VES-3-01-OT:RR:BSTC:CCI H200704 WRB
Kenton D. Wohl
14290 Jarvi Drive
Anchorage, AK 99515
RE: Coastwise Transportation; Research; 46 U.S.C. § 55102
Dear Mr. Wohl:
This letter is in response to your correspondence dated January 17, 2012, in which you inquire about whether a non-coastwise-qualified vessel may be used to transport passengers and scientific equipment to conduct marine bird and mammal research in Prince William Sound, Alaska, without violating 46 U.S.C. § 55102, or 46 U.S.C. § 55103. Our ruling on your request follows.
FACTS
In your correspondence, you state that the M/V PRIVATEER will be used to transport up to 6 passengers and their scientific equipment to conduct primarily marine bird and mammal research in Prince William Sound (PWS), Alaska. The specifics you have provided indicate that the M/V PRIVATEER is a vessel of 24 net registered tons, 45 feet in length, 14.9 feet on the beam, with a 6.8’draft, built on the island of Taiwan in 1980. The vessel is documented with the United States Coast Guard and carries a recreational endorsement. You assert in your correspondence that you do not intend to utilize the PRIVATEER to engage in tourism-related activities such as sport fishing or sightseeing.
The types of research activities you anticipate conducting on board the vessel consist of nearshore “at-sea” seabird and marine mammal population surveys. The vessel will also be used as a base of operations to permit the researchers to sleep and eat aboard while conducting research activities occurring onshore. The research equipment you anticipate transporting includes field camp items, such as tents, platforms, cooking gear, fuel, generator sets, food, inflatable boats and outboard motors, as well as more specialized research equipment such as bird banding and satellite tags, binoculars and spotting telescopes, climbing equipment, radios, and electronics.
You estimate devoting as much as 60 days of vessel time to research activities in 2012 and approximately 100 days in 2013-17. The window for field research in PWS is approximately 120 days, generally occurring between May 1 and end of August. There will be about a 90 day charter period required during between January and March 2013-14.
The rest of the vessel time will be devoted to implementing volunteer projects, including a beach clean-up program and a beached bird survey program. You also state that you anticipate that halibut fishing will also take place on board during the volunteer efforts. You also indicate that there are several research charter opportunities available in the PWS region in 2012 with Universities, a nonprofit organization, and the Federal Government, but that you have not yet secured a charter.
ISSUE
Whether the proposed operation constitutes an engagement in coastwise trade for purposes of 46 U.S.C. § 55102 and/or 46 U.S.C. § 55103?
LAW AND ANALYSIS
a. Recreational Endorsement:
You state the vessel is documented with the United States Coast Guard and carries a recreational endorsement. Title 46 United States Code § 12102 provides, in pertinent part, “[e]xcept as otherwise provided, a vessel may engage in a trade only if the vessel has been issued a certificate of documentation with an endorsement for that trade under this chapter. See 46 USC § 12102(a). The permissible activities under a recreational endorsement are discussed in 46 USC § 12114, which provides, in pertinent part, “(b) Authorized activity. A vessel operating under a recreational endorsement may be operated only for pleasure.” See 46 USC § 12114(b). As we discussed in Customs Ruling HQ 113088, dated November 16, 1994, a recreational endorsement may be issued to any U.S.-documented vessel, and permits the vessel to be used for pleasure (non-commercial) purposes only. As you state that you intend to use the vessel to engage in research pursuant to charters, your proposed use of the subject vessel is commercial in nature. In accordance with the provisions of 46 USC § 12102 and 46 USC § 12114, a vessel carrying only a recreational endorsement may not engage in commercial activities.
It is noteworthy, however, that in Customs ruling HQ 113461, dated, June 8, 1995, we determined that a non-coastwise qualified vessel issued a certificate of documentation from the U.S. Coast Guard with a registry endorsement may engage in oceanographic research in United States territorial waters. Accordingly, were the subject vessel to be re-documented with a registry endorsement, the prohibition on recreationally endorsed vessels participating in commercial activities would not apply.
b. Transportation of Personnel:
The coastwise law applicable to the carriage of passengers is found in 46 U.S.C. § 55103 (recodified by Pub. L. 109-304, enacted on October 6, 2006) and provides that:
(a) In General. Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not transport passengers between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel-
is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and
has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement.
