HQ 0111504 - Pleasure Vessel; Undocumented Foreign Vessel; Alien ownership; State Registered - United States International Trade Commision Rulings

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HQ 111504

October 9, 1991

VES--03-CO:R:IT:C 110504 BEW

Category: CARRIER

Barbara Ehrich Locke, Esquire
1200 Brickell Avenue
P. O. Box 015441
Miami, Florida 33101

RE: Pleasure Vessel; Undocumented Foreign Vessel; Alien ownership; State Registered

Dear Ms. Locke:

This is reference to your request for a ruling concerning the use of a Canadian-built, undocumented 41' sailing vessel in the waters of the United States, which is owned by a resident alien.

FACTS:

You state that the subject vessel is owned by Mr. Malcolm Elliott, a U. K. citizen who has lived in the United States for over thirty years. You state that Mr. Elliott resides on his boat which is docked at the Dinner Key Marina, Miami, Florida. You state that the boat was purchased in 1987, transported into the United States, and all duties required by Customs laws were paid by Mr. Elliott. You state that he also paid Florida sales tax on the vessel and registered it in the State of Florida. You state that on September 22, 1990, when Mr. Elliott returned from the Bahamas, and reported to Customs, he was issued an Immigration clearance but was told to report to the Marine office of Customs with his Florida State Registration Certification. When he arrived at the Marine office, you state that he was told that he had to fill out a "cargo and manifest sheet." He questioned this procedure, and was told by Customs that his vessel is an undocumented U.K. vessel which is required to make entry and clearance each time the vessel passes north of the Haulover Inlet, or south of Key Largo. The original State Registration Certification was retained at the Marine office and a copy was returned to Mr. Elliott.

You state that the vessel is used exclusively for pleasure purposes, and that it does not engage in any coastwise transportation of passengers or merchandise. You state that Mr. Elliott recognizes the need to make entry when returning from a foreign port, however, his primary area of concern lies in the fact that he frequently travels in the area between Palm Beach County and the Florida Keys to visit friends and relatives. You state that Mr. Elliot's understanding of the regulations is that in order to visit his parents in Boca Raton on the weekends, something he does routinely, the vessel would have to be cleared on his outbound trip from Miami, and enter and clear at the next designated port (possibly West Palm Beach) on his way up the coast, and enter and clear again on the return trip. Your letter requests a clarification of the status of the subject vessel, and the Customs requirements with respect to the type of voyage outlined above. You also inquire as to whether the subject vessel may fly a flag, and if so which flag is permissible.

ISSUE:

Whether a "licensed yacht" or undocumented foreign-built pleasure vessel" which is state registered, and owned by a resident alien in the United States, is exempt from entry and clearance within the meaning of the provisions in 19 U.S.C. 1441(3) and 46 U.S.C. App. 91.

LAW AND ANALYSIS:

The master of any foreign vessel arriving in a United States port, whether from a foreign port or another United States port, is required under the provisions of title 19, United States Code, section 1433 (19 U.S.C. 1433), to immediately report its arrival. Section 1433, provides in pertinent part, that immediately upon the arrival at any port or place in the United States or Virgin Islands of: (1) any vessel from a foreign port or place; (2) any foreign vessel from a domestic port; or (3) any vessel of the United States carrying bonded merchandise, or foreign merchandise for which entry has not been made, the master of the vessel shall report the arrival at the nearest customs facility or such other place as the Secretary may prescribe by regulation.

In addition, the master of any foreign vessel arriving in a United States port, whether from a foreign port or another United States port is required to make vessel entry under title 19, United States Code, section 1435 (19 U.S.C. 1435), and section 4.3 of the Customs Regulations (19 CFR 4.3). Such vessels are also required to clear when bound for a foreign port, and must have a permit to proceed from one United States port to another.

Paragraph (3) of 19 U.S.C. 1441, exempts from entry in the United States licensed yachts or undocumented American pleasure vessels not engaged in trade nor in any way violating the Customs or navigation laws of the United States and not having visited any hovering vessel. The statute requiring vessel clearance of a vessel bound to a foreign port or place (46 U.S.C. 91) contains a similar provision under which "a licensed yacht or an undocumented American pleasure vessel not engaged in any trade nor in any way violating the customs or navigation laws of the United States" is exempt from clearance.

Customs interpretation of the term "licensed yacht or undocumented American pleasure vessel" in 19 U.S.C. 1441(3) and 46 U.S.C. App. 91, under which such vessels are exempt from vessel entry and clearance under the circumstances described therein, is as follows:

(1) A "licensed yacht or undocumented American pleasure vessel" includes:

(a) A pleasure vessel documented by the United States Coast Guard under 46 U.S.C. chapter 121; and

(b) An undocumented pleasure vessel owned by a citizen of the United States, regardless of whether the United States citizen is a resident of the United States and regardless of whether the vessel is numbered under a State numbering system.

