VES-3-02-CO:R:IT:C 113259 GEV
Paul S. Array
Director
American Cruise Lines, Inc.
819 Peacock Plaza
Suite 610
Key West, Florida 33040
RE: Coastwise Trade; Passengers; Voyage-to-nowhere;
M/V TECUMSEH; 46 U.S.C. App. 289
Dear Mr. Array:
This is in response to your letter of October 21, 1994,
requesting a ruling regarding the proposed use of the above-
referenced vessel. Our ruling on this matter is set forth below.
FACTS:
The M/V TECUMSEH is a U.S.-built passenger vessel which was
operated in the Detroit area under the U.S.-flag from 1984 until
1993. In 1993 the vessel's owners removed her from U.S. registry
and placed her in Canadian registry where she remained for less
than a year. The vessel never actually operated under her Canadian
registry but nonetheless lost her lawful right to engage in the
U.S. coastwise trade as a result of it.
In August of 1994, American Cruise Lines, Inc. purchased the
M/V TECUMSEH and subsequently removed her from Canadian registry
and re-documented her under the U.S. flag. The vessel re-entered
the U.S. at Detroit and was delivered to Fort Lauderdale, Florida,
where she now lies.
American Cruise Lines, Inc. attempted to have the vessel's
coastwise trade privileges restored through a legislatively enacted
waiver. Although the Congressional bill to which the waiver was
attached did pass the House of Representatives, it was not attended
to by the Senate before its adjournment for the 1994 session. As
a result, notwithstanding the fact that the bill may be re-
introduced in the next session of Congress and may eventually be
passed in 1995, the vessel will continue to be ineligible to engage
in the coastwise trade until such time as passage of the waiver
occurs.
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The above-referenced legislative delay has prompted American
Cruise Line, Inc. to request that the M/V TECUMSEH be permitted to
begin operation this winter tourist season in a limited manner in
the coastwise trade pending passage of the aforementioned waiver.
Specifically, it is proposed to use the vessel for short (2 to 4
hour) sightseeing/party excursions taking passengers from and
returning them to the vessel's regular berth in Key West, Florida.
The vessel will make no other stops during these excursions; she
will call at no other port during her commercial operations other
than her home port. No passengers will embark or disembark at any
other place other than the vessel's berth in Key West.
The subject vessel is presently being re-certified by the U.S.
Coast Guard for operation in the partially protected waters of the
Key West area. It is requested that the vessel be allowed to
cruise just 1/2 mile from Key West during the excursions described
above as it is felt that this distance is more prudent for this
type of ride, however, it can cruise at a further distance if deem
necessary by Customs.
ISSUE:
Whether the transportation of passengers aboard a non-
coastwise-qualified vessel solely within the 3-mile U.S.
territorial sea, even though the passengers disembark at their
point of embarkation without going ashore at any other coastwise
point, constitutes a "voyage-to-nowhere" thereby obviating the
applicability of 46 U.S.C. App. 289.
LAW AND ANALYSIS:
Title 46, United States Code Appendix, 289 (46 U.S.C. App.
289, the passenger coastwise law) as interpreted by the Customs
Service, prohibits the transportation of passengers between points
in the United States embraced within the coastwise laws, either
directly or by way of a foreign port, in a non-coastwise-qualified
vessel (i.e., any vessel that is not built in and documented under
the laws of the United States, and owned by persons who are
citizens of the United States). For purposes of 289, "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." (19 CFR 4.50(b)) Section 4.80a, Customs
Regulations (19 CFR 4.80a) is interpretive of 289.
Parenthetically, we note that 46 U.S.C. App. 289 is
interpreted in pari materia with title 46, United States Code
Appendix, 883 (46 U.S.C. App. 883, the coastwise merchandise
law often called the "Jones Act"), the first proviso of which - 3 -
provides, "[t]hat no vessel having at any time acquired the lawful
right to engage in the coastwise trade, either by virtue of having
been built in, or documented under the laws of the
United States, and later sold foreign in whole or in part, or
placed under foreign registry, shall hereafter acquire the right
to engage in the coastwise trade." (emphasis added)
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 (29 O.A.G.
318 (1912)). 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 passengers' embarkation, is
considered coastwise trade (T.D. 55193(2)).
In interpreting the coastwise laws, Customs has ruled that a
point in United States territorial waters is a point in the United
States embraced within the coastwise laws. The territorial waters
of the United States consist of the territorial sea, defined as the
belt, 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.
In regard to the proposed use of the M/V TECUMSEH, the
transportation of passengers on sightseeing/party excursions from
the vessel's berth in Key West and returning to the same point
without stopping at any other coastwise port would not violate 46
U.S.C. App. 289 provided the vessel proceeds to the high seas
(see discussion above on the criteria to be met for a valid
"voyage-to-nowhere"). Absent transportation of the passengers to
the high seas at some point during each voyage, the proposed
excursions would be in violation of 46 U.S.C. App. 289.
HOLDING:
The transportation of passengers aboard a non-coastwise-
qualified vessel solely within the 3-mile U.S. territorial sea,
even though the passengers disembark at their point of embarkation
without going ashore at any other coastwise point,
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does not constitute a "voyage-to-nowhere" and therefore is
violative of 46 U.S.C. App. 289. No violation of the
aforementioned statute would occur if at any time during such
transportation the vessel proceeds beyond the limits of the U.S.
territorial sea.
Sincerely,
Arthur P. Schifflin
Chief