(b) Penalty. The penalty for violating subsection (a) is $300 for each passenger transported and landed.
Section 4.50(b), Customs and Border Protection (“CBP”) Regulations (19 CFR § 4.50(b)) provides as follows:
A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation, navigation, ownership, or business of the vessel.
With regard to your intent to transport passengers to conduct marine bird and mammal research in Prince William Sound, Alaska, a legal notice published in the June 5, 2002, Customs Bulletin, in precise concert with the protectionist nature of section 46 U.S.C. § 55103, imposed a circumscribed construction as to the meaning of the term “passenger” under section 55103. Under this strict interpretation of the term “passenger,” as finalized in the June 5, 2002, Customs Bulletin notice, persons transported on a vessel are considered passengers unless they are “directly and substantially” connected with the operation, navigation, ownership or business of that vessel itself. See e.g., HQ 110967, dated April 12, 1990 (finding that persons on commercial (non-pleasure) vessels are considered passengers unless they enjoy some status which ties them “intimately” to the operation, navigation, ownership or business of the vessel itself).
In Customs ruling HQ H010661, dated May 4, 2007, we reiterated our longstanding position that the use of a vessel solely to engage in oceanographic research is not coastwise trade, citing HQ 110399, dated Aug. 23, 1989; HQ 109815, dated Dec. 5, 1988; and, HQ 109344, dated July 6, 1988. We have previously held that the use of non-coastwise-qualified vessels to engage in oceanographic research, including the transportation of persons participating in such research to, from, and between research sites in United States territorial waters, whether or not the persons participating in the research temporarily leave the vessels at the research sites, would not violate the coastwise laws. Furthermore, we have held that the collection of marine specimens at the research sites and the transportation of those specimens from the research sites to points in the United States would not violate the coastwise laws, citing HQ 113461, dated June 8, 1995; and HQ 112122, dated July 22, 1992.
Similarly, in Customs ruling HQ H018859, dated November 13, 2007, we determined that the transportation of ecologists aboard non-coastwise-qualified cruise vessels for the purposes of recording separation distances between vessels and whales using laser rangefinder binoculars while simultaneously recording these conditions, including variability in vessel speed, associated with the whale fatalities did not constitute coastwise transportation violation of 46 U.S.C. § 55103.
This interpretation of the coastwise laws is buttressed by the Act of July 30, 1965, also known as the “Oceanographic Research Vessel Act,” provides that, “An oceanographic research vessel shall not be deemed to be engaged in trade or commerce.” This act, in defining the term “oceanographic research vessel,” defines oceanographic research as “...including, but not limited to, such studies pertaining to the sea as seismic, gravity meter and magnetic exploration and other marine geophysical or geological surveys, atmospheric research, and biological research.” 46 U.S.C. § 2101(18).
We are of the opinion that the activities described in the FACTS section supra constitute to type of biological research contemplated in the Oceanographic Research Vessel Act and are of the sort of activities which we have previously determined to be oceanographic research of the type in which a non-coastwise-qualified vessel may engage. Accordingly, a non-coastwise-qualified vessel may transport persons participating in such research to, from, and between research sites in United States territorial waters, whether or not the persons participating in the research temporarily leave the vessels at the research sites, provided it carries a registry endorsement. Of course, if such a vessel transported between coastwise points, or provided any part of such transportation, of any persons other than the vessel crew, persons engaging in oceanographic research and students receiving instruction in such research, the coastwise laws would be violated.
c. Transportation of Research Equipment:
The Jones Act, 46 U.S.C. § 55102, states that “a vessel may not provide any part of the transportation of merchandise by water, or by land and water, between points in the United States to which the coastwise laws apply, either directly or via a foreign port” unless the vessel was built in and documented under the laws of the United States and owned by persons who are citizens of the United States. (See also 19 CFR §§ 4.80, 4.80b). Such a vessel, after it has obtained a coastwise endorsement from the U.S. Coast Guard, is said to be “coastwise qualified.” The coastwise laws generally apply to points in the territorial sea, which is defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline.
