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HQ 109856


November 30, 1988

VES-5-07 CO:R:P:C 109856 PH

CATEGORY: CARRIER

Mr. Ernie Gomez
Islander Cruises Ltd.
Post Office Box 158
Port Isabel, Texas 78578

RE: Exemption from Vessel Entry and Clearance Requirements under 19 U.S.C. 1441(2) and 19 CFR 4.60(b)(3), Respectively.

Dear Mr. Gomez:

This is with reference to your letter of November 1, 1988, concerning Customs processing of the Panamanian-flag vessel LE MISTRAL.

FACTS:

You state that Islander Cruises, Ltd., planned to begin operation of day cruises by the Panamanian-flag vessel LE MISTRAL from Port Isabel, Texas, on November 16, 1988. You state that the vessel is to proceed to El Mesquital, Mexico, and return. Upon arrival outside El Mesquital, the master of the vessel will radio Mexican authorities and report arrival. At that point, the Mexican authorities will determine if boarding is necessary or if radio clearance will be granted. Nine cruises per week have been scheduled for the vessel.

We understand from other sources that the vessel is a passenger vessel with gambling facilities which are opened only after the vessel has left United States territorial waters and are closed before the vessel reenters United States territorial waters. We also understand that although the vessel enters Mexican waters, it may not be boarded by Mexican authorities, but may be cleared by those authorities by radio. We assume that our understanding, as related above, is correct for purposes of this ruling.

ISSUE:

Whether a foreign-flag passenger vessel which makes more than three cruises per week from a United States port to a point in Mexican territorial waters and back to the United States port of departure is subject to vessel entry and clearance requirements.

LAW AND ANALYSIS:

Under 46 U.S.C. App. 91, any vessel bound to a foreign port is required to obtain clearance from Customs (see 19 CFR 4.60- 4.75). Immediately upon the arrival in the United States of any vessel from a foreign port or place, the vessel is required to report arrival to Customs (19 U.S.C. 1433; 19 CFR 4.2 and 4.2a). Within 48 hours of the arrival in the United States of a foreign vessel, the vessel is required to make vessel entry (19 U.S.C. 1435; 19 CFR 4.3-4.9).

Exceptions from the vessel entry requirements are provided for in 19 U.S.C. 1441. These exceptions are made applicable to vessel clearance under section 4.60(b)(3), Customs Regulations (19 CFR 4.60(b)(3)). Section 1441(2) of title 19, United States Code, provides that:

The following vessels shall not be required to make entry at the customhouse:

(2) Passenger vessels making three trips or oftener a week between a port of the United States and a foreign port, or vessels used exclusively as ferry-boats, car- rying passengers, baggage, or merchandise: Provided, That the master of any such vessel shall be required to report such baggage and merchandise to the appropriate customs officer within twenty-four hours after arrival.

The terms "foreign port" and "foreign port or place," when used in the context in which they are used in the above provisions, have been defined by the courts as "a port or place exclusively within the sovereignty of a foreign nation (see The ELIZA, 8 F. Cas. 445 (No. 4346) (C.C.D. Mass. 1813), and The WINNIE, 65 F. 2nd 706 (3d Cir. 1933)).

On the basis of the foregoing, the vessel under consideration would be required to obtain clearance when departing from the United States and would be required to report arrival immediately and make entry within 48 hours when returning to the United States, unless exempt from any of these requirements. Assuming that the vessel is a passenger vessel, it would be exempt from clearance and entry under 19 U.S.C. 1441(2) and 19 CFR 4.60(b)(3) if it makes three or more trips, as described above, per week. The vessel would not be exempt from the immediate report of arrival requirement in 19 U.S.C. 1333 and the master of the vessel would be required to make the report provided for in 19 U.S.C. 1441(2).

For your information, the applicability to the described operation of certain other laws administered and/or enforced by Customs is briefly described below:

1. The vessel would be exempt from the $397 fee provided for in 19 CFR 4.22(b).

2. The passengers on the vessel would not be subject to the $5 fee provided for in 19 CFR 24.22(g).

3. The vessel would be exempt from tonnage taxes (19 CFR

4. Assuming that the vessel proceeds beyond United States territorial waters (i.e., the belt 3 nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline) and the vessel does not touch at any United States point other than the point of embarkation and disembarkation, the vessel would not violate the passenger coastwise law (46 U.S.C. App. 289).

5. The vessel may be subject to the statutory provisions concerning gambling ships (see 18 U.S.C. 1081-1083; see also, 15 U.S.C. 1175 and 18 U.S.C. 7). We are enclosing copies of two Customs issuances on this subject (ruling dated October 19, 1979 (File: 104258/104086), and letter, dated November 28, 1988 (File: 109873)). As indicated in the November 28 letter, the currency reporting requirements may be applicable to the vessel under consideration.

HOLDING:

A foreign-flag passenger vessel which makes more than three cruises per week from a United States port to a point in Mexican territorial waters and back to the United States port of depar- ture is exempt from vessel entry and clearance under 19 U.S.C. 1441(2) and 19 CFR 4.60(b)(3) but, upon return to the United States, is required to make the immediate report of arrival required by 19 U.S.C. 1333 and the report of baggage and merchandise required within 24 hours by 19 U.S.C. 1441(2).

Sincerely,

John E. Elkins

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