Customs has held that an undocumented American pleasure vessel must meet the same requirements as a documented American pleasure vessel, except that for its tonnage it is not documented. To be eligible for documentation, a vessel must be: (1) of at least 5 net tons; (2) not registered under the laws of a foreign country; and (3) owned by a citizen of the United States (See 46 U.S.C. 12102; 46 CFR Subpart 67.03). There is no residency requirement for United States vessel documentation.

Customs has ruled that an undocumented pleasure vessel which is numbered under a State numbering system may not be considered an undocumented American pleasure vessel unless it qualifies, except for tonnage, for documentation under 46 U.S.C. 12102.

Consistent with this conclusion, a "licensed yacht or undocumented American pleasure vessel" does not include a pleasure vessel documented under a foreign flag, regardless of whether it is owned by a citizen of the United States and regardless of whether it is numbered under a State numbering system; and an undocumented pleasure vessel owned by a foreign citizen, regardless of whether it is numbered under a State numbering system. The Customs Regulations provide under section 4.3, footnote 9 (19 CFR 4.3 n. 9) that, "Every undocumented vessel of 5 net tons or over owned by an alien, whether or not such alien is a resident of the United States is a foreign vessel". (Consistent with this position, see also The Chiquita, 19 F.2d 417 (1927); Moore, International Law, vol. 2 pp. 1002- 1009, cited in The Chiquita; and 80 Corpus Juris Secundum 569, citing The Chiquita; but see contra, 46 U.S.C. 2101(46) defining "vessel of the United States" to include numbered vessels for purposes of 46 U.S.C. Subtitle II (These laws do not include laws relating to Customs entry requirements)). Generally, a vessel such as the subject vessel, which is 41', will admeasure over 5 net tons.

With regard to state numbering, we note that under the Coast Guard Regulations on state numbering, a state numbering system may require the numbering of any vessel subject to the jurisdiction of the state with certain exceptions (see 33 CFR 174.11(b)).

A vessel with a state certificate or number is not considered "a documented vessel" as that term is used under laws and regulations administered by the Customs Service. Since Mr. Elliott is a citizen of the United Kingdom, until such time as his vessel becomes documented in the United Kingdom or other foreign country, Customs considers his vessel an undocumented U.K. vessel.

Title 46, United States Code Appendix, section 104 (46 U.S.C. App. 104), authorizes the issuance of cruising licenses to pleasure vessels of countries which extend reciprocal privileges to United States pleasure vessels. Great Britain is such a country. The determining factor as to whether a vessel is eligible for a cruising license is the documentation of the vessel and not the residency of the owner. The license is granted subject to the condition that the vessel will not engage in trade or violate the laws of the United States in any respect. (See 19 CFR 4.94(c), copy enclosed). A cruising license does not exempt a vessel from the requirement to report its arrival in the United States to Customs immediately upon such arrival (see 19 U.S.C. 1433 and 19 CFR 4.2). If the subject vessel were documented under the United Kingdom or another country which extends reciprocal privileges to the United States, it would be eligible for a cruising license.

Finally, you should be aware that under the provisions of section 4.2a of the Customs Regulations (19 CFR 4.2a), there are special requirements for reporting of arrival from any foreign port or place by small vessels whose intended destination is a point within the jurisdiction of Miami, Florida. Operators of small vessels (i.e. any vessel of less that 5 net tons, and any private vessel, regardless of displacement) shall immediately report their arrival in the United States. With regard to the trip from Miami to Boca Raton and return, Mr. Elliot would have to clear his vessel at the port of Miami for the outbound trip and report his arrival, enter and clear the vessel at the port of West Palm Beach for his return trip to Miami. A permit to proceed may be issued on either his outbound trip and/or his inbound trip to other U.S. ports where he wishes to make stops.

Section 4.61(d) of the Customs regulations provides that clearance shall not be granted to any foreign vessel using the flag of the United States or any distinctive signs or markings indicating that the vessel is an American vessel (see 22 U.S.C. 454a).

Information concerning the flying of flags on vessels may be obtained from the U.S. Coast Guard, Seventh Coast Guard District, Miami, Florida, telephone number 305-536-5651. You may also wish to refer to Chapman's Nautical Guides on boating etiquette.

HOLDING:

An undocumented pleasure vessel owned by a resident alien in the United States, whether state registered or not, is for Customs purposes considered an undocumented foreign vessel; and is not exempt from entry and clearance within the meaning of the provisions in 19 U.S.C. 1441(3) and 46 U.S.C. App. 91.

Sincerely,

B. James Fritz

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