VES--03-CO:R:IT:C 112465 BEW
Mr. Bent Bertelsen
P. O. Box 925
Huntsville, Ontario
POA 1 KO Canada
Re: Pleasure Vessel; Undocumented Foreign Vessel; Canadian
Citizen; Cruising License; State Registered
Dear Mr. Bertelsen:
This is reference to your request for a ruling concerning the
use of an undocumented pleasure vessel in the waters of the United
States.
FACTS:
You state that you are a citizen of Canada, and that you have
purchased a used pleasure vessel in Florida, which you wish to use
in the waters of Florida. You state that you will registered the
vessel in Florida when you arrive there. You ask whether you can
fly a United States flag on the subject vessel when you register
it in Florida. You also ask whether there is a limit on the length
of time in which you are permitted to keep the vessel in the waters
of Florida. You state that in the future you may take the vessel
to Canada. You ask whether you may avoid paying Florida sales
taxes; and whether you could receive a refund for taxes that you
may have to pay in the State of Florida when you purchased and
register the vessel in that state.
ISSUES:
1. Whether a "licensed yacht or undocumented foreign-owned
pleasure vessel" which is State registered, and owned by a
Canadian citizen, is exempt from entry and clearance within
the meaning of the provisions in 19 U.S.C. 1441(3) and 46
U.S.C. App. 91.
2. Whether a cruising license may be issued to an
undocumented foreign-owned pleasure vessel, which is State
registered, and owned by a Canadian citizen.
LAW AND ANALYSIS:
The master of any foreign vessel arriving in a United States
port, whether from a foreign port or another United States port,
is required under the provisions of title 19, United States Code,
section 1433 (19 U.S.C. 1433), to immediately report its arrival.
Section 1433, provides in pertinent part, that immediately upon the
arrival at any port or place in the United States or Virgin Islands
of: (1) any vessel from a foreign port or place; (2) any foreign
vessel from a domestic port; or (3) any vessel of the United States
carrying bonded merchandise, or foreign merchandise for which entry
has not been made, the master of the vessel shall report the
arrival at the nearest customs facility or such other place as the
Secretary may prescribe by regulation.
In addition, the master of any foreign vessel arriving in a
United States port, whether from a foreign port or another United
States port is required to make vessel entry under title 19, United
States Code, section 1435 (19 U.S.C. 1435), and section 4.3 of
the Customs Regulations (19 CFR 4.3). Such vessels are also
required to clear when bound for a foreign port, and must have a
permit to proceed from one United States port to another.
Paragraph (3) of 19 U.S.C. 1441, exempts from entry in the
United States licensed yachts or undocumented American pleasure
vessels not engaged in trade nor in any way violating the Customs
or navigation laws of the United States and not having visited any
hovering vessel. The statute requiring vessel clearance of a
vessel bound to a foreign port or place (46 U.S.C. App. 91)
contains a similar provision under which "a licensed yacht or an
undocumented American pleasure vessel not engaged in any trade nor
in any way violating the customs or navigation laws of the United
States" is exempt from clearance.
Customs interpretation of the term "licensed yacht or
undocumented American pleasure vessel" in 19 U.S.C. 1441(3) and
46 U.S.C. App. 91, under which such vessels are exempt from
vessel entry and clearance under the circumstances described
therein, is as follows:
(1) A "licensed yacht or undocumented American pleasure
vessel" includes:
(a) A pleasure vessel documented by the United States
Coast Guard under 46 U.S.C. chapter 121; and
(b) An undocumented pleasure vessel owned by a citizen
of the United States, regardless of whether the
United States citizen is a resident of the United
States and regardless of whether the vessel is
numbered under a State numbering system.
Customs has held that an undocumented American pleasure vessel
must meet the same requirements as a documented American pleasure
vessel, except that for its tonnage it is not documented. To be
eligible for documentation, a vessel must be: (1) of at least 5 net
tons; (2) not registered under the laws of a foreign country; and
(3) owned by a citizen of the United States (See 46 U.S.C. 12102;
46 CFR Subpart 67.03). There is no residency requirement for
United States vessel documentation.
