Coastwise; Passengers; Voyage to Nowhere; SCUBA; Divers; 46 U.S.C. App. 289.

HQ 112716 June 2, 1993 VES-3-02 CO:R:IT:C 112716 JBW CATEGORY: Carriers Mr. Troy R. Holbritter Meyer, Orlando & Evans 2300 America Tower 2929 Allen Parkway Houston, Texas 77019 RE: Coastwise; Passengers; Voyage to Nowhere; SCUBA; Divers; 46 U.S.C. App. 289. Dear Mr. Holbritter: This letter is in response to your inquiry of April 29, 1993, in which you request a ruling on the application of the coastwise laws to the transportation of passengers for SCUBA diving expeditions. FACTS: Your clients are purchasing the M/V SOUTHERN STAR, a foreign- built vessel. The vessel will be used for the commercial carriage of SCUBA diving expeditions in the Gulf of Mexico. The vessel will always depart from Freeport, Texas, and travel to one of three diving sites. Each site is approximately 110 miles off the Texas gulf coast, beyond the territorial waters of the United States. Upon completion of the diving expeditions, the vessel will return with its passengers to the point of embarkation in Freeport. No passengers will be permitted to leave the vessel at any point other than Freeport, nor will passengers swim or dive in United States territorial waters. ISSUE: Whether the transportation of SCUBA divers to a diving site outside United States territorial waters is an engagement in the coastwise trade that is prohibited by 46 U.S.C. App. 289. LAW AND ANALYSIS: 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. 46 U.S.C. App. 289. 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. 1992), 46 U.S.C. App. 289, and 19 C.F.R. 4.80(a) (1992). Generally, the coastwise laws apply to points within the territorial sea of the United States, defined as the belt, three 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. Headquarters Ruling Letter 111275, dated November 13, 1990. 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. E.g., Headquarters Ruling Letter 110990, dated May 21, 1990. However, the transportation of passengers to the high seas or foreign waters and back to the precise point of embarkation, often called a "voyage to nowhere," is not considered coastwise trade. Id. An important corollary to this rule is that a "voyage to nowhere" assumes the passengers do not leave the vessel, even temporarily, at another United States point. Id. Furthermore, 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. Headquarters Ruling Letter 111051, dated August 16, 1990. The Customs Service has determined that passengers swimming or diving at points outside the territorial waters of the United States are not leaving the vessel at another United States point. Headquarters Ruling Letter 109899, dated December 23, 1988. Such a trip would therefore not be prohibited by the coastwise laws provided the voyage began and ended at the same port. Id. Applying this conclusion to the facts in the present case, we determine that the carriage of SCUBA expeditions to points outside United States territorial waters is not an engagement in the coastwise trade that is prohibited by 46 U.S.C. App. 289. This conclusion is premised on your statement that the voyages will begin and end in Freeport and that the passengers will not be permitted to leave the vessel at other United States ports or in United States territorial waters. HOLDING: The carriage of SCUBA expeditions to points outside United States territorial waters is not an engagement in the coastwise trade that is prohibited by 46 U.S.C. App. 289 provided the divers begin and end their voyage at the same United States point and the divers do not dive or otherwise leave that vessel at other United States points. Sincerely, Acting Chief