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HQ 111291


October 9, 1990

VES-3-02 CO:R:P:C 111291 JBW

CATEGORY: CARRIER

Denton N. Thomas, Esq.
Andrews & Kurth
Texas Commerce Towers
Houston, Texas 77002

RE: Coastwise; Voyage to Nowhere; Foreign-Built Vessel; TROPICANA; 46 U.S.C. App. 289.

Dear Mr. Thomas:

This letter is in response to your letter on behalf of Marlyn Management Company, dated September 12, 1990, requesting a ruling regarding the use of the foreign-built vessel, TROPICANA, in transporting passengers from a point in the United States.

FACTS:

The TROPICANA is a Bahamian-flag motor passenger ship that was built by Cockerill Yards, Hoboken, Belgium, in 1966. As described in your letter, Marlyn Management Company intends to use the vessel on day cruises lasting from six to eight hours and departing from the Port of Freeport, Texas. These trips will involve carrying passengers out twelve miles and beyond and returning to the same port from which the vessel departed, with no intermediate stops.

ISSUE:

Whether the carriage of passengers by a foreign-built vessel beyond the United States territorial limits is an engagement in the coastwise trade under United States law.

LAW AND ANALYSIS:

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.

46 U.S.C. App. 289. The Customs Service has consistently interpreted this proscription to apply to any vessel except a United States built, owned, and properly documented vessel. See 46 U.S.C.A. 12106 & 12110 (West Supp. 1990), 46 U.S.C. App. 289, and 19 C.F.R. 4.80(a) (1989). .

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 disembark at their point of embarkation and the vessel touches no other point, is considered coastwise trade subject to the coastwise laws. E.g., Headquarters Ruling Letter 110990, dated May 21, 1990. However, the transportation of passengers to the high seas or foreign waters and back to the precise point of embarkation, often called a "voyage to nowhere," is not considered coastwise trade. Id. An important corollary to this rule is that a "voyage to nowhere" assumes the passengers do not leave the vessel, even temporarily, at another United States point. Id. Furthermore, 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. Headquarters Ruling Letter 111051, dated August 16, 1990.

The territorial waters of the United States consist of the territorial sea, defined as the belt, three nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline.

Based on the foregoing provisions and interpretations, the TROPICANA, being foreign-built, may not qualify to engage in coastwise trade. If the itineraries of the TROPICANA include only trips beyond the territorial limits, then such trips will not result in an engagement by the vessel in the coastwise trade. However, if the vessel stays within the territorial waters of the United States, then the prohibitions contained in the coastwise laws will apply to the voyage.

HOLDING:

The use of foreign-built vessel to transport passengers on trips beyond the three-mile territorial limits departing from and returning to the same dock is not considered an engagement in the coastwise trade, provided the passengers do not leave the vessel at another United States point.

Sincerely,

B. James Fritz
Chief

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