VES-3-OT:RR:BSTC:CCI H100756 GOB
James Doherty
Port Director
U.S. Customs and Border Protection
9 Washington Street
Lubec, ME 04652
RE: Request for Internal Advice; 46 U.S.C. § 55103; Coastwise Transportation of Passengers
Dear Mr. Doherty:
This is in response to your internal advice request of April 8, 2010 with respect to the proposed use of a foreign-flag passenger vessel. Pursuant to 19 CFR § 177.11(a), our advice is set forth below.
FACTS:
Rydell Flynn (the “requester”) of New Brunswick, Canada owns a Canadian-registered passenger vessel with a maximum capacity of ten passengers (the “vessel”). He has posed the following three scenarios with respect to the use of that vessel in a potential business venture:
(1) The requester proposes to leave his Canadian home port and enter the ports of Lubec, Maine and/or Eastport, Maine; pick up passengers in order to take them whale watching in international waters; and then return the passengers to the port where the passengers embarked the vessel.
(2) The requester proposes to leave his Canadian home port and enter the ports of Lubec, Maine and/or Eastport, Maine; pick up passengers in order to take them to Campobello Island, Canada, where the passengers will clear Canadian Customs and spend the day; and then return the passengers to the port where the passengers embarked the vessel.
(3) The requester proposes to leave his Canadian home port and conduct a scheduled daily passenger ferry service as follows: passengers will be transported from Campobello Island, Canada to Eastport, Maine or Lubec, Maine; passengers will be transported from Eastport, Maine or Lubec, Maine to Campobello Island, Canada; no passengers will be transported between Eastport, Maine and Lubec, Maine, i.e., all transportation will be from a Canadian point (Campobello Island) to a U.S. point (Eastport or Lubec) or from a U.S. point (Eastport or Lubec) to a Canadian point (Campobello Island).
ISSUE:
Whether the transportation of passengers on a non-coastwise-qualified vessel, as described above, is violative of 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. A vessel that is built in, documented under the laws of, and owned by citizens of the United States, and which obtains a coastwise endorsement from the U.S. Coast Guard, is referred to as "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 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 traffic; 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.
Penalty. The penalty for violating subsection (a) is $300 for each passenger transported and landed.
The CBP Regulations promulgated pursuant to 46 U.S.C. § 55103 are found at 19 CFR §§ 4.80 and 4.80a. Section 4.80(a)(2), CBP Regulations (19 CFR § 4.80(a)(2)) provides that no vessel exempt from documentation (i.e., of less than 5 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 for the coastwise trade.
Section 4.80a(b), CBP Regulations (19 CFR § 4.80a(b)) provides in pertinent part that:
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.
(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 coastwise port is a "port in the U.S., its territories, or possessions embraced within the coastwise laws." 19 CFR § 4.80a(a)(1). A “nearby foreign port” is defined as "any port in North America, Central America, the Bermuda Islands, or the West Indies (including the Bahama Islands, but not including the Leeward Islands of the Netherlands Antilles, i.e., Aruba, Bonaire, and Curacao)." 19 CFR § 4.80a(a)(2). A “distant foreign port” is defined as “any foreign port that is not a nearby foreign port.” 19 CFR § 4.80a(a)(3).
Section 4.80a(a)(4), CBP Regulations (19 CFR § 4.80a(a)(4)) provides that:
Embark means a passenger boarding a vessel for the duration of a specific voyage and disembark means a passenger leaving a vessel at the conclusion of a specific voyage. The terms embark and disembark are not applicable to a passenger going ashore temporarily at a coastwise port who reboards the vessel and departs with it on sailing from the port. [Emphasis in original.]
The proposed scenarios must be analyzed through an application of the preceding laws and regulations. We note initially that the subject vessel is not coastwise-qualified.
The first scenario involves the transportation of passengers from Lubec, Maine or Eastport, Maine to the high seas for whale watching; the passengers will subsequently be transported back to their respective ports of embarkation, i.e., passengers who embarked at Lubec will disembark at Lubec and passengers who embarked at Eastport will disembark at Eastport. In interpreting the coastwise laws as applied to the transportation of passengers, CBP 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 point, is considered coastwise trade subject to the coastwise laws (Treasury Decision 22275). However, the transportation of passengers to the high seas or foreign 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. This position is based on a 1912 opinion of the Attorney General of the United States (29 Opinions of the Attorney General 318). See also HQ 108228, dated April 18, 1986. On the basis of the foregoing interpretations by CBP, non-coastwise-qualified vessels may be operated on “voyages to nowhere” in which passengers are transported from a point in the United States to a point outside United States territorial waters and back to the point of the passengers’ embarkation, assuming the vessel does not touch any other coastwise point. This transportation is permitted for sightseeing and whale watching, although it is not permitted for charter party fishing. See, for example, HQ 108228, HQ 116629, dated May 4, 2006, HQ 112189, dated April 21, 1992, and HQ 111013, dated June 6, 1991. Accordingly, the activity proposed in this scenario would constitute a “voyage to nowhere” and may be accomplished by the requester’s non-coastwise-qualified vessel.
In the second scenario, the requester will pick up passengers at Lubec, Maine or Eastport, Maine; transport them to Campobello Island, Canada for the day; and then transport the passengers back to their respective ports of embarkation, i.e., passengers who embarked at Lubec will disembark at Lubec and passengers who embarked at Eastport will disembark at Eastport. Because the passengers will disembark at their respective ports of embarkation (albeit with an intervening stop at a “nearby foreign port”), this transportation does not constitute the coastwise transportation of passengers. Accordingly, the prohibition of 46 U.S.C. § 55103 does not apply. Similarly, the prohibition of 19 CFR § 4.80a(b)(2) does not apply. Therefore, this transportation may be accomplished by the requester’s non-coastwise-qualified vessel.
The third scenario involves the transportation of passengers from a Canadian port (Campobello Island) to a U.S. port (Eastport or Lubec) or from a U.S. port (Eastport or Lubec) to a Canadian port (Campobello Island). No passengers will be transported from a U.S. port or place to another U.S. port or place. Accordingly, the prohibition of 46 U.S.C, § 55103 does not apply. Therefore, this transportation may be accomplished by the requester’s non-coastwise-qualified vessel.
Please note that this internal advice response only addresses the movements of the subject vessel with respect to 46 U.S.C. § 55103. It does not address any other CBP-related issues.
HOLDING:
As described above, the activity proposed in each of the three scenarios is not subject to the prohibition of 46 U.S.C. § 55103 and may be accomplished by the requester’s non-coastwise-qualified vessel.
Please provide a copy of this ruling to the internal advice requester. Sixty days from the date of this ruling the office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Glen E. Vereb
Chief
Cargo Security, Carriers, and Immigration Branch