Coastwise Trade; Sailing Instruction; 46 U.S.C. App. § 289

HQ 115141 September 13, 2000 VES-3-19-RR:IT:EC 115141 GEV CATEGORY: Carriers Mark Ercolin, Esq. Suite 210 901 S.E. 17th Street Causeway Fort Lauderdale, Florida 33316 RE: Coastwise Trade; Sailing Instruction; 46 U.S.C. App. § 289 Dear Mr. Ercolin: This is in response to your letter dated August 17, 2000, requesting a ruling regarding the use of a foreign-flagged vessel in U.S. waters. Our ruling on this matter is set forth below. FACTS: Your clients, who are in south Florida, teach the “on land” modules required for a British Yachtmaster’s Certificate. This certificate has become important to those who wish to work as masters and mates on U.K. and other “red ensign” yachts. It is now your client’s wish to bring a 42’ Cayman Islands-registered motor vessel into U.S. waters (specifically south Florida), and use it to teach the “at sea” portion of the Yachtmaster’s Certificate to paying students. The master and mate teaching the modules would be foreign citizens (specifically British and Irish with proper resident status). The students who will be paying for instruction will number six or less per voyage, and will most likely be a mixture of primarily British, Australian and U.S. citizens. It is the intention and desire of the instructors to teach the modules while the vessel travels in south Florida waters. - 2 - ISSUE: Whether the use of a Cayman Islands-flagged vessel in U.S. waters for the “at sea” instruction required to obtain a British Yachtmaster’s Certificate constitutes a violation of 46 U.S.C. App. § 289. LAW AND ANALYSIS: The U.S. Customs Service enforces various navigation laws which deal with the use of vessels in what is recognized as coastwise trade. Included among these laws is the Act of June 19, 1886, as amended (24 Stat. 81; 46 U.S.C. App. § 289, sometimes called the coastwise passenger law), which 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. Pursuant to § 4.50(b), Customs Regulations (19 CFR § 4.50(b)), the word "passenger," for purposes of the above-cited statute, is defined as "...any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business." Customs has consistently interpreted the prohibition set forth in 46 U.S.C. App. § 289 to apply to all vessels except United States-built, owned, and properly documented vessels (see 46 U.S.C. § 12106, 12110; and 46 U.S.C. App. § 883). Furthermore, Customs has promulgated regulations pursuant to 46 U.S.C. App. § 289. These regulations may be found in title 19, Code of Federal Regulations, § 4.80a. The coastwise laws generally apply to points in the territorial sea, 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 coastline differ. In our interpretation of 46 U.S.C. App. § 289, Customs has long-held that a person transported on a vessel as a student in bona fide instructional courses in oceanography or sailing and navigation/ seamanship, when the presence of that person is required on board the vessel as a part of his or her course or training, is not a passenger for purposes of the coastwise laws (Customs ruling letter 108166, - 3 - dated February 27, 1986). This is so regardless of whether a fee is charged for the aforementioned instruction. Upon reviewing the proposed use of your client’s vessel in U.S. waters, it is readily apparent that it falls within the permitted activities described above. Consequently, such use would not constitute coastwise trade in violation of 46 U.S.C. App. § 289. Parenthetically, we note your letter references the vessel traveling in south Florida waters (e.g., between Fort Lauderdale and Key West) under a “properly issued cruise permit.” In this regard you should know that § 4.94, Customs Regulations (19 CFR § 4.94) addresses the issuance of cruising licenses which exempt foreign yachts from formal entry and clearance procedures (e.g., filing manifests, obtaining permits to proceed and exemptions from the payment of tonnage tax and entry and clearance fees) at United States ports. Section 4.94 was promulgated pursuant to title 46, United States Code Appendix, § 104 (46 U.S.C. App. § 104) which authorizes the issuance of cruising licenses to pleasure vessels of countries which extend reciprocal privileges to United States vessels. Great Britain (which includes the Cayman Islands) is on the list of countries appearing in § 4.94(b) whose yachts may be issued cruising licenses. It should be noted, however, that 46 U.S.C. App. 104 provides that on the basis of reciprocity, foreign yachts may be granted cruising licenses provided they are "...used and employed exclusively as pleasure vessels..." (Emphasis added) Upon reviewing the proposed activities to be conducted on board the vessel in question (i.e., the “at sea” portion of the British Yachtmaster’s Certificate), it is our determination that the use of the vessel in this manner is for other than pleasure purposes. Accordingly, while the proposed use of the subject vessel would not constitute a violation of 46 U.S.C. App. § 289, such use would preclude the issuance of a cruising license. - 4 - HOLDING: The use of a Cayman Islands-flagged vessel in U.S. waters for the “at sea” instruction required to obtain a British Yachtmaster’s Certificate as described above does not constitute a violation of 46 U.S.C. App. § 289. Sincerely, Larry L. Burton Chief Entry Procedures and Carriers Branch