HQ 0110777 - Applicability of the coastwise laws to the use of a non- coastwise-qualified houseboat in the territorial waters of the United States. - United States International Trade Commision Rulings

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HQ 110777

May 3, 1990

VES-3-15/VES-3-21 CO:R:P:C 110777 BEW

CATEGORY: CARRIER

Mr. Frank R. Kluges
1 Bayview Ave East
Lindenhurst, New York 11757

RE: Applicability of the coastwise laws to the use of a non- coastwise-qualified houseboat in the territorial waters of the United States.

Dear Mr. Kluges:

This is in reference to your letter dated January 28, 1990, in which you requested a ruling on the applicability of the coastwise laws to the use of a non-coastwise-qualified houseboat to sell food products, supplies and trinkets in the waters of the Great South Bay, Long Island, New York.

FACTS:

You state that the houseboat is U.S. built but that you are unable to obtain documents sufficient to sustain continuous U.S. ownership. You state that you would like to use the houseboat to sell food products (such as hot dogs, ice cream, sodas etc.), other supplies and trinkets. Telephonically, you advised Ms. Whiting of my staff that the houseboat would remain stationary at a given location so long as it was a profitable location.

ISSUE:

May a non-coastwise-qualified houseboat which is permanently moored in the territorial waters of the United States be used as a "general store" without violating the coastwise laws?

LAW AND ANALYSIS:

Section 27 of the Act of June 5, 1920, as amended (41 Stat. 999; 46 U.S.C. App. 883, often called the Jones Act), provides, in pertinent part, that:

No merchandise shall be transported by water, or by land and water, on penalty of forfeiture of the merchandise (or a monetary amount up to the value thereof as determined by the Secretary of the Treasury, or the actual cost of the transportation, whichever is greater, to be recovered from any consignor, seller, owner, importer, consignee, agent, or other person or persons so transporting or causing said merchandise to be transported), between points in the United States ... embraced within the coastwise laws, either directly or via a foreign port, or for any part of the transportation, in any other vessel 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 ....

The Customs Service has consistently held that the use of a non-coastwise-qualified vessel as a permanently moored facility does not violate the coastwise laws, or any other law administered by the Customs Service, provided that the vessel remains stationary. Customs also has held that if the vessel is being loaded or unloaded and must be moved to another location because of stress of weather or other reason involving the vessel's safety, subsequently is returned to the same point to continue its loading or unloading, and neither loads nor unloads merchandise at any other point in the United States, the coastwise laws are not violated.

Although the vessel will not be engaging in coastwise trade while in operation as a stationary "general store", the point should be made that by virtue of its being anchored within territorial waters, the vessel itself will become a coastwise point. The practical effect of this fact is that any vessel moving merchandise or passengers between the moored houseboat and another coastwise point (in either direction), must itself be documented for the coastwise trade.

Under the circumstances stated above, an undocumented U.S.- built vessel not qualified to engage in the coastwise trade can be used as a permanently moored "general store", without violating the statute. No law or regulation administered by the United States Customs Service would preclude the use of the permanently moored houseboat to sell general merchandise.

HOLDING:

A non-coastwise-qualified houseboat may be used as a permanently moored "general store" within the territorial waters of the U.S. without violating the coastwise laws of the United States.

Sincerely,

B. James Fritz
Chief

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