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HQ 110976

June 26, 1990

VES-3-02 CO:R:P:C 110976 LLB

CATEGORY: CARRIER

Mr. Paul H. Wells
Fraser Maritime Services, Inc.
330 Biscayne Blvd.
Miami, Florida 33132

RE: Applicability of the Coastwise Passenger Statute to Alternative Passenger Cruise Itineraries

Dear Sir:

Reference is made to your letter of April 11, 1990, in which you request a ruling on the applicability of the coastwise passenger statute to alternative proposed cruise itineraries.

FACTS:

We understand the proposed itineraries to be:

1. A foreign-flag vessel would take passengers aboard in Tampa, Florida. The passengers would leave the vessel in Progresso, Mexico, and return to any of various U.S. cities by commercial airline.

2. Two foreign-flag vessels would depart from Tampa, several days apart, and continue cruising between that port and Progresso, Mexico. Persons discharged in Progresso would stay for varying periods and reboard either of the vessels to return either to Tampa or other U.S. ports for disembarkation.

ISSUE:

Whether the coastwise passenger transportation statute would prohibit either of the proposed cruise itineraries.

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 port 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 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. App. 883, the coastwise merchandise law, the Customs Service has consistently held that the prohibition in 46 U.S.C. App. 289 applies to all non-coastwise- qualified vessels.

Customs has promulgated regulations to administer the passenger transportation statute in section 4.80a, Customs Regulations (19 CFR 4.80a). The regulations provide guidelines for determining whether the movement of passengers between two coastwise points, with at least one intervening foreign point, is considered coastwise trade. To facilitate such determinations a distinction has been drawn between nearby foreign ports and distant foreign ports. By visiting at least one distant foreign point, a violation of the coastwise laws may be avoided on cruises moving between U.S. ports. For ease of application, the distinction has been drawn geographically with all Canadian, Mexican, Central American, Caribbean Sea, and Gulf of Mexico points (with the exception of the Islands of Aruba, Bonaire, and Curacao), being designated as nearby foreign ports, and all others being considered distant foreign ports.

As stringently as the law is drawn and administered, it is the case, as reiterated in the case of Autolog Corporation et al. v. Regan, 731 F.2d 25 (1984), that section 289 aims at tracking the route of the vessel and not the passengers. In the cited case, passengers and their automobiles were taken from New York to the Bahamas on one foreign-flag vessel, and there transferred to other foreign-flag vessels for transportation to ports in Florida. This was found not to be in violation of section 289 since more than one vessel was involved in the transportation of any single passenger. The same would not be the case under the coastwise merchandise statute (section 883), but that statute was not violated in the cited case since the automobiles transported were considered baggage transported free of charge.

In terms of the itineraries under consideration, the passengers may be returned by air carrier without violating section 289. In the case of passengers returning by vessel, persons may be returned to their original port of embarkation in the U.S. by either of the vessels involved. Any person returning to the U.S. at a port other than the original port of embarkation must be returned on a different vessel than the one originally transporting that person from the United States.

HOLDING:

After thorough consideration of the facts and analysis of the law, we find that under the itineraries proposed in this case, cruise passengers taken aboard at coastwise points may eventually end their travel as specified in the law and analysis section of this ruling letter.

Sincerely,

B. James Fritz

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