Coastwise; Passengers; Sailing School; D'SONOQUA; 46 U.S.C. App. 289.

HQ 111021 August 28, 1990 VES-3-19-CO:R:P:C 111021 JBW CATEGORY: Carriers Mr. Bob Horanzy, President Cape Fear Inner City Outings, Inc. 166 Mallard Bay Drive Hampstead, N.C. 28443 RE: Coastwise; Passengers; Sailing School; D'SONOQUA; 46 U.S.C. App. 289. Dear Mr. Horanzy: This letter is in response to your inquiry of May 4, 1990, in which you request a ruling regarding the use of a foreign-built sailing vessel in United States territorial waters. FACTS: In your letter, you state that you intend to use a foreign-registered schooner to offer sailing instruction to disabled and disadvantaged youth participating in programs sponsored by Cape Fear Inner City Outings. Specifically, the vessel is a fifty foot gaff rigged schooner that was built in Canada and is currently registered in Canada. ISSUE: Whether the use of a foreign-built vessel for sailing instruction would be in violation of the coastwise passenger law, 46 U.S.C. App. 289. LAW AND ANALYSIS: The coastwise laws generally prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a United States built, owned, and documented vessel. 46 U.S.C. App. 289 (Supp. III 1985) & 46 U.S.C.A. 883 (West Supp. 1990). Points in the United States embraced within the coastwise laws include the United States territorial waters. The territorial waters of the United States consist of a belt, three nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline. The Customs Regulations define "passenger" for purposes of section 289 as "any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business." See 19 CFR 4.50(b)(1989). 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 required in order to receive such training or instruction, is not a "passenger" within the coastwise laws. Accordingly, if the vessel is used only for such training, then it would not be required to have a license to engage in the coastwise trade. See Headquarters Ruling Letter 109850, dated December 27, 1988, and Headquarters Ruling Letter 109287, dated February 24, 1988. Therefore, the sole use of a foreign sailing vessel in connection with a bona fide instructional course in sailing and navigation with class or other instruction, as opposed to an outing, does not constitute coastwise trade within the meaning of 46 U.S.C. App. 289. However, all persons being carried in the vessel must be involved with the operation, navigation, or business of the vessel. Persons who are carried on board a vessel for recreational purposes and who pay a fee for such carriage would be considered "passengers," and their carriage between places in the United States or entirely within United States waters would be in violation of the coastwise laws. HOLDING: The sole use of a foreign sailing vessel in connection with a bona fide instructional course in sailing and navigation with appropriate instruction and training is not coastwise trade in violation of 46 U.S.C. App. 289. 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 Carrier Rulings Branch