VES-3-07 CO:R:IT:C 111921 JBW
Kenneth E. Johnson, Esquire
Baker & Hostetler, McCutchen Black
600 Wilshire Boulevard
Los Angeles, California 90017
RE: Coastwise; Foreign-flag; Transportation of Yachts; Foreign-
port; 46 U.S.C. App. 883.
Dear Mr. Johnson:
This letter is in response to your request, dated September
25, 1991, for a ruling on the application of the coastwise laws
to the carriage of private yachts between ports in the United
States and ports in Mexico.
FACTS:
Dock Express Shipping, Inc., is a corporation that owns and
operates vessels engaged in the foreign trade. This company
proposes to transport on its foreign-flag vessels private yachts
and other vessels from ports in the United States to Ensenada or
other ports in Mexico. After these yachts have been off-loaded
in Mexico, the owners, who will have obtained separate
transportation to Mexico, will proceed on these yachts under
their own power to points in Mexico, the United States, or
international waters. Dock Express Shipping will offer this
carriage as a one-way service. Dock Express Shipping also plans
to advertise this service, including the fact that the vessels it
carries to Mexican ports will be able to sail or motor back to
the United States.
ISSUE:
Whether the coastwise merchandise law (46 U.S.C.A. App. 883
(West Supp. 1991)) prohibits the carriage of private yachts or
other vessels aboard a foreign-flag vessel from a port in the
United States to a port in Mexico when such yachts or other
vessels return to the United States under their own power.
LAW AND ANALYSIS:
Section 883 of Title 46, United States Code Appendix,
provides, in pertinent part:
No merchandise shall be transported by water,
or by land and water, on penalty of
forfeiture of the merchandise (or a monetary
amount up to the value thereof as determined
by the Secretary of the Treasury, or the
actual cost of the transportation, whichever
is greater...), between points in the United
States, including Districts, Territories, and
possessions thereof embraced within the
coastwise laws, either directly or via a
foreign port, or for any part of the
transportation, in any other vessel than a
vessel built in and documented under the laws
of the United States and owned by persons who
are citizens of the United States....
46 U.S.C.A. App. 883. The Customs Service has ruled that a
point within the territorial waters of the United States is a
point embraced within the coastwise laws. The territorial waters
of the United States consist of the territorial sea, defined as
the belt, three nautical miles wide, seaward of the territorial
sea baseline, and of the internal waters of the United States,
landward of the territorial sea baseline, in cases where the
baseline and the coastline differ. Headquarters Ruling Letter
111275, dated November 13, 1990.
The Customs Service has determined that the transportation
by a non-coastwise qualified vessel of automobiles between a port
in the United States and a port in Canada does not constitute a
coastwise transportation of merchandise when such automobiles are
driven back to the United States by the owners. C.S.D. 84-53, 18
Cust. B. & Dec. 969, 972 (1984). This conclusion follows
regardless of whether the automobiles are considered merchandise
or baggage. Id. The rationale for this determination is that
the coastwise merchandise statute prohibits the transportation of
merchandise between points in the United States; no
transportation occurs when the automobiles return under their own
power. Id. The Customs Service has likewise permitted the use
of a non-coastwise qualified vessel to transport a vessel from a
coastwise point to a non-coastwise point from which the
transported vessel proceeds under its own power to a second
coastwise point. Headquarters Ruling Letter 110280, dated August
24, 1989.
From these principles, we conclude that the coastwise
merchandise law does not prohibit the carriage of private yachts
or other vessels aboard a foreign-flag vessel from a port in the
United States to a port in Mexico when the transported yachts
return to the United States under their own power. Whereas the
yachts are "transported" to Mexico from the United States, no
"transportation" occurs for purposes of the coastwise merchandise
law when the vessels return under their own power. Furthermore,
the advertisement of this service would not affect our conclusion
regarding the legality of the transportation. See C.S.D. 84-53
at 972.
HOLDING:
The coastwise merchandise law, 46 U.S.C.A. App. 883, does
not prohibit the carriage of private yachts or other vessels
aboard a foreign-flag vessel from a port in the United States to
a port in Mexico when the transported yachts or other vessels
return to the United States under their own power.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch