Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.80a

HQ H032396 August 18, 2008 VES-3-02-OT:RR:BSTC:CCI H032396 JLB CATEGORY: Carriers Mr. Jorge L. Viteri District Manager, California Quay Cruise Agencies, U.S.A. 1000 E. Del Amo Boulevard Carson, California 90746-3520 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.80a Dear Mr. Viteri: This letter is in response to your correspondence dated July 2, 2008, in which you request a ruling on whether cruise itineraries involving a “voyage to nowhere” constitute a violation of 46 U.S.C. § 55103. Our ruling on your request follows. FACTS The voyage in question involves the non-coastwise-qualified M/S MARINER OF THE SEAS (“the vessel”). The vessel will embark passengers at Los Angeles berth 91/92 on February 19, 2009 for its first “cruise to nowhere.” The vessel will travel to international waters, and then return to berth 91/92 the next day where the passengers will disembark. The second “cruise to nowhere” will leave that day, on February 20, 2009, with the vessel once again embarking passengers at the Los Angeles berth 91/92 for the second “cruise to nowhere,” traveling to international waters, and returning to the same berth the following day to disembark passengers. Once the vessel reaches international waters, the passengers would be allowed to shop in the vessel’s duty-free shop and engage in casino gambling. ISSUE Whether the use of a non-coastwise-qualified vessel in the cruise itinerary described above constitutes an engagement in coastwise trade in violation of 46 U.S.C. § 55103? LAW AND ANALYSIS The coastwise passenger statute, former 46 U.S.C. App. § 289 recodified as 46 U.S.C. § 55103, pursuant to P.L. 109-304 (October 6, 2006), states that no foreign vessel shall transport passengers “between ports or places in the United States to which the coastwise laws apply, either directly or by way of a foreign port,” under a penalty of $300 for each passenger so transported and landed. See also 19 C.F.R. § 4.80(b)(2). The coastwise laws generally apply to points in the territorial sea, which is 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 its administration of 46 U.S.C. § 55103, U.S. Customs and Border Protection (“CBP”) 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. The CBP Regulations promulgated pursuant to 46 U.S.C. § 55103 are found at 19 C.F.R. § 4.80a. These regulations provide guidelines for determining whether the movement of passengers between two coastwise points is considered coastwise trade. “Embark” is defined as a “passenger boarding a vessel for the duration of a specific voyage.” See 19 C.F.R. § 4.80a(a)(4). A passenger does not "disembark" if they merely go ashore temporarily at a coastwise port so long as they re-board the vessel before it leaves for a foreign port. See 19 C.F.R. § 4.80a(a)(4). A passenger only "disembarks" from the vessel if the passenger “finally and permanently" leaves the vessel at the conclusion of the specific voyage. See Headquarters Ruling Letter 112208, dated June 29, 1992. However, the transportation of passengers to the high seas (i.e. beyond the three mile territorial sea) 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. See 29 O.A.G. 318 (1912); see, e.g., Headquarters Ruling Letter H027231, dated May 2, 2008; Headquarters Ruling Letter H014892, dated August 17, 2007; Headquarters Ruling Letter 113846, dated May 5, 1997; Headquarters Ruling Letter 112171, dated May 20, 1992. Accordingly, 46 U.S.C. § 55103 is inapplicable to the subject voyages as they both constitute “voyages to nowhere.” Consequently, there is no violation of 46 U.S.C. § 55103. The operation of duty-free stores is not within the purview of this branch. We suggest that you direct any inquiries you may have in that regard to:William Rosoff, Chief Entry Process & Duty Refunds Branch U.S. Customs and Border Protection 1300 Pennsylvania Ave, N.W. Washington, DC 20229 ATTN: Mint Annex (202) 572-8770 Additionally, we note that gambling activities are not within the purview of CBP but rather the Department of Justice. We suggest that you direct any inquiries you may have in that regard to the following address:Organized Crime and Racketeering Section Criminal Division Department of Justice 950 Pennsylvania Avenue, N.W.Washington, D.C. 20530 HOLDING The use of a non-coastwise-qualified vessel in the cruise itinerary described above does not constitute an engagement in the coastwise trade in violation of 46 U.S.C. § 55103. Sincerely, Glen E. Vereb, Chief Cargo Security, Carriers and Immigration Branch