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HQ 109517

August 17, 1988

VES-3-02 CO:R:P:C 109517 PH

CATEGORY: CARRIER

Mr. David L. Grant
President
Admiralty Marine Surveyors & Associates, Inc. 920 North Avalon Boulevard
Wilmington, California 90744

RE: Applicability of 46 U.S.C. App. 289 to the use of a foreign-built vessel in the commercial sport fishing service out- side United States territorial waters and in waters contiguous to another country

Dear Mr. Grant:

This in response to your letter of May 10, 1988, in which you request a ruling on the use of a foreign-built vessel in the commercial sport fishing service out of San Diego, California.

FACTS:

You state that you represent a client who has owned a number of small United States-built and documented passenger vessels en- gaged in commercial sport fishing. You state that you are inves- tigating the feasibility of building another vessel in a foreign shipyard with the intention of employing it in the commercial sport fishing service out of San Diego, California. Your client plans to embark passengers from San Diego and proceed beyond United States territorial waters and south of 30 degrees 11 min- utes North latitude (the United States-Mexican border). Fishing would only take place in waters south of 30 degrees 11 minutes North latitude. After the voyage passengers would disembark at the same point at which they had embarked. You contend that this operation would not be coastwise trade.

ISSUE:

May a foreign-built vessel be used in commercial sport fishing out of San Diego, California, when the passengers are embarked and disembarked at San Diego and transported beyond

United States territorial waters and fishing takes place solely in waters south of 30 degrees 11 minutes North latitude (the United States-Mexican border)?

LAW AND ANALYSIS:

The Act of June 19, 1886, as amended (24 Stat. 81; 46 U.S.C. App. 289, sometimes called the coastwise passenger law), 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 a penalty of $200 for each passenger so transported and landed.

We have consistently interpreted this proscription to apply to any vessel except a United States-built, owned, and properly documented vessel (see 46 U.S.C. 12106 and 12110, 46 U.S.C. App. 883, and 19 CFR 4.80(a), the latter with regard to vessels which may not be documented by the United States Coast Guard because they measure less than 5 net tons).

As we stated in our letter of April 18, 1986 (File No. 108228), to which you referred in your letter:

In interpreting the coastwise laws as applied to the transportation of passengers, the Customs Service has ruled that the carriage of passengers entirely within territorial waters, even though the passengers disem- bark at their point of embarkation and the vessel touches no other point, is considered coastwise trade subject to the coastwise laws. However, the transpor- tation 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. The Customs Service has ruled that the carriage of fishing parties for hire, even if the vessel proceeds beyond territorial waters and returns to the point of the passengers' embarkation, is considered coastwise trade subject to the coastwise laws. The territorial waters of the United States consist of the territorial sea, defined as the belt, 3 nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline.

Our position that the carriage of fishing parties for hire, even if the vessel proceeds beyond United States territorial wa- ters and returns to the point of the passengers' embarkation, is coastwise trade, is, as we stated in our April 18, 1986, letter:

... based on a 1936 ruling by the predecessor to the Customs Service in the administration of the coastwise and other navigation laws (Bureau of Navigation and Steamboat Inspection Circular Letter No. 103, June 3, 1936 ...). In Treasury Decision 55193(2) ... we con- firmed this position and have consistently so held since the issuance of that Treasury Decision in 1960.

For your convenience, we are enclosing copies of the Bureau of Navigation and Steamboat Inspection Circular Letter and the Treasury Decision referred to in the foregoing quotation.

With regard to our position concerning the carriage of fishing parties for hire, we have held that such carriage is con- sidered coastwise trade whether the carrying vessel transports the fishing parties solely within United States territorial wa- ters or to the high seas or foreign waters (see, e.g., our ruling letter dated January 15, 1981 (File No. 104932)). In the commer- cial sport fishing operation you describe, the vessel would pro- ceed beyond United States territorial waters and fishing would take place solely in waters south of the United States-Mexican border. Thus, fishing would be limited to either Mexican terri- torial waters or the high seas contiguous to Mexican territorial waters. Under the interpretation of the coastwise laws described above, such an operation would be considered coastwise trade and would be prohibited if the vessel used was a foreign-built vessel.

HOLDING:

A foreign-built vessel is prohibited from being used in commercial sport fishing out of San Diego, California, when the passengers are embarked and disembarked at San Diego and trans- ported beyond United States territorial waters and fishing takes place solely in waters south of 30 degrees 11 minutes North latitude (the United States-Mexican border).

Sincerely,

B. James Fritz

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