VES-3-02-OT:RR:BSTC:CCR H301336 ASZ
Mr. Jose Casanova-Lopez
OdySEA Hospitality
1607 Avenida Juan Ponce de León
Cobian's Plaza GM-06 / CoCoHaus
San Juan, 00909, Puerto Rico
RE: Coastwise Trade; 46 U.S.C. § 55103.
Dear Mr. Casanova-Lopez:
This letter is in response to your October 11, 2018 ruling request on behalf of OdySEA Hospitality International, Inc., d.b.a. BWA Yachting Puerto Rico (“OdySEA”), regarding the proposed itineraries of the SY MONDANGO 3. Our decision follows.
FACTS
The following facts are from your October 11, 2018 ruling request and December 18, 2018, March 6, 2019, March 13, 2019, and April 9, 2019 e-mails to this office. The SY MONDANGO 3 is a Cayman Islands-flag commercial yacht. The master of the vessel expressed interest in establishing a charter operation based in Puerto Rico beginning on May 15, 2019. OdySEA will act as the vessel agent while the SY MONDANGO 3 stays in Puerto Rico.
You present the following ten proposed itineraries for our consideration. In each of the itineraries below, guests have the option to temporarily leave the vessel at each port of call to sightsee. You state that the vessel will not embark any new passengers subsequent to the initial point of embarkation for any of the itineraries.
Itinerary 1
Day 1: Embark St. Thomas, U.S. Virgin Islands
Day 2: Culebra, Puerto Rico
Day 3: Culebra, Puerto Rico
Day 4: Culebrita and Cayo Norte, Puerto Rico
Day 5: Vieques, Puerto Rico
Day 6: Vieques, Puerto Rico
Day 7: San Juan, Puerto Rico
Day 8: San Juan, Puerto Rico
Itinerary 2
Day 1: San Juan, Puerto Rico
Day 2: Culebra, Puerto Rico
Day 3: Culebra, Puerto Rico
Day 4: Culebrita and Cayo Norte, Puerto Rico
Day 5: Vieques, Puerto Rico
Day 6: Vieques, Puerto Rico
Day 7: San Juan, Puerto Rico
Day 8: San Juan, Puerto Rico
Itinerary 3
Day 1: San Juan, Puerto Rico
Day 2: Vieques, Puerto Rico
Day 3: Vieques, Puerto Rico
Day 4: Culebra, Puerto Rico
Day 5: Culebra, Puerto Rico
Day 6: Culebrita and Cayo Norte, Puerto Rico
Day 7: St. Thomas, U.S. Virgin Islands
Day 8: St. Thomas, U.S. Virgin Islands
Itinerary 4
Day 1: St. Thomas, U.S. Virgin Islands
Day 2: Culebra, Puerto Rico
Day 3: Culebra, Puerto Rico
Day 4: Culebrita and Cayo Norte, Puerto Rico
Day 5: Vieques, Puerto Rico
Day 6: Vieques, Puerto Rico
Day 7: St. Thomas, U.S. Virgin Islands
Day 8: St. Thomas, U.S. Virgin Islands
Itinerary 5
Day 1: San Juan, Puerto Rico
Day 2: Culebra, Puerto Rico
Day 3: Culebrita and Cayo Norte, Puerto Rico
Day 4: St. Thomas, U.S. Virgin Islands
Day 5: St. Thomas, U.S. Virgin Islands
Day 6: Vieques, Puerto Rico
Day 7: San Juan, Puerto Rico
Day 8: San Juan, Puerto Rico
Itinerary 6
Day 1: San Juan, Puerto Rico
Day 2: Culebra, Puerto Rico
Day 3: Culebrita and Cayo Norte, Puerto Rico
Day 4: St. Thomas, U.S. Virgin Islands
Day 5: St. Thomas, U.S. Virgin Islands
Day 6: Tortola, British Virgin Islands
Day 7: Peter Island, British Virgin Islands
Day 8: Beef Island, British Virgin Islands
Itinerary 7
Day 1: Tortola, British Virgin Islands
Day 2: Peter Island, British Virgin Islands
Day 3: St. Thomas, U.S. Virgin Islands
Day 4: St. Thomas, U.S. Virgin Islands
Day 5: Culebra, Puerto Rico
Day 6: Culebrita and Cayo Norte, Puerto Rico
Day 7: San Juan, Puerto Rico
Day 8: San Juan, Puerto Rico
Itinerary 8
Day 1: San Juan, Puerto Rico
Day 2: Culebra, Puerto Rico
Day 3: Culebrita and Cayo Norte, Puerto Rico
Day 4: Vieques, Puerto Rico
Day 5: Vieques, Puerto Rico
Day 6: Tortola, British Virgin Islands
Day 7: Peter Island, British Virgin Islands
Day 8: Beef Island, British Virgin Islands
Itinerary 9
Day 1: Tortola, British Virgin Islands
Day 2: Peter Island, British Virgin Islands
Day 3: Culebra, Puerto Rico
Day 4: Culebrita and Cayo Norte, Puerto Rico
Day 5: Vieques, Puerto Rico
Day 6: Vieques, Puerto Rico
Day 7: San Juan, Puerto Rico
Day 8: San Juan, Puerto Rico
Itinerary 10
Day 1: San Juan, Puerto Rico
Day 2: Culebra, Puerto Rico
Day 3: Tortola, British Virgin Islands
Day 4: Peter Island, British Virgin Islands
Day 5: Just Van Dyke, British Virgin Islands
Day 6: Vieques, Puerto Rico
Day 7: San Juan, Puerto Rico
Day 8: San Juan, Puerto Rico
ISSUE
Whether the proposed itineraries to transport passengers aboard a non-coastwise-qualified vessel would constitute a violation 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. 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 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.
