VES-3/VES3-02-CO:R:P:C 109765 KMF
Passenger Ship Project Department
Tsuneishi Shipbuilding Co., Ltd.
1083 Tsuneishi, Numakuma, Hiroshima Pref.
Japan Postal Code 720-03
ATTN: A. Kurimoto
RE: Applicability of the coastwise laws to proposed passenger
vessel movements between the Federated States of Micronesia and
Guam
GENTLEMEN:
Reference is made to your telex of September 22, 1988, in
which you request a ruling on whether United States laws permit a
Japanese Shipping Company to conduct the tour described below.
FACTS:
You state that as part of an air/cruise program tour to
begin and terminate in Japan passengers would be flown from Japan
to Guam. At Guam they would board a foreign-built and flagged
passenger ship for a six-day island tour of Micronesia with calls
at Ulithi Atoll and Woleai Atoll of the Federated States of
Micronesia. The vessel in question would be flagged under
Panama. The cruise portion of the tour would terminate at Guam,
and the passengers would then be flown back to Japan.
ISSUE:
Whether the coastwise passenger statute prohibits the
transportation of passengers in a foreign-flagged vessel from
Guam to Ulithi Atoll and Wolleai Atoll in the Federated States of
Micronesia and back to Guam.
LAW AND ANALYSIS:
Generally speaking, the coastwise laws (46 U.S.C. App. 289
and 883, and 46 U.S.C. 12106 and 12110) prohibit the
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transportation of pasengers between points in the United States
embraced within the coastwise laws in any vessel other than a
vessel built in, documented under the laws of, and owned by
citizens of the United States. Pursuant to 46 U.S.C. App. 877,
the coastwise laws are made applicable to Guam, although under 46
U.S.C. 12102, a vessel documented with a United States registry
may be employed in trade with Guam.
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. The
transportation of passengers solely to foreign locations and back
to the point of embarkation is not considered coastwise trade.
(See generally 19 C.F.R. 4.80a (1988)). The territorial waters
of the United States consist of the territorial sea, defined as
the belt, 3 nautical miles wide, adjacent to the coast of the
United States and seaward of the territorial sea baseline. This
definition also applies to the waters adjacent to Guam.
Application of United States law to the Federated States of
Micronesia is governed by Article VII of the Compact of Free
Association between the United States and the governments of the
Marshall Islands and the Federated States of Micronesia
(Compact), as approved in the Compact of Free Association Act of
1985. Pub. L. 99-239 (Jan. 14, 1986), 99 Stat. 1770, as amended
Pub. L. 99-396, Section 20(a) (Aug. 27, 1986), 100 Stat. 844,
Pub. L. 99-658, Title I, Sections 103, 104 (c), 100 Stat. 3675,
3676, cited at note following 48 U.S.C. 1681.
Pursuant to section 171 of the Compact, "[e]xcept as
provided in this Compact or its related agreements, the
application of the laws of the United States to the Trust
Territory of the Pacific Islands by virtue of the Trusteeship
Agreement ceases with respect to the Marshall Islands and the
Federated States of Micronesia as of the effective date of this
Compact."
The Compact makes no provision for the application of
United States coastwise laws to the Federated States of
Micronesia. We are aware of no agreement extending the coastwise
laws of the United States to the members of that Compact. By
proclamation 5564, appearing in the Federal Register of November
7, 1986 (51 Fed. Reg. 40,399 (1986)), the President declared that
as of November 3, 1986, the Federated States of Micronesia are
"self-governing and no longer subject to the Trusteeship," and
that the Compact of Free Association is in effect. Because the
proposed tour will embark from an American port, Guam, with stops
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solely in foreign ports, Ulithi Atoll and Wolleai Atoll, with
return to the port of embarkation, Guam, it is not considered
coastwise trade.
HOLDING:
Accordingly, in response to your specific inquiry, and in
consideration of the foregoing facts, law, and analysis, the
proposed transportation of passengers from Guam to Ulithi Atoll
and to Wolleai Atoll in the Federated States of Micronesia, with
return to Guam, may be accomplished with the use of a foreign-
flagged vessel without violating 46 U.S.C. App. 289.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch