VES-3-02-OT:RR:BSTC:CCR H265199 WRB
Mark F. Muller, Esq.
Freehill Hogan & Mahar, LLP
80 Pine Street
New York, NY 10005-1759
RE: M/V NIAGARA BELLE; M/V SAUTE MOUTONS No. 4; and M/V SAUTE MOUTONS
No.5; Tenders; 46 U.S.C. § 55103; 19 C.F.R. § 4.80; 19 C.F.R. § 4.80a.
Dear Mr. Muller:
This is in response to your May 27, 2015, letter, in which you in which you request a ruling on behalf of your client, Niagara Sunset Cruises (hereinafter “NSC”) and its parent company, Niagara Gorge Jet Boating, Ltd., regarding the proposed use of foreign-flagged vessels to transport passengers on the Niagara River in New York state. Our ruling on this matter is set forth below.
FACTS
NSC proposes to use the Canadian-registered, non-coastwise-qualified vessel M/V NIAGARA BELLE as a dinner boat on the Niagara River. NSC proposes to use two of its smaller vessels, the M/V SAUTE MOUTONS No. 4 and M/V SAUTE MOUTONS No.5, (hereinafter the “vessels”) to shuttle the passengers between the Lewiston, New York, dock and the M/V NIAGARA BELLE, which will be moored approximately 50-75 yards from the dock in U.S. territorial waters. The passengers will then board the M/V NIAGARA BELLE and proceed on their dinner cruise on the Niagara River, crossing into Canadian waters for the cruise, and then returning to the original point of embarkation for discharge into the smaller boats, which will return them to the Lewiston dock. Both vessels are non-coastwise-qualified, being registered in Canada. Alternatively, NSC proposes to moor the M/V NIAGARA BELLE in Canadian territorial waters on the Niagara River and use the vessels to transfer passengers between the Lewiston dock and the dinner boat.
ISSUE
Whether the use of the subject vessels as described in the FACTS section above would be in violation of 46 U.S.C. § 55103 and 19 C.F.R. § 4.80.
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. We further note that as they pertain to the Great Lakes, the territorial waters of the United States include those waters adjacent to the coast of the United States extending to the U.S.-Canada international boundary. See e.g. HQ 110056 (Feb.13, 1989); HQ 112023 (Dec. 23, 1991); and HQ 113158 (Jul. 21, 1994). The coastwise law applicable to the transportation of passengers is found in 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.
The Customs and Border Protection (“CBP”) Regulations, promulgated under the authority of 46 U.S.C. § 55103, provide, 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:
(1) Owned by a citizen and is so documented under the laws of the United States as to permit it to engage in the coastwise trade; ….
(emphasis added).
Similarly, 19 CFR § 4.80a(b) provides, in pertinent part:
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:
(1) 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.
(2) 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.
(3) 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.
a. Use of Foreign Tenders in U.S. Territorial Waters
CBP has consistently held that the use of non-coastwise-qualified vessels as tenders in U.S. territorial waters is only permissible under limited circumstances. In HQ 112039 (Jan. 6, 1992), CBP held that the use of non-coastwise-qualified vessels as tenders in U.S. territorial waters was permissible under four conditions: (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 106114 (Apr. 7, 1983); HQ 109025 (Aug. 20, 1987); and HQ 112799 (Jul. 13, 1993). We held in HQ 112039 (Jan. 6, 1992), “[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. (citations omitted).
In the present matter, the proposed use of the subject vessels as tenders to shuttle passengers between the Lewiston dock and the M/V NIAGARA BELLE, while moored in U.S. territorial waters, does not fall within the permissible tendering exception as discussed above. The vessels neither arrive in U.S. territorial waters on board the cruise vessel, nor do they depart U.S. territorial waters on board the cruise vessel. Rather, their role in the operations of the tenders is analogous to that of a water taxi used in HQ 112039. Accordingly, as non-coastwise-qualified vessels, the subject vessels may not be used to transport passengers between the shore and the NIAGARA BELLE, while moored in U.S. territorial waters, without violating 46 U.S.C. § 55103.
b. Use of Foreign Tenders in Canadian Territorial Waters
Alternatively, NSC contemplates mooring the NIAGARA BELLE in Canadian territorial waters on the Niagara River, and using the vessels to transfer passengers between the dock and the dinner boat. The vessels would then shuttle the passengers between the Lewiston dock and the NIAGARA BELLE while moored in Canadian territorial waters of the Niagara River.
CBP’s longstanding position that transportation of passengers from a point in the United States to the high seas or Canadian waters and back to the same point is based on a 1912 opinion of the Attorney General of the United States. In that matter, Attorney General Wickersham held that voyages on the St. Lawrence River and the Great Lakes where Canadian vessels took on passengers at United States ports and to transported them on excursions through domestic and foreign waters, returning them to the port of departure, did not violate the coastwise passenger law. CBP has consistently followed this position. In HQ 113158 (Jul. 21, 1994), a case regarding the use of foreign-owned vessels to transport passengers on the Great Lakes, CBP cited the aforementioned Opinion of the Attorney general when we stated “…the transportation of passengers beyond United States 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.” Based on a plain reading of 46 U.S.C. § 55103, it is well settled that there is no coastwise violation when a passenger embarks at a coastwise point and disembarks at a foreign destination. See 19 C.F.R. §§ 4.80, 4.80a. By definition, such an itinerary does not constitute coastwise transportation. See, e.g., HQ H100756 (Apr. 15, 2010); HQ H115608 (May 16, 2002). Therefore, given that the subject vessels would not transport passengers coastwise, there would be no violation of section 55103.
HOLDING
a. The proposed itinerary in which passengers embark the subject vessels at the Lewiston, New York, dock, and disembark at the M/V NIAGARA BELLE moored in U.S. territorial waters, constitutes an engagement in coastwise trade in violation of 46 U.S.C. § 55103.
b. The proposed itinerary in which passengers embark the subject vessels at the Lewiston, New York, dock, and disembark at the M/V NIAGARA BELLE moored in Canadian territorial waters does not constitute an engagement in coastwise trade in violation of 46 U.S.C. § 55103.
Sincerely,
Lisa L. Burley
Chief/Supervisory Attorney-Advisor
Cargo Security, Carriers and Restricted Merchandise Branch
Office of International Trade, Regulations and Rulings
U.S. Customs and Border Protection