VES-3-02-CO:R:IT:C 112158 BEW
Dr. Paul Snyder
5519-N Highway 153
Chattanooga, TN 37343
RE: Coastwise Trade; Passengers; Cargo; Non-Coastwise-Qualified
Vessel; 46 U.S.C. App. 289; 46 U.S.C. App. 883
Dear Dr. Snyder:
This is in response to your letter of December 26, 1991,
concerning the use of a British built hovercraft to transport
passengers, cars and freight from a port in Florida to the
Yucatan in Mexico.
FACTS:
You state that the cruise itineraries are as follows:
The passengers will embark at the port of Osprey
Florida at 9:15 a.m., travel to Dry Tortugas, Florida,
at sea for approximately 3 hours, then to Cuba where
you will load and unload passengers, at sea for
approximately 2 hours, than arrive at a port in Mexico
at approximately 5:00 p.m.
Another vessel will leave Mexico at 9:15 a.m. travel
the above route in reverse, and arrive in Osprey,
Florida at approximately 5:00 p.m.
ISSUE:
Whether the use of a non-coastwise-qualified hovercraft to
transport passengers from Osprey, Florida, via the Dry Tortugas
Islands of Florida, to Cuba, and to Mexico, where the passengers
would disembark from the vessel, would be in violation of the
coastwise passenger law, 46 U.S.C. App. 289.
LAW AND ANALYSIS:
Generally, the coastwise laws (e.g., 46 U.S.C. App. 289 and
883, and 46 U.S.C. 12106 and 12110) prohibit the transportation
of merchandise or passengers between points in the United States
embraced within the coastwise laws in any vessel other than a
vessel built in and documented under the laws of the United
States, and owned by persons who are citizens of the United
States.
The passenger coastwise law, 46 U.S.C. App. 289, 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 penalty of $200 for
each passenger so transported and landed.
For purposes of the coastwise laws, a vessel "passenger" is
defined as "... any person carried on a vessel who is not
connected with the operation of such vessel, her navigation,
ownership, or business." (Section 4.50(b), Customs
Regulations.) Section 4.80a, Customs Regulations (19 CFR 4.80a)
is interpretive of section 289.
In its administration of 46 U.S.C. App. 289, 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 coastwise
point, is considered coastwise trade subject to coastwise laws.
However, the transportation of passengers to the high seas
(i.e., beyond U.S. territorial 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. It
should be noted that the carriage of fishing parties for hire,
even if the vessel proceeds beyond territorial waters and returns
to the point of the passenger's embarkation, is considered
coastwise trade.
In interpreting the coastwise laws, Customs has ruled that a
point in United States territorial waters is considered a point
embraced within the coastwise laws. The coastwise laws generally
apply to points in the territorial sea, defined as the belt,
three (3) 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.
If a passenger on a voyage to a distant foreign port embarks
at a coastwise point and goes ashore temporarily to take sight
seeing excursions at an intermediate U.S. port there is no
violation provided that the passenger proceeds on the voyage to
the distant foreign point. The relevancy of whether an
intermediate foreign port is a "nearby foreign port" (as defined
in 19 CFR 4.80a(a)(2)) or a "distant foreign port" (as defined in
19 CFR 4.80a(a)(3)) is crucial in determining whether or not a
violation of section 289 has occurred.
The focus of section 289 is on the route of the vessel.
Section 4.80a(b)(2) of the Customs Regulations (19 CFR
4.80a(b)(2) provides that, "if the passenger is on a voyage to
one or more one or more coastwise ports and a nearby foreign port
or ports (but at no other foreign port) and the passenger
disembarks at a coastwise point other than the port of
embarkation, there is a violation of the coastwise law" (46
U.S.C. App. 289). We have ruled that if a passenger is on a
voyage to one or more coastwise ports and a nearby foreign port
or ports (but at no other foreign port) and the passenger
disembarks the vessel at a nearby foreign port, or if the
passengers embark and disembark at the same coastwise port, there
is no violation of section 289.
