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HQ 109904


January 30, 1989

VES-3-04 CO:R:P:C 109904 BEW

CATEGORY: CARRIER

Mr. Roger W. Koteen
2015 Zapo Street
Del Mar, California 920141

RE: Use of a foreign-built vessel as a "bed and breakfast inn", and for transportation of passengers for sight-seeing purposes within the territorial waters of the United States.

Dear Mr. Koteen:

This is in reference to your letter of November 29, 1988, in which you requested a ruling with regard to the application of the Jones Act to the use of a foreign made vessel for overnight accommodations and for sight-seeing cruises within the inland waters of the harbor of San Diego, California.

FACTS:

You state that the vessel will be used for overnight accommodations (such as "bed and breakfast inns"); that the vessel will be located in the San Diego Bay; and that the vessel will be used for a 2 to 3 hours sight-seeing cruise within the inland waters of the harbor. You further state that a foreign made vessel would be used for this venture.

ISSUE:

Whether the use of a foreign-built vessel for overnight bed and breakfast accommodations which includes a sight-seeing tour within the territorial waters of the United States is a violation of the coastwise laws.

LAW ANALYSIS:

Generally, the coastwise laws (e.g., 46 U.S.C. App. 289 and 883, and 46 U.S.C. 12106 and 12110) 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 and documented under the laws of the United States, and owned by persons who are citizens of the United States.

Under the provisions of 46 U.S.C. App. 289, no foreign vessel shall transport passengers between ports or places in the United States, either directly or by way of a foreign port. The penalty for violating this section of the law is $200 for each passenger so transported and landed.

In interpreting the coastwise laws as applied to the transportation of passengers, we have ruled that the carriage of passengers entirely within territorial waters, even though they disembark at their point of embarkation and the vessel touches no other point, is considered coastwise trade subject to the coastwise laws. The transportation of passengers to the high seas or foreign waters and back to the point of embarkation, often called a "voyage to nowhere," is not considered coastwise trade, assuming the passengers do not go ashore, even temporarily, at another coastwise point. 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.

The vessel under consideration, as a foreign-built vessel, would be precluded from engaging in the coastwise trade. Under the circumstances stated above, you may not use the vessel in the coastwise trade if, as is true in this case, it is not qualified to engage in the coastwise trade. As noted above, 46 U.S.C. App. 289, prohibits the transportation between points in the United States of passengers in a non-coastwise-qualified vessel. "Passenger," for purposes of this provision, is defined as "...any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business" (19 CFR 4.50(b)). However, a foreign-built vessel not qualified to engage in the coastwise trade which is permanently moored, can be used as a bed and breakfast inn or other non-maritime use without violating the statute. No law or regulation administered by the United States Customs Service would preclude the use of the subject vessel as a permanently moored lodging facility since it would not be considered engaged in transportation. The subject persons would however, be considered passengers and their transportation on sight-seeing cruises within the inland harbor or territorial waters of the United States would be a violation of the coastwise laws.

HOLDING:

The use of a foreign-built vessel for overnight bed and breakfast accommodations, if permanently moored, is not a violation of the coastwise laws. The transportation of such persons by a non-coastwise-qualified vessel, such as your foreign-built vessel, for sight-seeing cruises within the San Diego harbor is a violation of the coastwise laws.

Sincerely,

B. James Fritz
Chief

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