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HQ 111832

February 10, 1992

VES-3-07-CO:R:IT:C 111832 GEV

CATEGORY: CARRIER

William E. Owens
Operations Manager
Ivaran Agencies, Inc.
Newport Financial Center
111 Pavonia Avenue
Jersey City, N.J. 07310-1755

RE: Coastwise Trade; Passengers; 46 U.S.C. App. 289c

Dear Mr. Owens:

This is in reference to your letter dated October 4, 1991, enclosing a copy of your letter to Kathleen M. Haage, Area Director, U.S. Customs Service, Newark, New Jersey, and her response advising you to contact the Carrier Rulings Branch at Customs Headquarters in Washington, D.C. for a ruling on this matter. Our ruling is set forth below.

FACTS:

Ivaran Agencies operates a vessel service between the United States and the east coast of South America. One of the vessels on this service is the M.S. AMERICANA, a Norwegian-flag, passenger/container vessel. This vessel has recently begun calling San Juan, Puerto Rico for containers to and from South American ports, and has found some interest their passenger service to the United States, most notably, the Port of New York. Ivaran Agencies has contacted Customs as to the ramifications of this passenger service with respect to the administration of the coastwise laws.

ISSUE:

Whether the use of a foreign-flag vessel to transport passengers between Puerto Rico and the United States is permitted pursuant to 46 U.S.C. App. 289c.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, section 289 (46 U.S.C. App. 289, the passenger coastwise law), 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 (i.e., any vessel not built in and documented under the laws of the United States and owned by persons who are citizens of the United States). For purposes of section 289, "passenger" is defined as "...any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business." (19 CFR 4.50(b))

However, Public Law 98-563, which was signed into law on October 30, 1984, and became effective on November 15, 1984, created an exception to the passenger coastwise law by providing that passengers may be transported between ports in the United States and Puerto Rico on non-coastwise-qualified vessels only on the condition that coastwise-qualified service for such transportation is not available. This exception is codified at 46 U.S.C. App. 289c and set forth in the Customs Regulations at 19 CFR 4.80a(c). There is no such coastwise-qualified service at this time.

Accordingly, passengers may be transported on the M.S. AMERICANA between Puerto Rico and the United States without violating the passenger coastwise law.

HOLDING:

The use of a foreign-flag vessel to transport passengers between Puerto Rico and the United States is permitted pursuant to 46 U.S.C. App. 289c.

Sincerely,

B. James Fritz

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