VES-3-02:OT:RR:BSTC:CCR H307740 AMW
Ms. Anne E. Mickey, Esq.
Mr. Jeff R. Vogel, Esq.
Cozen O’Connor P.C.
1200 19th St., NW
Washington, DC 20036
RE: [ ]; [ ]; [ ]; [ ]; Tendering; Excursion Vessels; Inflatable Boats; 46 U.S.C. § 55103; 19 CFR §§ 4.80 and 4.80a.
Dear Ms. Mickey and Mr. Vogel:
This is in response to your August 1, 2019 letter, in which you request a ruling on behalf of your client, [ ] (hereinafter “the cruise line”), regarding the proposed use of non-coastwise-compliant vessels to transport passengers between coastwise points in [ ]. Our ruling is set forth below.
FACTS
The following facts are from your ruling request and subsequent follow-up communications with U.S. Customs and Border Protection (“CBP”). The subject cruise line is a non-United States company that owns and operates the following foreign-flag vessels: [ ] (hereinafter “the cruise vessels”). The cruise line offers voyages on the cruise vessels between points in [ ] and nearby foreign ports (e.g., [ ]) as well as between [ ] and distant foreign ports (e.g., [ ]). The cruise line is currently planning its 2020 and 2021 seasons, which will have various departures between [ ] of 2020, and between [ ] of 2021.
During the upcoming season, the cruise line seeks to offer [ ] excursions in remote areas of [ ] waters using Zodiac-brand boats deployed from the cruise vessels. Accordingly, you state that the Zodiacs will be used in two manners: (1) transporting passengers from anchored cruise vessels to shore (i.e., use as tenders), and (2) transporting passengers from anchored cruise vessels to various sightseeing points while the passengers remain onboard the craft before returning to the cruise vessel (i.e., use as excursion vessels). You have provided the coordinates of twelve locations throughout [ ] where the Zodiac crafts will be used to transport passengers to shore. At these locations, you state that it is not safe or feasible for the cruise vessels to berth at a pier. Instead, you state that, because these are remote areas with no berthing facilities available, the Zodiac vessels will disembark passengers by beaching. You have also provided the coordinates for six locations at which the Zodiacs will be used as excursion vessels. At these locations, you state that passengers will not be transported to shore due to infrastructure, regulatory restrictions, and/or safety and environmental concerns.
According to your submission, the Zodiacs are U.S.-made inflatable crafts that will be manned by U.S. citizens and can carry up to 10-12 passengers. The Zodiacs are less than five net tons, and, as a result, are not eligible for U.S. documentation. Nevertheless, the Zodiacs are not otherwise eligible to be coastwise-qualified because they are owned by the cruise line’s direct U.S. subsidiary, which is a foreign limited liability company. The zodiacs will arrive in and depart from the U.S. aboard the cruise vessels.
ISSUE
Whether the use of the non-coastwise-qualified Zodiacs as tenders to transport passengers from cruise vessels anchored in U.S. waters to shore constitutes a violation of 46 U.S.C. § 55103 and 19 CFR § 4.80.
Whether the use of the non-coastwise qualified Zodiacs to transport passengers from cruise vessels anchored in U.S. waters on various excursions before returning them directly to the cruise vessels constitutes a violation of 46 U.S.C. § 55103 and 19 CFR § 4.80.
LAW AND ANALYSIS
Generally, the coastwise laws prohibit the transportation of passengers 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 transportation of passengers is found in 46 U.S.C. § 55103 (referred to as the “Passenger Vessel Services Act” or “PVSA”), which provides, in relevant part:
(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.
The penalty for transporting passengers in violation of 46 U.S.C. § 55103 is $798 for each passenger transported and landed.
Similarly, 19 CFR § 4.80 provides, in pertinent part:
(a) No vessel shall transport, either directly or by way of a foreign port, any passenger or merchandise between points in the United States embraced within the coastwise laws, including points within a harbor, or merchandise for any part of the transportation between such points, unless it is:
Owned by a citizen and is so documented under the laws of the United States as to permit it to engage in coastwise trade….
In addition, 19 CFR § 4.80a(b) provides, in pertinent part:
(b) The applicability of the coastwise law (46 U.S.C. § 55103) to a vessel not qualified to engage in the coastwise trade (i.e., either a foreign-flag vessel or a U.S.-flag vessel that is foreign-built or at one time has been under foreign flag) which embarks a passenger at a coastwise port is as follows:
If the passenger is on a voyage solely to one or more coastwise ports and the passenger disembarks or goes ashore temporarily at a coastwise port, there is a violation of the coastwise law.
If the passenger is on a voyage to one or more coastwise ports and a nearby foreign port or ports (but at no other foreign port) and the passenger disembarks at a coastwise port other than the port of embarkation, there is a violation of the coastwise law.
If the passenger is on a voyage to one or more coastwise ports and a distant foreign port or ports (whether or not the voyage includes a nearby foreign port or ports) and the passenger disembarks at a coastwise port, there is no violation of the coastwise law provided the passenger has proceeded with the vessel to a distant foreign port.
With regard to the subject Zodiacs, we note that qualified vessels of less than five net tons are not precluded from engaging in the coastwise trade simply because they cannot be documented under the laws of the United States. Section 4.80(a), U.S. Customs Regulations (19 CFR § 4.80(a)) establishes the vessels that are qualified to engage in the coastwise trade. Subparagraph (2) of this section (19 CFR § 4.80(a)(2)) provides that no vessel exempt from documentation (e.g., weighing less than five net tons) shall transport any passengers or merchandise between United States coastwise points unless the vessel is owned by a citizen of the United States and is entitled to or, except for its tonnage, would be entitled to be documented with a coastwise license. As noted above, you have confirmed that, by virtue of their ownership, the subject Zodiac vessels would not be entitled to a coastwise endorsement.
