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HQ 112083


February 26, 1992

VES 3-02 CO:R:IT:C 112083 MLR

CATEGORY: CARRIER

John F. Weigold
President
Catamaran Lines, Inc.
2008 W. Main Street
Stamford, Connecticut 06902

RE: Passenger Coastwise Law; 46 U.S.C app. 289

Dear Mr. Weigold:

This is in reference to your facsimile dated February 17, 1992, concerning the proposed transport of commuters.

FACTS:

Catamaran Lines, Inc. plans to have two vessels built in the United States to transport approximately 20,000 commuters daily from Haverstraw, New York, to the World Trade Center, via the Hudson River. According to Catamaran Lines, such a mass transit system would reduce commuting time, which is currently four hours per day by bus, and provide employment for numerous tradesmen who construct the vessels. While the vessels are being built, and to prove that the project is viable, Catamaran Lines plans to temporarily lease two vessels. The leased vessels were built in Norway and are documented under the Bahamian flag.

ISSUE:

Whether the use of a foreign-built, foreign-documented vessel, intended to transport commuters between Haverstraw, New York, and the World Trade Center, is prohibited by the coastwise trade laws.

LAW AND ANALYSIS:

Generally, the coastwise laws (e.g., 46 U.S.C. app. 289 and 883, and 46 U.S.C. 12106 and 12110) 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 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).

The passenger coastwise law, title 46 United States Code Appendix, section 289 (46 U.S.C. app. 289), 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 penalty of $200 for each passenger so transported and landed.

For purposes of the coastwise laws, a vessel "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).

The coastwise laws, as well as the other navigation laws administered by the Customs Service, are applicable to those vessels engaged in activities in the territorial and navigable waters of the United States, and the territorial and navigable waters of its territories and possessions. The territorial waters of the United States consist of the belt, 3 nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline. At the date of this letter, the recent Presidential Proclamation (dated December 27, 1988), proclaiming a 12 nautical mile territorial sea, has extended the jurisdiction of the United States only for international purposes and has not extended or changed existing federal and state laws. The term navigable waters, defined in Coast Guard regulations (33 C.F.R. 2.05-25), include the territorial sea of the United States, the internal waters of the United States subject to tidal influence, and certain other internal waters that are not subject to tidal influence.

In interpreting the coastwise laws as applied to the transportation of passengers, we have ruled that the carriage of passengers entirely within territorial waters, even though they disembark at their point of embarkation and the vessel touches no other coastwise point, is considered coastwise trade subject to the coastwise laws. However, the transportation of passengers to the high seas (i.e., beyond U.S. territorial waters) or foreign waters and back to the point of embarkation, often called a "voyage to nowhere," is not considered coastwise trade, assuming the passengers do not go ashore, even temporarily, at another United States point. Accordingly, the use of a foreign-built, foreign-documented vessel to transport commuters between two places in the United States via the Hudson River would violate the coastwise laws.

The only statute authorizing the waiver of the coastwise laws is the Act of December 27, 1950 (64 Stat. 1120; note preceding 46 U.S.C. app. 1). Under the authority of this statute, the Secretary of the Treasury may waive compliance with the provisions of the navigation laws, including the coastwise laws, "when he deems that such action is necessary in the interest of national defense." If the Secretary of Defense requires such a waiver in the interest of national defense, the Secretary of the Treasury is directed by the statute to grant the waiver. We naturally recognize that exigent commercial and other interests may in certain circumstances exist to which the statutory restriction against the use of non-coastwise-qualified vessels to transport passengers between coastwise points, poses an impediment; however, there is no legal basis to set aside the prohibition of 46 U.S.C. app. 289 in such circumstances.

HOLDING:

The use of a foreign-built, foreign-documented vessel intended to temporarily transport commuters between Haverstraw, New York, and the World Trade Center, via the Hudson River, is prohibited by the coastwise laws.

Sincerely,

B. James Fritz

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