HQ 0111347 - Coastwise Trade; Foreign-built Vessel; Wake Survey; 46 U.S.C. App. 289 - United States International Trade Commision Rulings

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HQ 111347

October 19, 1990

VES-3-06-CO:R:P:C 111347 GEV

CATEGORY: CARRIER

Art M. Morgan, Jr.
Director, Inspection & Control
U.S. Customs Service
909 First Ave.
Seattle, Washington 98174

RE: Coastwise Trade; Foreign-built Vessel; Wake Survey; 46 U.S.C. App. 289

Dear Mr. Morgan:

This is in response to your memorandum dated October 11, 1990 (your ref: VES-3:SE:IC AMM) transmitting a letter dated September 27, 1990, from Mr. Darrell E. Bryan, Vice President & General Manager, Clipper Navigation, Inc., Seattle, Washington, and a letter dated September 21, 1990, from Mr. Stanley C. Stumbo, Chief Naval Architect, Washington State Ferries, Seattle, Washington, regarding the use of a foreign-built vessel for a Puget Sound wake survey. Our ruling on this matter is set forth below.

FACTS:

Washington State Ferries, an agency within the State of Washington's Department of Transportation, wishes to charter the VICTORIA CLIPPER, a foreign-built passenger ferry, in order to determine the wake characteristics of the vessel on a passage at high tide through Rich Passage. In order to obtain accurate data, it is proposed that in addition to the vessel's crew and a full load of fuel, seventy-three (73) non-paying employees of the State of Washington would be required to simulate full load conditions. No one would disembark the vessel until its return to Seattle, the point of embarkation.

ISSUE:

Whether the transportation in the Puget Sound on a foreign- built passenger vessel of non-paying employees of the State of Washington in order to simulate full load conditions for purposes of a wake survey is prohibited by 46 U.S.C. App. 289.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, section 883 (46 U.S.C. App. 883, the coastwise merchandise statute often called the "Jones Act"), provides in part, that no merchandise shall 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 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 (i.e., a coastwise-qualified vessel). This statute has been found to apply even to the transportation of merchandise from point to point within a harbor. Pursuant to 19 U.S.C. 1401(c), the word "merchandise" means goods, wares and chattels of every description and includes merchandise the importation of which is prohibited. Furthermore, Public Law 100-329 (102 Stat. 588) amended section 883 to apply to the transportation of "valueless material..."

Title 46, United States Code Appendix, section 289 (46 U.S.C. App. 289, the passenger coastwise statute), prohibits the transportation of passengers between points embraced within the coastwise laws of the United States, either directly or by way of a foreign port, in a non-coastwise-qualified vessel. Pursuant to section 4.50(b), Customs Regulations (19 CFR 4.50(b)) a "passenger" for purposes of section 289 is defined as "any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership or business."

Points embraced within the coastwise laws include all points within the territorial waters of the United States, including points within a harbor, as well as artificial islands, installations, and devices permanently or temporarily attached to the seabed of the outer continental shelf for the purpose of exploring for, developing or producing resources therefrom. 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.

Customs has previously held that the use of a vessel in oceanographic research and survey is not coastwise trade even if the vessel transports vessel crew, scientists, instructors, or students between coastwise points. In addition, we have held that the use of a vessel for the purpose of demonstration in which persons who are transported on demonstration rides embark and disembark at the same point is not coastwise trade even if the ride is entirely within U.S. territorial waters. The rationale behind both of these rulings is that such persons are not considered to be "passengers" within the meaning of 19 CFR

4.50(b) for purposes of 46 U.S.C. App. 289. We believe this same rationale applies to the transportation of employees of the State of Washington on the VICTORIA CLIPPER for purposes of a wake survey in the Puget Sound.

For future reference, you should know that had we considered the Washington State employees to be passengers for purposes of section 289, their transportation on the subject vessel to the high seas (i.e., beyond U.S. territorial waters) and back to the point of embarkation, assuming they would not go ashore, even temporarily, at another United States point, often called a "voyage to nowhere", is not considered coastwise trade (29 O.A.G. 318 (1912)).

HOLDING:

The transportation in the Puget Sound on a foreign-built passenger vessel of non-paying employees of the State of Washington in order to simulate full load conditions for purposes of a wake survey is not prohibited by 46 U.S.C. App. 289.

Sincerely,

B. James Fritz

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