Section 4.50(b) of the Customs and Border Protection (“CBP”) Regulations provide:
A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of the vessel, her navigation, ownership, or business.
The CBP Regulations promulgated pursuant to 46 U.S.C. § 55103 are found at 19 C.F.R. §§ 4.80 and 4.80a. Section 4.80(a) provides, in pertinent part, that no vessel shall transport, either directly or by way of a foreign port, any passenger between points in the U.S. embraced within the coastwise laws, including points within a harbor, unless the vessel is coastwise-qualified. Section 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 C.F.R. § 4.80a(a)(1). A “nearby foreign port” is defined as “any foreign 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). A port in the U.S. Virgin Islands shall be treated as a nearby foreign port.” 19 C.F.R. § 4.80a(a)(2). A “distant foreign port” is defined as “any foreign port that is not a nearby foreign port.” 19 C.F.R. § 4.80a(a)(3).
Section 4.80a(a)(4), CBP Regulations (19 C.F.R. § 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.)
Pursuant to 46 U.S.C. § 55104(b), “[e]xcept as otherwise provided in this section, a vessel not qualified to engage in the coastwise trade may transport passengers between a port in Puerto Rico and another port in the United States.” The regulations promulgated under the authority of § 55104(b) further provide:
An exception to the prohibition in this section is the transportation of passengers between ports in Puerto Rico and other ports in the U.S. on passenger vessels not qualified to engage in the coastwise trade. Such transportation is permitted until there is a finding under 46 U.S.C. 55104 that a qualified U.S.-flag passenger vessel is available for such service.
See also HQ H242538 (Jun. 20, 2013); HQ H186131 (Sept. 28, 2011); HQ H248285 (Dec. 18, 2013).
In addition, pursuant to 46 U.S.C. § 55101(b)(3), the coastwise laws do not apply to "the Virgin Islands until the President declares by proclamation that the coastwise laws apply to the Virgin Islands." See also HQ H006044 (Jan. 30, 2007) and HQ H137215 (Dec. 10, 2010).
With regard to itinerary 1, you state that passengers will embark the vessel in the U.S. Virgin Islands and will disembark in San Juan, Puerto Rico. Pursuant to 46 U.S.C. § 55101(b)(3), the coastwise laws do not apply to "the Virgin Islands until the President declares by proclamation that the coastwise laws apply to the Virgin Islands." To date, the President of the United States has not declared by proclamation that the coastwise laws extend to the U.S. Virgin Islands. Accordingly, the vessel may transport passengers between the U.S. Virgin Islands and San Juan, Puerto Rico. Therefore, the proposed itinerary, in which passengers embark the vessel in the U.S. Virgin Islands and disembark in San Juan, Puerto Rico, would not constitute a violation of 46 U.S.C. § 55103.
With regard to itinerary 2, you state that passengers will embark the vessel in San Juan, Puerto Rico and will disembark in San Juan, Puerto Rico, with all ports of call in Puerto Rico. Title 46 U.S.C. § 55104(b), permits the transportation of passengers “between a port in Puerto Rico and another port in the United States.” Accordingly, we have held that passengers may not be transported from one point within Puerto Rico to a second point within Puerto Rico on a non-coastwise-qualified vessel. HQ 113255 (Oct. 25, 1994) (ruling that the transportation of passengers between Fajardo, Puerto Rico and the islands of Culebra and Vieques, Puerto Rico was in violation of the coastwise laws and noting that the legislative history “makes it clear that it was intended to permit passenger movement on non-coastwise-qualified vessels only between Puerto Rico and the United States mainland”). Therefore, the proposed itinerary, in which passengers embark the vessel in San Juan, Puerto Rico and disembark in San Juan, Puerto Rico, would constitute a violation of 46 U.S.C. § 55103.
