HQ 113088
VES-3-CO:R:IT:C 113088 LLB
Mr. John H. Thomas
3037 S.W. Fourth Avenue
Miami, Florida 33129
RE: Coastwise trade; Recreational endorsement; Registry
endorsement; Chartering; Voyage to nowhere; Puerto Rico and
U.S. Virgin Islands
Dear Mr. Thomas:
Reference is made to your request for a ruling on the
applicability of the Customs and navigation laws to the operation
of vessels configured as yachts under specific circumstances.
Our response to your specific questions is presented below.
FACTS:
Several questions are posed regarding the use of vessels
configured as yachts, both inside and outside of the territorial
waters of the United States. A restatement of the questions
posed follows:
1. Are there any restrictions on the use of a vessel for
pleasure purposes as well as commercial purposes, so long as the
vessel is documented as a vessel of the United States and is
endorsed for recreational, registry, and coastwise trades?
2. If a vessel is chartered out with a crew included for
operation within the waters of Puerto Rico as well as the U.S.
Virgin Islands, is it necessary that the vessel be endorsed for
the coastwise trade?
3. If a vessel is chartered out with a crew included for
operation on a cruise to nowhere from a port of the United States
to the high seas and back to the port of origin, is it necessary
that the vessel be endorsed for the coastwise trade?
- 2 -
ISSUE:
What are the implications of and requirements for
documentation of a vessel under United States law with
endorsements for pleasure use as well as foreign and coastwise
trades.
LAW AND ANALYSIS:
The vessel documentation laws of the United States provide
that a vessel which is owned by a citizen and which is at least 5
net tons may be documented. Five different "endorsements" are
possible on a document, three of which are the registry,
recreational, and coastwise endorsements which are the subject of
the present inquiry.
A registry may be issued to any vessel documented under
United States law and allows the vessel to be employed in foreign
trade. A recreational endorsement, likewise, may be issued to
any U.S.-documented vessel, and permits the vessel to be used for
pleasure (non-commercial) purposes only. A coastwise endorsement
may be issued to a U.S.-documented vessel which is built in this
country and which has never been under foreign ownership or
documentation. An endorsement for coastwise trade permits a
vessel to be used to transport persons or merchandise from one
coastwise point to another. The documentation laws specify that
a vessel may hold multiple endorsements.
The coastwise laws of the United States extend to the 50
States and Puerto Rico, including the navigable inland waters and
the three mile territorial waters adjacent to those areas. The
United States Virgin Islands are specifically excluded from
consideration under the coastwise laws by statute (46 U.S.C. App.
877). Therefore, the use of a vessel in commercial trade between
points in Puerto Rico or within the three mile territorial waters
there would require a document with a coastwise endorsement. The
use of a vessel in trade between points in the U.S. Virgin
Islands or between a point in Puerto Rico and points in the U.S.
Virgin Islands may be accomplished without the issuance of a
coastwise endorsement.
A vessel which departs from a coastwise point, proceeds
beyond the territorial waters, does not stop even temporarily at
any other coastwise point, and returns to the point of departure
is said to be engaged in a voyage to nowhere. Since there is but
a single United States point involved in such an itinerary, there
are no coastwise trade implications and a coastwise endorsement
is not required.
- 3 -
A vessel which is chartered out with a crew supplied as part
of the charter agreement is said to be "time" or "voyage"
chartered. Under such a charter agreement, the persons
transported aboard the vessel, other than the crew, are
considered to be passengers for purposes of the coastwise laws.
Their carriage between United States points is commercial trade
which would require that the transporting vessel be documented
with a coastwise endorsement.
In relating the foregoing to the questions posed in this
matter, we are able to state the following.
1. Since the law provides that a vessel may be documented with
more than one endorsement, there is no restriction regarding the
use of a vessel with recreational, registry, and coastwise
endorsements being employed part of the time in recreational uses
and part of the time in commercial uses.
2. A coastwise endorsement would be necessary for a vessel under
time or voyage charter to operate legally within the waters of
Puerto Rico. Such a vessel could operate within the waters of
the U.S. Virgin Islands without a coastwise endorsement, but
would need a registry endorsement since the charter agreement
would place the vessel outside of the permissible uses for a
recreational vessel.
3. Likewise, a coastwise endorsement would not be required for a
vessel engaging in a bona fide voyage to nowhere, but it would be
necessary that the vessel have a registry endorsement for
engagement in the commercial carriage of passengers under a time
or voyage charter.
HOLDING:
Our determinations in this matter are reported in the Law
and Analysis portion of this ruling.
Sincerely,
Arthur P. Schifflin
Chief
Carrier Rulings Branch