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HQ 112189

April 21, 1992

VES-3-02-CO:R:IT:C 112189 LLB

CATEGORY: CARRIER

Mr. Pierre Rosier
Marine Charters, Inc.
P.O. Box 828
Kihei, Hawaii 96753

RE: Coastwise trade; Voyage to nowhere; Whale watching; Recreational diving; Charter fishing; Registry endorsement

Dear Mr. Rosier:

Reference is made to your letter of April 2, 1992, in which you request that we rule upon the applicability of the statutory restriction on the coastwise transportation of passengers to whale watching, recreational diving, and charter fishing activities conducted in a "voyage to nowhere" context aboard a non-coastwise qualified vessel.

FACTS:

The vessel in question was built in the United States but has sufficient foreign ownership interests to preclude its documentation for the coastwise trade. The Coast Guard has documented the vessel under United States law with a registry endorsement. It is proposed that paying passengers be taken aboard the vessel at Maalaea Harbor, Hawaii, and proceed into international waters. Once there, the passengers would engage in whale watching, recreational diving, or charter fishing activities before being returned to the same point at which they boarded the vessel in order to disembark.

ISSUE:

Whether passengers may be taken on voyages to nowhere on a non-coastwise-qualified vessel for purposes of whale watching, recreational diving, or charter fishing.

LAW AND ANALYSIS:

The Act of June 19, 1886, as amended (24 Stat. 81; 46 U.S.C. App. 289, sometimes called the coastwise passenger law), 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 a penalty of $200 for each passenger so transported and landed.

For your general information, we have consistently interpreted this prohibition to apply to all vessels except United States-built, owned, and properly documented vessels (see 46 U.S.C. 12106, 12110, 46 U.S.C. App. 883, and 19 C.F.R. 4.80).

In interpreting the coastwise laws as applied to the transportation of passengers, the Customs Service has ruled that the carriage of passengers entirely within territorial waters, even though the passengers disembark at their point of embarkation and the vessel touches no other point, is considered coastwise trade subject to the coastwise laws. However, the transportation of passengers to the high seas or foreign waters and back to the point of embarkation, assuming the passengers do not go ashore, even temporarily, at another United States point, often called a "voyage to nowhere," is not considered coastwise trade. The territorial waters of the United States consist of the territorial sea, defined as the belt, three nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline.

The first of these positions, regarding transportation of passengers entirely within territorial waters on a voyage in which they embark and disembark at the same coastwise point is based on a 1900 decision (Treasury Decision 22275). Our rulings have consistently followed this position.

The second of these positions, regarding transportation of passengers from a point in the United States to the high seas or foreign waters and back to the same point, is based on a 1912 opinion of the Attorney General of the United States (29 Opinions of the Attorney General 318). We have consistently followed this position as well.

There are, however, particular restrictions as concerns charter fishing operations. The Bureau of Navigation and Steamboat Inspection (the predecessor agency to the Customs Service in the administration of the coastwise and other navigation laws) ruled in 1936 (Circular Letter No. 103, June 3, 1936), that the carriage of fishing parties to the high seas or foreign waters and back to the passenger's point of embarkation, is an engagement in coastwise trade for which proper coastwise documentation is required. This position was subsequently affirmed by the Customs Service with the publication of Treasury Decision 55193(2) in 1960. Administrative rulings since that published ruling have consistently held likewise.

HOLDING:

Following a thorough review of the facts and analysis of the law and applicable precedents, we have determined that passengers may be taken on a non-coastwise-qualified vessel from a coastwise point, into international waters, and back to the same coastwise point for the purpose of engaging in whale watching or recreational diving activities while in international waters. The same itinerary is not permissible, however, when the activity engaged in is charter party fishing.

Sincerely,

B. James Fritz

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