With regard to itinerary 3, you state that passengers will embark the vessel in San Juan, Puerto Rico and will disembark in St. Thomas, U.S. Virgin Islands. Pursuant to 46 U.S.C. § 55101(b)(3), the coastwise laws do not apply to "the Virgin Islands until the President declares by proclamation that the coastwise laws apply to the Virgin Islands." To date, the President of the United States has not declared by proclamation that the coastwise laws extend to the U.S. Virgin Islands. Accordingly, the vessel may transport passengers between San Juan, Puerto Rico and the U.S. Virgin Islands. Therefore, the proposed itinerary, in which passengers embark the vessel in San Juan, Puerto Rico and disembark in the U.S. Virgin Islands, would not constitute a violation of 46 U.S.C. § 55103.
With regard to itinerary 4, you state that passengers will embark the vessel in St. Thomas, U.S. Virgin Islands and will disembark in St. Thomas, U.S. Virgin Islands. Pursuant to 46 U.S.C. § 55101(b)(3), the coastwise laws do not apply to "the Virgin Islands until the President declares by proclamation that the coastwise laws apply to the Virgin Islands." To date, the President of the United States has not declared by proclamation that the coastwise laws extend to the U.S. Virgin Islands. Accordingly, the vessel may transport passengers between ports in the U.S. Virgin Islands. Therefore, the proposed itinerary, in which passengers embark the vessel in the U.S. Virgin Islands and disembark in the U.S. Virgin Islands, would not constitute a violation of 46 U.S.C. § 55103.
With regard to itinerary 5, you state that passengers will embark the vessel in San Juan, Puerto Rico and will disembark in San Juan, Puerto Rico, with a port of call in St. Thomas, U.S. Virgin Islands. Pursuant to 19 C.F.R. § 4.80a(b)(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.” A coastwise port is a “port in the U.S., its territories, or possessions embraced within the coastwise laws.” 19 C.F.R. § 4.80a(a)(1). A “nearby foreign port” is defined as “any foreign 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). A port in the U.S. Virgin Islands shall be treated as a nearby foreign port.” 19 C.F.R. § 4.80a(a)(2). Accordingly, since the passengers on the proposed itinerary would embark the vessel in San Juan, Puerto Rico, a coastwise port, on a voyage to several coastwise ports and a nearby foreign port in the U.S. Virgin Islands, and return to San Juan, Puerto Rico, their original port of embarkation to disembark, the proposed itinerary would not constitute a violation of 46 U.S.C. § 55103.
With regard to itineraries 6 and 8, you state that the passengers will embark the vessel in San Juan, Puerto Rico and will disembark in Beef Island, British Virgin Islands. Based on the facts provided, the coastwise laws are inapplicable to itineraries 6 and 8 because, although the passengers will embark the vessel in San Juan, Puerto Rico, a U.S. port, the passengers will disembark the vessel at a foreign port, i.e., the British Virgin Islands. Therefore, the proposed itineraries would not constitute a violation of 46 U.S.C. § 55103.
With regard to itineraries 7 and 9, you state that the passengers will embark the vessel in Tortola, British Virgin Islands and will disembark in San Juan, Puerto Rico. Based on the facts provided, the coastwise laws are inapplicable to itineraries 7 and 9 because, although the passengers will disembark the vessel in San Juan, Puerto Rico, a U.S. port, the passengers will embark the vessel at a foreign port, i.e., the British Virgin Islands. Therefore, the proposed itineraries would not constitute a violation of 46 U.S.C. § 55103.
With regard to itinerary 10, you state that the passengers will embark the vessel in San Juan, Puerto Rico and will disembark in San Juan, Puerto Rico, with intermediate ports of call in the British Virgin Islands. Pursuant to 19 C.F.R. § 4.80a(b)(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.” A coastwise port is a “port in the U.S., its territories, or possessions embraced within the coastwise laws.” 19 C.F.R. § 4.80a(a)(1). A “nearby foreign port” is defined as “any foreign 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). A port in the U.S. Virgin Islands shall be treated as a nearby foreign port.” 19 C.F.R. § 4.80a(a)(2). See HQ 111396 (Mar. 20, 1991) (describing Virgin Gorda, British Virgin Islands as a “nearby foreign port”). Accordingly, since the passengers on the proposed itinerary would embark the vessel in San Juan, Puerto Rico, a coastwise port, on a voyage to several coastwise ports and several nearby foreign ports in the British Virgin Islands, and return to San Juan, Puerto Rico, their original port of embarkation to disembark, the proposed itinerary would not constitute a violation of 46 U.S.C. § 55103.
HOLDING
The proposed transportation of passengers as described in itineraries 1 and 3-10 would not constitute a violation of 46 U.S.C. § 55103.
The proposed transportation of passengers as described in itinerary 2 would constitute a 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