U.S. Customs and Border Protection (“CBP”) Regulations promulgated under the authority of 46 U.S.C. § 55102 provide that a coastwise transportation of merchandise takes place when merchandise laden at a coastwise point is unladen at another coastwise point, regardless of origin or ultimate destination. See 19 CFR § 4.80b(a). Pursuant to 19 U.S.C. § 1401(c), the word “merchandise” is defined as “goods, wares, and chattels of every description, and includes merchandise the importation of which is prohibited, and monetary instruments as defined in section 5312 of Title 31.”
In Customs ruling HQ H010661, dated May 4, 2007, we reiterated our longstanding position that the use of a vessel solely to engage in oceanographic research is not coastwise trade, citing HQ 110399, dated Aug. 23, 1989; HQ 109815, dated Dec. 5, 1988; and, HQ 109344, dated July 6, 1988. Furthermore, we have held that the collection of marine specimens at the research sites and the transportation of those specimens from the research sites to points in the United States would not violate the coastwise laws, citing HQ 113461, dated June 8, 1995; and HQ 112122, dated July 22, 1992.
You state that the vessel will be used to transport the scientific equipment used by researchers to conduct primarily marine bird and mammal research in Prince William Sound (PWS), Alaska. The equipment you anticipate transporting includes field camp items, such as tents, platforms, cooking gear, fuel, generator sets, food, inflatable boats and outboard motors, as well as more specialized research equipment such as bird banding and satellite tags, binoculars and spotting telescopes, climbing equipment, radios, and electronics. In Customs Ruling HQ H010661, dated May 4, 2007, we determined that the transportation of equipment and materials necessary to complete oceanographic research in the form of deploying ocean floats and NOAA surface drifters was not violative of the coastwise laws. Similarly, in Customs Ruling HQ H008902, dated May 17, 2007, we determined that the transportation aboard a non-coastwise qualified vessel of the equipment and supplies necessary for oceanographic research, from the point where they were loaded onto the vessel to the points where they were unloaded from the vessel, did not violate the merchandise coastwise law, 46 U.S.C. § 55102. Accordingly, we are of the opinion that the research equipment described in the FACTS section supra to be transported aboard the subject vessel is not merchandise within the meaning of 19 U.S.C. § 1401(c). Consequently, the coastwise transportation of such research equipment is not in violation of 46 U.S.C. § 55102. Of course, if such a vessel transported between coastwise points, or provided any part of such transportation, of any merchandise other than the usual supplies and equipment necessary for the research and/or research specimens or samples, the coastwise laws would be violated.
d. Transportation of Volunteers:
In your correspondence you have indicated that you intend to use the subject vessel for volunteer projects when not engaged in research activities. Such volunteer projects include a beach clean-up program and a beached bird survey program. With regard to your intent to transport volunteers to conduct beach clean-up and beached bird survey programs, a legal notice published in the June 5, 2002, Customs Bulletin, in precise concert with the protectionist nature of section 46 U.S.C. § 55103, imposed a circumscribed construction as to the meaning of the term “passenger” under section 55103. Under this strict interpretation of the term “passenger,” as finalized in the June 5, 2002, Customs Bulletin notice, persons transported on a vessel are considered passengers unless they are “directly and substantially” connected with the operation, navigation, ownership or business of that vessel itself. See e.g., HQ 110967 (Apr.12, 1990) (finding that persons on commercial (non-pleasure) vessels are considered passengers unless they enjoy some status which ties them “intimately” to the operation, navigation, ownership or business of the vessel itself).
Accordingly, given the clear language of § 4.50(b), “[p]ersons carried on a vessel may be classified as passengers even though they are not carried for hire and though they are employed by or for the benefit of the [vessel] owner or operator,” citing Customs ruling HQ 101699, dated November 5, 1975. Additionally, we have held that, “[p]ersons who are on board a vessel solely to perform functions after the vessel’s arrival at its destination have consistently been held to be passengers within the meaning of section 4.50(b)” Citing HQ 104260, dated October 16, 1979 (emphasis added)), see also, HQ 103318, dated April 5, 1978; HQ 105761, dated August 27, 1982, and HQ 116721, dated September 25, 2006.
In HQ H020051, dated Dec. 4, 2007, CBP held that individuals transported between coastwise points to engage in removing and maintenance of scientific equipment for the purpose of a research project which involved collecting data that is used for marine forecasting, climate modeling, and safety at sea were passengers. CBP reasoned that those activities did not connect the individuals directly and substantially with the business, operation, or navigation of the vessel itself.