Customs has ruled that an undocumented pleasure vessel that
is numbered under a State numbering system may not be considered
an undocumented American pleasure vessel unless it qualifies,
except for tonnage, for documentation under 46 U.S.C. 12102.
Consistent with this conclusion, a "licensed yacht or
undocumented American pleasure vessel" does not include a pleasure
vessel documented under a foreign flag, regardless of whether it
is owned by a citizen of the United States and regardless of
whether it is numbered under a State numbering system; and an
undocumented pleasure vessel owned by a foreign citizen, regardless
of whether it is numbered under a State numbering system.
(Consistent with this position, see also The Chiquita, 19 F.2d 417
(1927); Moore, International Law, vol. 2 pp. 1002-1009, cited in
The Chiquita; and 80 Corpus Juris Secundum 569, citing The
Chiquita; but see contra, 46 U.S.C. 2101(46) defining "vessel of
the United States" to include numbered vessels for purposes of 46
U.S.C. Subtitle II (These laws do not include laws relating to
Customs entry requirements)).
With regard to State numbering, we note that under the Coast
Guard Regulations on State numbering, a State numbering system may
require the numbering of any vessel subject to the jurisdiction of
the state with certain exceptions (see 33 CFR 174.11(b)).
A vessel with a State certificate or number is not considered
"a documented vessel" as that term is used under laws and
regulations administered by the Customs Service. Since you are a
citizen of Canada, until such time as your vessel becomes
documented in Canada or another foreign country, Customs considers
your vessel an undocumented Canadian vessel.
Title 46, United States Code Appendix, section 104 (46 U.S.C.
App. 104), authorizes the issuance of cruising licenses to
pleasure vessels of countries which extend reciprocal privileges
to United States pleasure vessels. Canada is such a country. The
determining factor as to whether a vessel is eligible for a
cruising license is the documentation of the vessel and not the
residency of the owner. The license is granted subject to the
condition that the vessel will not engage in trade or violate the
laws of the United States in any respect. (See 19 CFR 4.94(c), copy
enclosed). A cruising license does not exempt a vessel from the
requirement to report its arrival in the United States to Customs
immediately upon such arrival (see 19 U.S.C. 1433 and 19 CFR
4.2). If the subject vessel were documented in Canada or another
country which extends reciprocal privileges to the United States,
it would be eligible for a cruising license.
Finally, you should be aware that under the provisions of
section 4.2a of the Customs Regulations (19 CFR 4.2a), there are
special requirements for reporting of arrival from any foreign port
or place by small vessels whose intended destination is a point
within the jurisdiction of Miami, Florida. Operators of small
vessels (i.e. any vessel of less that 5 net tons, and any private
vessel, regardless of displacement) shall immediately report their
arrival in the United States. You will be required to clear the
vessel at the port of Miami each time you depart the territorial
waters of Florida on your outbound trips and report your arrival,
enter and clear the vessel each time you arrive at and depart from
a port of entry in Florida or any other U.S. port. A permit to
proceed to other U.S. ports may be issued on your outbound trip
from Florida to other U.S. ports where you wish to make stops.
Section 4.61(d) of the Customs regulations provides that
clearance shall not be granted to any foreign vessel using the flag
of the United States or any distinctive signs or markings
indicating that the vessel is an American vessel (see 22 U.S.C.
454a).
Information concerning the flying of flags on vessels may be
obtained from the U.S. Coast Guard, Seventh Coast Guard District,
Miami, Florida, telephone number 305-536-5651. You may also wish
to refer to Chapman's Nautical Guides on boating etiquette.
HOLDINGS:
1. An undocumented pleasure vessel owned by a citizen of
Canada, whether State registered or not, is for Customs
purposes considered an undocumented foreign vessel; and is
not exempt from entry and clearance within the meaning of the
provisions in 19 U.S.C. 1441(3) and 46 U.S.C. App. 91.
2. A cruising license may be issued under the provisions of
46 U.S.C. App. 104 to a pleasure vessel, owned by Canadian
citizens, provided that the vessel is documented under the
laws of Canada or another country which extends reciprocal
privileges to pleasure vessels of the United States.
Sincerely,
Acting Chief
Carrier Rulings Branch
Enclosure