VES-3-02-OT:RR:BSTC:CCR HQ H279098 PF
William N. Myhre
K&L Gates LLP
1601 K Street, NW
Washington, DC 20006
RE: Coastwise Transportation of Passengers; 46 U.S.C. §§ 55103 and 55104; 19 C.F.R. §§ 4.50(b) and 4.80a.
Dear Mr. Myhre:
This letter is in response to your correspondence of August 11, 2016 and subsequent emails, with regard to proposed cruise itineraries for the M/V VIKING STAR, VIKING SEA, and VIKING SKY (the "vessels"). Our decision follows.
FACTS
The proposed vessel itinerary for the M/V VIKING STAR begins with passengers embarking in New York, New York on October 14, 2016 and disembarking in San Juan, Puerto Rico on October 18, 2016 with no intervening port calls. In addition, your ruling request notes that some of the passengers on the M/V VIKING STAR will not disembark immediately in San Juan, but will continue to several Caribbean ports, including St. Thomas in the U.S. Virgin Islands, and disembark in San Juan, Puerto Rico.
The proposed vessel itineraries for the M/V VIKING SEA and the M/V VIKING SKY begin with passengers embarking in New York, New York and disembarking in San Juan, Puerto Rico with no intervening port calls. In addition, you note that some of the passengers on the M/V VIKING SEA AND M/V VIKING SKY will not disembark immediately in San Juan, but will continue to several Caribbean ports, including St. Thomas in the U.S. Virgin Islands, and disembark in San Juan, Puerto Rico.
ISSUES
1. Whether the proposed itinerary to transport passengers aboard the M/V VIKING STAR, embarking in New York, New York and disembarking in San Juan, Puerto Rico, violates 46 U.S.C. § 55103?
2. Whether the proposed itinerary to transport passengers aboard the M/V VIKING STAR, embarking in New York, New York, continuing on to several Caribbean ports, including St. Thomas, U.S. Virgin Islands, and disembarking in San Juan, Puerto Rico, violates 46 U.S.C. § 55103?
3. Whether the proposed itinerary to transport passengers aboard the M/V VIKING SEA AND M/V VIKING SKY, embarking in New York, New York and disembarking in San Juan, Puerto Rico, violates 46 U.S.C. § 55103?
4. Whether the proposed itinerary to transport passengers aboard the M/V VIKING SEA AND M/V VIKING SKY, embarking in New York, New York, continuing on to several Caribbean ports, including St. Thomas, U.S. Virgin Islands, and disembarking in San Juan, Puerto Rico, violates 46 U.S.C. § 55103?
LAW AND ANALYSIS
Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. 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. The coastwise law applicable to the carriage of passengers is found at 46 U.S.C. § 55103 which provides:
(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-
(1) is wholly owned by citizens of the United States for purposes of engaging in coastwise trade; and
(2) 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) of the Customs and Border Protection (“CBP”) Regulations provide:
A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of the vessel, her navigation, ownership, or business.
Pursuant to 46 U.S.C. § 55104(b), “[e]xcept as otherwise provided in this section, a vessel not qualified to engage in the coastwise trade may transport passengers between a port in Puerto Rico and another port in the United States.” The regulations promulgated under the authority of § 55104(b) further provide:
An exception to the prohibition in this section is the transportation of passengers between ports in Puerto Rico and other ports in the U.S. on passenger vessels not qualified to engage in the coastwise trade. Such transportation is permitted until there is a finding under 46 U.S.C. 55104 that a qualified U.S.-flag passenger vessel is available for such service.
See also HQ H242538 (Jun. 20, 2013); HQ H186131 (Sept. 28, 2011); HQ H248285 (Dec. 18, 2013).
In addition, pursuant to 46 U.S.C. § 55101(b)(3), the coastwise laws do not apply to "the Virgin Islands until the President declares by proclamation that the coastwise laws apply to the Virgin Islands." See also HQ H006044 (Jan. 30, 2007) and HQ H137215 (Dec. 10, 2010).
Issues 1 and 3
Your company proposes to embark passengers in New York, New York and disembark them in San Juan, Puerto Rico. Pursuant to 46 U.S.C. § 55104(b), "[e]xcept as otherwise provided in this section, a vessel not qualified to engage in the coastwise trade may transport passengers between a port in Puerto Rico and another port in the United States." To date, no qualified U.S.-flag passenger vessel service between ports in Puerto Rico and other ports in the U.S. exists. Accordingly, the M/V VIKING STAR, M/V VIKING SEA, and the M/V VIKING SKY, as non-coastwise qualified vessels, may transport passengers between New York, New York and San Juan, Puerto Rico. Therefore, the proposed itinerary, in which passengers embark at New York, New York and disembark at San Juan, Puerto Rico, is not a violation of the coastwise laws pursuant to 46 U.S.C. § 55104(b) and 19 C.F.R. § 4.80a(c).
Please note that pursuant to 19 C.F.R. § 4.80a(a)(4) the term “disembark” is “not applicable to a passenger going ashore temporarily at a coastwise port and reboards the vessel and departs with it on sailing from the port.” Accordingly, should passengers transported to Puerto Rico under the subject itinerary reboard the M/V VIKING STAR, M/V VIKING SEA, or the M/V VIKING SKY and disembark at a coastwise point other than Puerto Rico, regardless if they are using different tickets, that transportation would be in violation of 46 U.S.C. § 55103.
Issues 2 and 4
Your company proposes to embark passengers in New York, New York, continue to Caribbean ports, including St. Thomas, U.S. Virgin Islands, and disembark in San Juan, Puerto Rico. As noted, no qualified U.S.-flag passenger vessel service between ports in Puerto Rico and other ports in the U.S. exists. In addition, the President of the United States has not declared by proclamation that the coastwise laws extend to the U.S. Virgin Islands. Therefore, the proposed itineraries from New York, New York to St. Thomas and St. Thomas to San Juan, Puerto Rico, would not constitute a violation of 46 U.S.C. § 55103.
HOLDING
1. The proposed itinerary to transport passengers aboard the M/V VIKING STAR, embarking in New York, New York and disembarking in San Juan, Puerto Rico, does not constitute a violation of 46 U.S.C. § 55103.
2. The proposed itinerary to transport passengers aboard the M/V VIKING STAR, embarking in New York, New York, continuing on to several Caribbean ports, including St. Thomas, U.S. Virgin Islands, and disembarking in San Juan, Puerto Rico, does not constitute a violation of 46 U.S.C. § 55103.
3. The proposed itinerary to transport passengers aboard the M/V VIKING SEA AND M/V VIKING SKY, embarking in New York, New York and disembarking in San Juan, Puerto Rico, does not constitute a violation of 46 U.S.C. § 55103.
4. The proposed itinerary to transport passengers aboard the M/V VIKING SEA AND M/V VIKING SKY, embarking in New York, New York, continuing on to several Caribbean ports, including St. Thomas, U.S. Virgin Islands, and disembarking in San Juan, Puerto Rico, does not constitute a violation of 46 U.S.C. § 55103.
Sincerely,
Lisa L. Burley
Chief/Supervisory Attorney-Advisor
Cargo Security, Carriers and Restricted Merchandise Branch
Office of Trade, Regulations and Rulings