In both fact patterns set forth above, the transportation of
passengers on a non-coastwise-qualified vessel from a coastwise
point in Florida to a port in Mexico, a nearby foreign port,
where the passengers would disembark from the vessel would not be
a violation of section 289. In addition, passengers may embark
on a non-coastwise-qualified vessel at a port in Mexico and
disembark at a port in Florida without violating section 289.
However, in your inquiry, you state that during each voyage,
the vessels would travel to and from the U.S. to Mexico via a
port in Cuba.
On April 18, 1992, President Bush issued a directive to the
Secretary of the Treasury to issue regulations that will
prohibit entry into U.S. ports of vessels that are engaged in
trade with Cuba. On April 24, 1992, the Office of Foreign Assets
Control published in the Federal Register (57 FR 15216) a final
rule amending the Cuban Assets Control Regulations by adding a
new section 515.207 (31 CFR 515.207) as follows:
Except as specifically authorized by the Secretary of
the Treasury (or any person, agency or instrumentality
designated by him), by means of Regulations, rulings,
instructions, licenses or otherwise, no vessel carrying
goods or passengers to or from Cuba or carrying goods
in which Cuba or a Cuban National has an interest may
enter a U.S. port.
In addition, sections 515.533 and 515.560 of the Cuban
Assets Control Regulations (31 CFR 515.533 and 515.560) were also
amended. (A copy of the Federal Register notice is enclosed for
your information).
In view of the foregoing, at this time we are not issuing
rulings on the use of a foreign-built vessel to transport
passengers from a U.S. port to Cuba or from Cuba to a U.S. port.
Questions relating to the Cuban Asset Control Regulations may be
directed to the:
Office of Foreign Assets Control
Department of the Treasury
Washington, DC 20220
In addition, you state that you understand that a complete
foreign manifest and all required shipper's export declarations
must be filed with the district director prior to your departure.
For your information, the coastwise law pertaining to the
transportation of merchandise, section 27 of the Act of June 5,
1920, as amended (41 Stat. 999; 46 U.S.C. App. 883, often called
the Jones Act), provides that:
No merchandise shall be transported by water,
or by land and water, on penalty of
forfeiture of the merchandise (or a monetary
amount up to the value thereof as determined
by the Secretary of the Treasury, or the
actual cost of the transportation, whichever
is greater, to be recovered from any
consignor, seller, owner, importer,
consignee, agent, or other person or persons
so transporting or causing said merchandise
to be transported), between points in the
United States ... embraced within the
coastwise laws, either directly or via a
foreign port, or for any part of the
transportation, in any other vessel than a
vessel built in and documented under the laws
of the United States and owned by persons who
are citizens of the United States ....
"Merchandise" is defined in section 1401(c) of title 19,
United States Code, to include goods, wares, and chattels of
every description, and includes fish, fish products, and fish
packaging materials that are assembled into packages containing
fish. Section 883 specifically provides that, for purposes of
its provisions, "merchandise" includes valueless material (Pub.L.
100-329; 102 Stat. 588). The transportation of valueless
material, whether or not it has commercial value, from a point or
place in the United States or point or place on the high seas
within the Exclusive Economic Zone (EEZ) as defined in the
Presidential Proclamation of March 10, 1983, to another point or
place in the United States or a point or place on the high seas
within that EEZ would also be prohibited under the provisions of
section 883.
The prohibitions set forth in section 883 are against the
use of foreign-flag or non-coastwise-qualified U.S. vessels for
the transportation of the goods from port to port or point to
point within the territorial waters of the United States.
HOLDING:
The transportion on a non-coastwise-qualified vessel of a
passenger on a voyage to one or more coastwise ports and a nearby
foreign port or ports (but at no other foreign port) would not be
violative of section 289, provided the passenger disembarks from
the vessel at the nearby foreign port, or the passenger embarks
on and disembarks from the vessel at the same coastwise port.
Vessels entering a U.S. port from Cuba or departing a U.S.
port to Cuba are subject to the provisions set forth in the Cuban
Assets Control Regulations, as amended (31 CFR 515.207 et al.)
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch
Enclosure
cc: Regional Commissioner Southeast Region