We are of the opinion that the activities of the persons to be carried aboard the subject vessel to conduct beach clean-up and beached bird survey programs do not enjoy a status which ties them “intimately” to the operation, navigation, ownership or business of the vessel itself and would be carried onboard solely to perform functions after the vessel’s arrival at its destination. Such a proposed use of the vessel consists of the coastwise transportation of passengers. Accordingly, we find that the proposed use of the vessel as described above to transport passengers to conduct beach clean-up and beached bird survey programs would be in violation of 46 U.S.C. § 55103.
e. Fishing:
You also state that you anticipate that halibut fishing will also take place on board during the volunteer efforts. Pursuant to Title 46, United States Code, section 108, (46 U.S.C. § 108), “fisheries” includes the “processing, storing, and transporting (except in foreign commerce), planting, cultivating, catching, taking, or harvesting fish, shellfish, marine animals, pearls, shells, or marine vegetation in the navigable waters of the United States or in the exclusive economic zone.” The EEZ is defined in Presidential Proclamation 5030 of March 10, 1983 (48 FR 10605), as extending outward for 200 nautical miles from the baseline from which the territorial sea is measured. Only a vessel with a fishery endorsement may engage in the fisheries. See 46 U.S.C. § 12113(b).
However, 46 U.S.C. § 12113 further provides, in pertinent part, that a fishery endorsement may only be issued for a vessel that was either built in the United States; or, if rebuilt, was rebuilt in the United States. 46 U.S.C. § 12113(a). As you indicate that the subject vessel was originally built on the island of Taiwan, and do not indicate that it was rebuilt in the United States, we are of the opinion that it is not eligible for a fishery endorsement. Accordingly, the use of the subject vessel to engage in non-recreational fishing activities would be a violation of 46 U.S.C. § 12113.
F. Non-Research Vessel Use:
You estimate that the percentage of vessel operational time in the May-September period that will be devoted to research activities to be about 50%-75%. As we discussed in Customs ruling HQ 113088, dated November 16, 1994, a vessel may hold multiple endorsements. Since a vessel may be documented with more than one endorsement, there is no restriction regarding the use of a vessel with recreational and registry endorsements being employed part of the time in recreational uses and part of the time in permissible commercial uses. Accordingly, it is our opinion that, were the vessel re-documented with a registry endorsement as discussed in section a., supra, there would be no restriction upon its use for recreational purposes for the period of time when the vessel is not employed in oceanographic research.
HOLDINGS:
In accordance with the Law and Analysis section of this ruling, the proposed use of the subject vessel as described in the FACTS section above constitutes commercial activity, in which a vessel with only a recreational endorsement may not engage without violating 46 USC § 12102. However, re-documentation of the vessel with a registry endorsement would permit the use of the vessel for commercial activities.
In accordance with the Law and Analysis section of this ruling, the use of the subject non-coastwise-qualified vessel to transport individuals who will be engaged in oceanographic research is permissible under the coastwise laws, provided the vessel is re-documented with a registry endorsement.
In accordance with the Law and Analysis section of this ruling, the use of the subject non-coastwise-qualified vessel to transport oceanographic research equipment is permissible under the coastwise laws, provided the vessel is re-documented with a registry endorsement.
In accordance with the Law and Analysis section of this ruling, the proposed use of the subject vessel as described above to transport passengers to conduct beach clean-up and beached bird survey programs constitutes an engagement in the coastwise trade in violation of 46 U.S.C. § 55103.
In accordance with the Law and Analysis section of this ruling, the proposed use of the subject vessel as described above to engage in non-recreational fishing activities constitutes an engagement in the fisheries in violation of 46 U.S.C. § 12113
In accordance with the Law and Analysis section of this ruling, the proposed use of the subject vessel as described above to engage part of the time in oceanographic research activities and part of the time in recreational activities is not a violation of the coastwise laws, provided the vessel is re-documented with a registry endorsement.
Sincerely,
George Frederick McCray
Supervisory Attorney-Advisor/Chief
Cargo Security, Carriers and Immigration Branch
Office of International Trade, Regulations & Rulings
U.S. Customs and Border Protection