VES-12-02-OT:RR:BSTC:CCR H243820 WRB
Category: Carriers
Mr. Michael Mann
Moonspinner Sailing
2012 Bordeaux Lane
Half Moon Bay, CA 94019
Re: Foreign-built Yacht; 46 U.S.C. § 55103.
Dear Mr. Mann:
This letter is in response to your July 8, 2013, correspondence, in which you request a ruling regarding the proposed use of a foreign-built yacht. Our ruling on this matter is set forth below.
FACTS
The facts, as you have provided them, are that the subject vessel, the M/V MOONSPINNER is a French-built Lagoon 440 catamaran built in 2004, which is documented in the United States with a recreational endorsement. The vessel’s documentation is currently pending renewal with the United States Coast Guard for change of name and home port to Half Moon Bay, California. You further state that the Maritime Administration of the Department of Transportation has determined the vessel to be eligible for a waiver of the U.S.-build requirement of the coastwise trade laws, as authorized by Pub. L. 105-383, Title V, entitled “Administrative Process for Jones Act Waivers” as part of the Small Vessel Waiver Program, making the vessel eligible for coastwise endorsement.
You intend to operate local sight-seeing sailing charters embarking and disembarking at Pillar Point Harbor in Half Moon Bay, CA, to whale watching locations on the high seas outside the three-mile territorial limit. You further intend to apply for a coastwise trade endorsement once the vessel ownership is transferred from the previous owner at the end of this year. You inquire whether the facts as described above exempt the vessel from coastwise trade requirements, and whether there are any other regulations that would prevent the vessel from being chartered in the interim until a coastwise endorsement is obtained.
ISSUE
Whether the subject non-coastwise-qualified vessel may engage in the service described above without violating the coastwise trade laws.
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.
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 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.
(b) 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 4.80a(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:
(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 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).
In its administration of 46 U.S.C. § 55103, U.S. Customs and Border Protection has consistently 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 the 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. See HQ H014892, dated Aug. 17, 2007; HQ 113379 , dated Mar. 23, 1995; and, 29 Opinions of the Attorney General 318; see also HQ H027231, dated May 2, 2008); and, HQ H021838, dated Jan. 24, 2008.
It is noteworthy that our predecessor agency, the U.S. Customs Service, specifically examined the question of the use of a non-coastwise-qualified vessel for whale watching in HQ 112189, dated April 21, 1992. In that matter, we reiterated our longstanding position that the carriage of passengers entirely within territorial waters, even though the passengers disembarked at their point of embarkation and the vessel touched no other point, was considered coastwise trade subject to the coastwise laws. This position was based on a 1900 decision (Treasury Decision 22275) and consistently followed since. Likewise, we determined in that matter that 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,” was not considered coastwise trade, a position based on a 1912 opinion of the Attorney General of the United States (29 Opinions of the Attorney General 318), and consistently followed. Accordingly, we held in that matter that a non-coastwise-qualified vessel may transport passengers from a coastwise point, into international waters, and back to the same coastwise point for the purpose of engaging in whale watching or recreational diving activities while in international waters.
HOLDING:
A non-coastwise-qualified vessel may transport passengers to the high seas (i.e. beyond U.S. territorial waters) and back to the point of embarkation, often called a “voyage-to-nowhere,” to engage in whale watching as described above, without violating the coastwise trade laws, specifically 46 U.S.C. § 55103.
Sincerely,
George Frederick McCray
Supervisory Attorney-Advisor/Chief
Cargo Security, Carriers and Immigration Branch
Office of International Trade, Regulations & Rulings
U.S. Customs and Border Protection