HQ 113105: Coastwise Trade; Cruise Itineraries; 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.

                            HQ 113105

                          June 2, 1994

VES-3/5-CO:R:IT:C 113105 GEV

CATEGORY:  Carriers

John Hein
Chief Financial Officer
Yachtship Cruiseline, Inc.
520 Pike Street, Suite 1610
Seattle, Washington 98101

RE:  Coastwise Trade; Cruise Itineraries; 46 U.S.C. App.   289

Dear Mr. Hein:

     This is in response to your letter dated May 5, 1994, to the
District Director, U.S. Customs Service, Seattle, Washington,
requesting a ruling regarding several cruise itineraries you are
planning.  Your letter was forwarded to this office for direct
reply.  The ruling you request is set forth below.

FACTS:

     Yachtship Cruiseline, Inc., is planning a cruise itinerary
using either a U.S.-flagged or foreign-flagged vessel at various
times of the year.  The cruise would commence with the boarding of
passengers at Seattle for a day excursion through the San Juan
Islands, including a 3 hour port call at a U.S. port (Roche Harbor
or Friday Harbor) and into Haro Straight.  Some of the cruising
would be in Canadian waters to observe whales and other marine
life.  The vessels would not be stopping at any Canadian port, nor
would there be any physical contact with any other vessels while
in Canadian waters.  However, the vessels would travel to a point
beyond U.S. territorial waters in order to be in compliance with
the applicable laws.

     The above itinerary might be revised whereby the vessels would
depart Seattle, make a port call at a U.S. port in the San Juan
Islands and at a Canadian port (either Victoria or Sydney), and
return to Seattle.
                              - 2 -

     Finally, you request that we define the requirements for a
"voyage-to-nowhere".  Specifically, you inquire as to whether the
round trip itinerary originating and terminating in Seattle must
actually reach Canadian waters (no port call) in order for a
foreign-flag vessel to legally be operated in such voyages, or
whether the foreign-flag vessel can begin and end its cruise in
the same place without any stop en route but stay in U.S. waters
at all times.

ISSUES:

      Whether the use of a U.S.-flagged or foreign-flagged vessel
in the cruise scenarios described above constitutes an engagement
in the coastwise trade in violation of 46 U.S.C. App.   289.

LAW AND ANALYSIS:

     Title 46, United States Code Appendix,   289 (46 U.S.C. App.
  289, the passenger coastwise law), prohibits the transportation
of passengers between points embraced within the coastwise laws of
the United States, either directly or by way of a foreign port, in
a non-coastwise-qualified vessel (i.e., any vessel not built in and
documented under the laws of the United States and owned by persons
who are citizens of the United States).  For purposes of   289,
"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(b)(1), Customs Regulations (19 CFR 
  4.80a(b)(1); copy enclosed), promulgated pursuant to 46 U.S.C.
App.   289, provides that a coastwise violation occurs if a
passenger is on a voyage solely to one or more coastwise ports and
the passenger disembarks or goes ashore temporarily at a coastwise
port. 

     Section 4.80a(b)(2), Customs Regulations (19 CFR 
  4.80a(b)(2); copy enclosed), also promulgated pursuant to 46
U.S.C. App.   289, provides that a coastwise violation occurs if
a passenger is on a voyage to one or more coastwise points and a
nearby foreign port or ports (but at no other foreign port) and
the passenger disembarks at a coastwise port other than the port
of embarkation.  (see 19 CFR   4.80a(a)(1)(2) and (4) for the
definitions of the terms "coastwise port," "nearby foreign port,"
"embark," and "disembark," as those terms are used in the
regulation)
                              - 3 -

     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 the 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 (29 O.A.G.
318 (1912)).  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 passengers' embarkation, is
considered coastwise trade (T.D. 55193(2)).

     In interpreting the coastwise laws, Customs has ruled that a
point in United States territorial waters is a point in the United
States embraced within the coastwise laws.  The territorial waters
of the United States consist of the territorial sea, defined as the
belt, 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. 

     In regard to the proposed cruise itineraries, neither one
meets the criteria of a "voyage-to-nowhere" since each includes a
stop, albeit temporary, at another coastwise point.

     Furthermore, in regard to the first proposed cruise itinerary,
the passengers will embark and disembark at the same coastwise port
(Seattle) with an intervening 3 hour port call at a U.S. port
(Roche Harbor or Friday Harbor).  Accordingly, pursuant to 19 CFR
  4.80a(b)(1) there would be a violation of 46 U.S.C. App. 289 with
regard to the use of a foreign-flagged vessel on this particular
cruise.  However, no such violation would occur with regard to a
U.S.-flagged vessel provided it is also U.S.-built (i.e.,
coastwise-qualified).

     In addition, the passengers in the second proposed itinerary
will embark and disembark at the same coastwise port (Seattle) with
intervening port calls at a U.S. port (the San Juan Islands) and
Canada (Victoria or Sydney, both of which are nearby foreign ports
as defined in 19 CFR   4.80a(a)(2)).  Accordingly, pursuant to 19
CFR   4.80a(b)(2) there would be no violation of 46 U.S.C. App.  
289 with respect to either the U.S. or foreign-flagged vessel.
                              - 4 -

     Parenthetically, we note that aside from the provisions of
the passenger coastwise law discussed above, the U.S.-flagged and
foreign-flagged vessels engaging in the cruises in question must
report their arrival immediately upon their return to Seattle
pursuant to 19 U.S.C.   1433 and make entry pursuant to 19 U.S.C.
  1434.

HOLDING:

     The use of a foreign-flagged vessel in the first cruise
itinerary described above constitutes an engagement in the
coastwise trade in violation of 46 U.S.C. App.   289 whereas the
use of a U.S.-flagged vessel would not provided it is U.S.-built
(i.e., coastwise-qualified).  The use of either a U.S.-flagged or
foreign-flagged vessel in the second cruise itinerary described
above would not constitute an engagement in the coastwise trade in
violation of 46 U.S.C. App.   289.

                              Sincerely,




                              Arthur P. Schifflin
                              Chief
                              Carrier Rulings Branch