VES-3-04 CO:R:IT:C 112472 BEW
Mr. Larry Trani
2008 Halibut Point Road
Sitka, Alaska 00835
RE: Coastwise Trade: Foreign-built vessel; "bunkhouse for
divers"; transportation of divers; abalone fishing; towing
Dear Mr. Trani:
This is in reference to your letter of September 24, 1992,
and your telephone conversation of September 23, 1992, requesting
a ruling regarding the application of the Jones Act to the use of
a Taiwanese-built, 39 foot, U.S. documented vessel, the M/V
ZARINA, for a diving fishery, and to tow a U.S.-flag commercial
fishing vessel within the territorial waters of the U.S.
FACTS:
The vessel M/V ZARINA will be used to transport, in addition
to its captain and crew, divers and their diving gear to and from
the diving sites for the purpose of harvesting abalone. You
state that while at the diving site, the vessel will be used as a
bunkhouse (serve meals and provide berths) for the crew, captain
and divers. You state that all of the diving will take place
from a U.S.-flag commercial fishing vessel, and that vessel will
transport the harvested products. You further state that the
fishing vessel will transport the harvested products while under
her own power, however, the M/V ZARINA will be used to tow the
fishing vessel to and from the dive sites located within the
territorial waters of the U.S.
ISSUES:
1. Whether the use of a foreign-built vessel for a
bunkhouse for the captain, crew, and divers within the
territorial waters of the United States is a violation of 46
U.S.C. App. 883 and/or 289.
2. Whether the use of a foreign-built vessel to transport
divers and their diving gear for the purpose of a "diving
fishery" within the territorial waters of the United States is a
violation of 46 U.S.C. App. 883 and/or 289.
3. Whether the use of a foreign-built vessel to tow a U.S.-
flag commercial fishing vessel to and from dive sites located in
the territorial waters of the United States is a violation of 46
U.S.C. App. 316(a).
LAW ANALYSIS:
The coastwise law pertaining to the transportation of
merchandise, section 27 of the Act of June 5, 1920, as amended
(41 Stat. 999; 46 U.S.C. App. 883, often called the Jones Act),
provides that:
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, to be recovered from any
consignor, seller, owner, importer,
consignee, agent, or other person or persons
so transporting or causing said merchandise
to be transported), between points in the
United States ... 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 ....
"Merchandise" is defined in section 1401(c) of title 19,
United States Code, to include goods, wares, and chattels of
every description, and includes fish, fish products, and fish
packaging materials that are assembled into packages containing
fish. Section 883 specifically provides that, for purposes of
its provisions, "merchandise" includes valueless material (Pub.L.
100-329; 102 Stat. 588). The transportation of valueless
material, whether or not it has commercial value, from a point or
place in the United States or point or place on the high seas
within the Exclusive Economic Zone (EEZ) as defined in the
Presidential Proclamation of March 10, 1983, to another point or
place in the United States or a point or place on the high seas
within that EEZ would also be prohibited under the provisions of
section 883.
The passenger coastwise law, 46 U.S.C. App. 289, provides
that:
No foreign vessel shall transport passengers
between ports or places in the United States
either directly or by way of a foreign port,
under penalty of $200 for each passenger so
transported and landed.
For purposes of section 289, a vessel "passenger" is defined
as "... any person carried on a vessel who is not connected with
the operation of such vessel, her navigation, ownership, or
business." (Section 4.50(b), Customs Regulations.) Section
4.80a, Customs Regulations (19 CFR 4.80a) is interpretive of
section 289.
In its administration of 46 U.S.C. App. 289, the Customs
Service 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 coastwise
point, is considered coastwise trade subject to coastwise laws.
However, the transportation of passengers to the high seas (i.e.,
beyond U.S. 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. It
should be noted that the carriage of fishing parties for hire,
even if the vessel proceeds beyond territorial waters and returns
to the point of the passenger's embarkation, is considered
coastwise trade (T.D. 55193(2)).
Accordingly, given the foregoing definition of "passenger",
the divers in the subject case would be considered passengers in
that they would be considered the same as "fishing parties for
hire".
In interpreting the coastwise laws, Customs has ruled that a
point in United States territorial waters is considered a point
embraced within the coastwise laws. The coastwise laws generally
apply to points in the territorial sea, defined as the belt,
three (3) nautical miles wide, seaward of the territorial sea
baseline, and to points located in internal waters, landward of
the territorial sea baseline, in cases where the baseline and the
coastline differ.
The vessel under consideration, as a foreign-built vessel,
would be precluded from engaging in the coastwise trade. As
noted above, 46 U.S.C. App. 289 and 883, prohibit the
transportation between points in the United States of passengers
or merchandise in a non-coastwise-qualified vessel. However, a
foreign-built vessel not qualified to engage in the coastwise
trade which is permanently moored or anchored, can be used as a
"bunkhouse" without violating either statute. Since the divers
would however, be considered passengers, and their equipment
would be considered merchandise, their transportation to and from
the diving sites located in territorial waters of the United
States would be in violation of both 46 U.S.C. App. 289 and 883.
Legitimate equipment and ship stores for use of the vessel
and crew may be transported from a coastwise point to other
coastwise points without violating the coastwise laws.
In the case under consideration, you indicate that the M.V.
ZARINA will tow the Boston Whaler, a U.S.-flag commercial fishing
vessel, to and from the dive sites. Section 316(a), as amended
by the Act of May 19, 1986 (Pub. L. 99-307 (46 U.S.C. App.
316(a)), prohibits the towing between coastwise points of any
vessel except a vessel in distress, by any vessel other than a
vessel of the United States issued a certificate of documentation
with a coastwise or Great Lakes endorsement (see 46 U.S.C. App.
12106, 12107). This restriction extends to certain territories
and possessions of the United States, to towing between points
within the same harbor, and to direct, indirect, or partial
towing operations. Accordingly, the towing of the Boston Whaler
by the M/V ZARINA would be a violation of the towing statute.
HOLDING:
1. The use of a foreign-built vessel, the M/V ZARINA as a
bunkhouse for the captain, crew and divers, if permanently
moored or at anchor, is not a violation of 46 U.S.C. App 289
and/or 883.
2. The use of a foreign-built vessel to transport divers
and their diving gear for the purpose of a "diving fishery"
within the territorial waters of the United States is a
violation of 46 U.S.C. App. 883 and/or 289.
3. The use of a foreign-built vessel to tow a U.S.-flag
commercial fishing vessel to and from dive sites located in
the territorial waters of the United States is a violation
of 46 U.S.C. App. 316(a).
Sincerely,
B. James Fritz
Chief