As noted above, the itineraries contemplate two distinct transportation patterns: one in which the Zodiacs will be used to transport passengers from the cruise vessels to shore (i.e., “tendering”), and one in which passengers will remain on the Zodiacs before returning to the cruise vessels (i.e., use as “excursion vessels”). This ruling analyzes each transportation pattern.
Tendering
The first transportation pattern discussed in your request involves the use of non-coastwise-qualified Zodiacs as tenders to transport passengers from the cruise vessels to shore and back. In the past, CBP has held that the use of non-coastwise-qualified vessels as tenders in U.S. territorial waters is permissible under limited circumstances. Beginning with Customs Ruling 106114 (Apr. 7, 1983), CBP has held that the use of non-coastwise-qualified vessels as tenders in U.S. territorial waters is permissible when four conditions are met: (1) the tenders must arrive in U.S. territorial waters on board the cruise vessel; (2) the tenders must be used solely to carry the passengers between the shore and the cruise vessel; (3) the tenders must be used solely in such carriage where the CBP Port Director is satisfied that it is not safe or feasible for the cruise vessel to berth at a pier; and, (4) the tenders must depart U.S. territorial waters on board the cruise vessel. See also, HQ H265199 (June 24, 2015); HQ 112799 (July 13, 1993); HQ 112039 (Jan. 6, 1992); HQ 109025 (Aug. 20, 1987). We held in HQ 112039, “[a]bsent any one of these conditions, the transportation of passengers by a non-coastwise-qualified life boat between the cruise vessel in U.S. territorial waters and a point on shore would be in violation of 46 U.S.C. App. 289.
The tendering operations described in your request are compliant with the four conditions outlined above. With respect to the first criterion, you have confirmed that the subject Zodiac vessels will arrive in U.S. territorial waters onboard the cruise vessels. Second, you confirm that the tenders will be used to “transport passengers directly to shore….” (You have further clarified that the Zodiacs will not be used to transport passengers between points on land.) Third, this office has confirmed with the Area Port of [ ] that the proposed tendering locations do not contain safe or suitable infrastructure for the cruise vessels themselves to dock. Fourth, you have confirmed that the tenders will depart U.S. territorial waters on board the cruise vessels.
Based on the information above, we find the use of foreign-owned Zodiacs carried on board the above-described cruise vessels to transport passengers solely between the subject cruise vessels and the twelve points on shore listed in your request does not violate the PVSA, 46 U.S.C. § 55103.
Excursion Vessels
The second proposed transportation pattern involves the use of non-coastwise-qualified Zodiacs to transport passengers on excursions in which the passengers return to the cruise vessels without going ashore. CBP has previously ruled that the carriage of passengers entirely within U.S. territorial waters, even though the passengers disembark at their initial point of embarkation and the vessel touches no other coastwise point, is considered coastwise trade subject to the PVSA. See, e.g., HQ H014892 (Aug. 17, 2007), HQ 113158 (July 21, 1994). In contrast, the transportation of passengers beyond U.S. territorial waters and back to the point of embarkation, even temporarily, at another U.S. point (i.e., a “voyage to nowhere”), is not considered coastwise trade. Id.
CBP considered almost this exact scenario in HQ 113158 (July 21, 1994). In that matter, the owner of a Russian-flagged vessel requested to use a non-coastwise-qualified Zodiac to conduct “side excursions in United States waters of the Great Lakes….” In response, CBP ruled that the non-coastwise-qualified Zodiac vessel “could not be used to transport passengers in United States waters for the purpose of sight-seeing.” In doing so, CBP eschewed extending the four-factor tender test to situations in which small crafts would be used for excursions beginning and ending solely at a cruise vessel. Similarly, in the present matter, you request to use non-coastwise-qualified Zodiac vessels to transport passengers from the anchored cruise vessels, to “engage in operations that consist of [ ] … and aren’t transferring passengers solely to and from shore.”
Your request argues in part that the proposed transportation of passengers in the instant matter is distinguishable from the scenario considered in HQ 113158 because “it appears the excursions were to take place after the vessel had docked in U.S. ports.” Quoting HQ 113158 (“[a]t these ports passengers will leave the vessel for local excursions in the aforementioned Zodiacs”). We note, however, that the location of the cruise vessel within U.S. territorial waters would not change the analysis or outcome in the present matter. Instead, the salient consideration here is that the proposed transportation does not contemplate point-to-point tendering. Indeed, both HQ 113158 and the instant request involve the transportation of passengers entirely within U.S. territorial waters for excursions in which passengers begin and end at a single coastwise point (either a cruise vessel anchored in U.S. waters or docked at a U.S. pier).
Based on this information, we find that the use of foreign-owned Zodiacs carried on board the above-described cruise vessels to transport passengers on excursions in U.S. territorial waters constitutes a violation of 46 U.S.C. § 55103.
HOLDING
The use of foreign-owned Zodiacs as tenders to transport passengers from the cruise vessels to the twelve points on shore outlined in your request does not violate 46 U.S.C. § 55103.
The use of foreign-owned Zodiacs to transport passengers on excursions in U.S. territorial waters, beginning and ending at the subject cruise vessels, constitutes 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