application of the Jones Act upon the request of the Secretary of
Defense in the interest of national defense and to the extent
required.  Upon his own initiative or upon the written
recommendation of the head of any other United States agency, the
Secretary of Treasury has the discretion to waive application of
the coastwise laws "whenever he deems that such action is
necessary in the interest of national defense."  The Customs
Service makes recommendations to the Assistant Secretary of
Treasury for Enforcement on these waivers.  No national defense
interest appears in the facts as presented, and we are unable to
issue a waiver.

     The Customs Service has also 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 bareboat charter is defined to be one in which the owner
of the vessel completely and exclusively relinquishes
"possession, command, and navigation" to the charterer.  Guzman
v. Pichirilo, 369 U.S. 698, 699-670 (1962).  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.  Again, from the facts presented, the
gondola will not be chartered as a bareboat charter.


HOLDING:

     A foreign-built gondola is prohibited by the coastwise laws
from transporting passengers on the Chicago River.  Absent
national defense considerations, the Customs Service lacks
authority to waive application of the coastwise laws.  Finally,
from the facts presented, the gondola is not being chartered as a
bareboat charter for pleasure use only.


                              Sincerely,



                              B. James Fritz
                              Chief
                              Carrier Rulings Branch