Coastwise trade; Passengers; Voyage to nowhere; Use of Yacht foreign territorial waters; 46 U.S.C. App. 289

HQ 111621 September 5, 1991 VES-3-CO:R:IT:C 111621 LLB CATEGORY: Carriers Mr. C. Lance Ericson 19345 US 19th North #402 Clearwater, Florida 34624 RE: Coastwise trade; Passengers; Voyage to nowhere; Use of Yacht foreign territorial waters; 46 U.S.C. App. 289 Dear Mr. Ericson: Reference is made to your letter of April 2, 1991, in which you request that we answer several questions that you pose regarding the proposed use of your American-flag pleasure vessel. FACTS: The vessel in question is documented for pleasure under the laws of the United States. Although built in this country, the vessel was for a period of time under foreign ownership, thus imposing a lifetime restriction on the qualification of the vessel to be documented for the coastwise trade. Three potential itineraries are posed, and we are asked to rule upon their legality under United States law. The proposed uses are as follows: 1. The vessel would operate for hire between foreign ports only. No United States points would be involved. 2. The vessel would operate for hire entirely within the territorial waters of a foreign nation. No United States points would be involved. 3. The vessel would operate for hire on cruises leaving a dock in the harbor of San Juan, Puerto Rico, sailing "around the bay", and returning to the same dock to discharge the passengers. In all cases you ask whether the captain needs a United States license, and whether the vessel will be operating in violation of any United States laws. ISSUE: Whether a documented pleasure vessel may operate for hire in foreign territorial or international waters, and in operations out of and back into a single coastwise point. 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. On the basis of the foregoing interpretations by the Customs Service, vessels not qualified to engage in the coastwise trade may be operated on voyages to nowhere in which passengers transported from a point in the United States to a point outside United States territorial waters and back to the point of the passengers' embarkation, assuming the vessel does not touch any other coastwise point. As stated above, this Customs interpretation is of long-standing duration and is based on an Opinion of the Attorney General of the United States. We are aware of no action by the Congress of the United States in all of the time this interpretation has existed indicating that our interpretation is contrary to the intent of the Congress in enacting the coastwise laws, although Congress has on various occasions since their enactment heard testimony on their application. You should be aware, however, that voyages of vessels carrying offshore fishing parties for hire, regardless of whether trips extend beyond the three mile limit of the territorial waters, are considered to be predominantly coastwise in their nature and object. As such, non-coastwise-qualified vessels may not legally engage in such voyages. (Treasury Decision 55193(2)). In the context of the current matter, the vessel in question may operate outside the United States, as proposed, (either between foreign ports or within the territorial waters of a foreign nation) without violating the coastwise passenger transportation statute. In regard to the proposal to use the vessel in Puerto Rico, the legality of that proposed use under section 289 would depend upon whether passengers are transported from a coastwise point, are taken outside the territorial waters (to the high seas), and are returned to the same point from which they departed in order to be disembarked. It is not clear from the facts as presented whether sailing "around the bay" includes proceeding into international waters. This ruling only concerns the legality of the operation of the vessel in question under 46 U.S.C. App. 289. The issues raised concerning citizenship requirements and commercial use of a documented pleasure vessel are within the purview of the U.S. Coast Guard. We cannot presume to rule upon matters within the jurisdiction of that agency, but our informal opinion is that section 8103(a) of title 46, United States Code would require that the master of the vessel be a citizen of the United States. Further, commercial use of a documented pleasure vessel would appear to be in violation of section 12110(c) of title 46, United States Code. We strongly urge that the U.S. Coast Guard be consulted on these matters prior to engagement of the vessel in the proposed itineraries. Information on these points may best be obtained by contacting: Chief, Vessel Documentation Branch U.S. Coast Guard (GMVI-6/13) 2100 Second Street, S.W. (Rm. 1312) Washington, D.C. 20593-0001 (Phone (202) 267-1492) HOLDING: The holding in this ruling addresses only the legality of the proposed use of a U.S.-documented pleasure vessel under 46 U.S.C. App. 289. Section 289 will not be violated under the proposed uses set forth in this ruling, so long as the vessel proceeds into international waters on trips from and returning to the same coastwise point when operating out of Puerto Rico or any other coastwise location. Sincerely, B. James Fritz Chief Carrier Rulings Branch