HQ 0109815 - Applicability of the coastwise laws to the use of a non- coastwise-qualified submersible vessel in Lake Superior for dual use in research/exploration and passenger touring - United States International Trade Commision Rulings

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HQ 109815

December 5, 1988

VES-3-02/14 CO:R:P:C 109815 LLB

CATEGORY: CARRIER

Dr. Steven D. Audette
President, Lake Quest, Inc.
438 North 57th Avenue West
Duluth, Minnesota 55807

RE: Applicability of the coastwise laws to the use of a non- coastwise-qualified submersible vessel in Lake Superior for dual use in research/exploration and passenger touring

Dear Dr. Audette:

Reference is made to your letter of October 12, 1988, in which you request a ruling on the proposed use of a submersible vessel for passenger tours and research activities on Lake Superior.

FACTS:

A Canadian concern currently owns a three-man, U.S.-built submersible vessel known as the SEA OTTER. It is proposed that a U.S. Corporation operate the vessel out of Duluth, Minnesota, in the dual role of research/exploration vessel to be made available to scientists, and submarine excursion vessel for tourists.

ISSUE:

Whether a non-coastwise-qualified vessel may engage in research and/or passenger for hire operations in Lake Superior while operating out of a U.S. port.

LAW AND ANALYSIS:

Generally, the coastwise laws prohibit the transportation of merchandise or passengers 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. 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.

Pursuant to 46 U.S.C. 12106 and 12110 and their predecessors (46 U.S.C. 65i and 65m and, before them, 46 U.S.C. 11) and consistent with 46 U.S.C. 883, the coastwise merchandise law, the Customs Service has consistently held that the prohibition in 46 U.S.C. 289 applies to all non-coastwise- qualified vessels. Non-coastwise-qualified vessels include any vessel other than a vessel built in, properly documented under the laws of, owned by citizens of the United States, and never sold foreign with certain exceptions (46 U.S.C. 12106(a)(2)(B) and 19 CFR 4.80(a)(2) and (3)).

In its interpretation of section 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 the coastwise laws. Transportation of passengers from a point in the United States to the high seas or foreign waters and back to the point of original embarkation, often called a "voyage to nowhere," is not considered coastwise trade. In this case, however, a "voyage to nowhere" would entail a round-trip of approximately 300 miles. For purposes of the coastwise laws, 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.)

The Customs Service has long held that the use of a vessel solely to engage in research is not a use in the coastwise trade. Accordingly, the use of non-coastwise-qualified vessels to engage in research, including the transportation of persons participating in the research from, to, and between research sites in United States territorial waters, whether or not the persons participating in the research temporarily leave the vessel at the research sites, and back, would not violate the coastwise laws. However, if the foregoing activities include the transportation between coastwise points of any persons other than the vessel crew and scientists and students engaged in the research or of any merchandise other than the usual supplies and equipment necessary for that research, the coastwise laws would be violated.

HOLDING:

A non-coastwise-qualified vessel may not transport passengers on a voyage wholly within U.S. waters, even though
the passengers embark and disembark at the same coastwise point. Such a vessel may, however, engage in bona fide research activities as outlined above without violating the coastwise laws.

Sincerely,

B. James Fritz
Chief

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