HQ 0112210 - Coastwise Trade; Passengers; 46 U.S.C. App. 289 - United States International Trade Commision Rulings

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HQ 112210

April 28, 1992

VES-3-06-CO:R:IT:C 112210 GEV

CATEGORY: CARRIER

R. Lawrence Kurt, Esq.
Nemirow, Hu, Kurt & Tankersley
300 Poydras Street
Suite 2222
New Orleans, Louisiana 70130

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

Dear Mr. Kurt:

This is in response to your letter dated April 6, 1992, requesting a ruling on behalf of your client, Lykes Bros. Steamship Co., Inc. ("Lykes"), as to whether a proposed passenger service on several of their vessels is in compliance with 46 U.S.C. App. 289. Our ruling is set forth below.

FACTS:

Lykes is an American-owned steamship company engaged in the worldwide ocean transportation of cargo and passengers using owned and chartered vessels, of both American and foreign flags, ownership and crew. Lykes is contemplating passenger service initially performed by vessels which, although now U.S.-flagged, owned and manned, were foreign built. These vessels are the ADABELLE LYKES, CHARLOTTE LYKES, MARGARET LYKES, and the SHELDON LYKES.

The aforementioned vessels were the subject of special legislation (Section 134 of Public Law 98-151, 97 Stat. 981) permitting them to be deemed U.S.-built for certain purposes, but such purposes did not include the Jones Act (46 U.S.C. App. 883). A proposed itinerary for two consecutive voyages of a particular vessel, including passenger activity, is as follows.

DAY PORT PASSENGER ACTIVITY

Voyage 1

1 Galveston, TX
3 New Orleans, LA Embark Passengers
A, B, C & D

6-7 Norfolk, VA
16-17 Antwerp, Belgium
18 Bremerhaven, Germany Disembark Passenger A 19-20 Felixstowe, England
30 Norfolk, VA
31 Charleston, SC Disembark Passenger B
32 Miami, FL Embark Passengers
E, F & G
35-36 Vera Cruz, Mexico Disembark Passengers 37 Altamira, Mexico Embark Passenger H
39 Galveston, TX Disembark Passengers

Voyage 2

40 Galveston, TX Disembark Passenger D
42 New Orleans, LA
45-46 Norfolk, VA
55-56 Antwerp, Belgium
57 Bremerhaven, Germany
58-59 Felixstowe, England
69 Norfolk, VA
70 Charleston, SC
71 Miami, FL
74-75 Vera Cruz, Mexico
75-76 Altamira, Mexico
78 Galveston, TX Disembark Passenger E

In addition to the above passenger service, the vessel itinerary would include the transportation of cargo. The vessel would load cargo in U.S. Gulf and Atlantic ports (Galveston, New Orleans and Norfolk) for discharge in North Europe. In North Europe, she would load cargo for discharge in U.S. Gulf and Atlantic ports and in Mexico. Upon return from North Europe, at U.S. Atlantic ports she would discharge cargo from North Europe and load cargo for Mexico. In Mexico she would discharge cargo from North Europe and the U.S. and load cargo destined for North Europe and the U.S.

ISSUES:

1. Whether the transportation of passengers aboard a non- coastwise-qualified vessel on the itinerary described above constitutes a violation of 46 U.S.C. App. 289.

2. Whether the transportation of cargo aboard a non- coastwise-qualified vessel as described above constitutes a violation of 46 U.S.C. App. 883.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, section 883 (the merchandise coastwise law often called the "Jones Act") prohibits the transportation of merchandise between United States coastwise points, either directly or via a foreign port, or for any part of the transportation, 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.

In interpreting section 883, Customs has ruled that a point in United States territorial waters is a point in the United States embraced within the coastwise laws. The territorial waters of the United States consist of the territorial sea, defined as the belt, 3 nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline, in cases where the baseline and the coastline differ.

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))

The applicable Customs Regulations promulgated pursuant to 46 U.S.C. App. 289 are set forth in title 19, Code of Federal Regulations, section 4.80a (19 CFR 4.80a). Section 4.80a(b)(2), Customs Regulations (19 CFR 4.80a(b)(2)), provides that a coastwise violation occurs if a passenger is on a voyage to one or more coastwise points and a nearby foreign port or ports (but at no other foreign port) and the passenger disembarks at a coastwise port other than the port of embarkation. Section 4.80a(b)(3), Customs Regulations (19 CFR 4.80a(b)(3)), provides that no coastwise violation occurs if a passenger is on a voyage to one or more coastwise ports and a distant foreign port or ports (whether or not the voyage includes a nearby foreign port or ports) and the passenger disembarks at a coastwise port provided the passenger has proceeded with the vessel to a distant foreign port. (see 19 CFR 4.80a(a)(1)(2)(3) and (4) for the definitions of the terms "coastwise port," "nearby foreign port," "distant foreign port," "embark," and "disembark," as those terms are used in the regulation)

In regard to the proposed cruise itinerary with respect to Passengers A-H, we confirm your understanding of section 4.80a, Customs Regulations as follows.

Passenger A: The transportation of Passenger A from New Orleans to Bremerhaven would not constitute a violation of the passenger coastwise law because the passenger has not disembarked at a coastwise port.

Passenger B: The transportation of Passenger B from New Orleans to Charleston (via Norfolk, Antwerp, Bremerhaven, Felixstowe and Norfolk) would not constitute a violation of the passenger coastwise law because the passenger has proceeded with the vessel to a "distant foreign port" (i.e., Antwerp, Bremerhaven and Felixstowe) in compliance with 19 CFR

Passenger C: The transportation of Passenger C from New Orleans to Vera Cruz would not constitute a violation of the passenger coastwise law because the passenger has not disembarked at a coastwise port.

Passenger D: The transportation of Passenger D from New Orleans to Galveston (via Norfolk, Antwerp, Bremerhaven, Felixstowe, Norfolk, Charleston, Miami, Vera Cruz and Altamira) would not constitute a violation of the passenger coastwise law because the passenger has proceeded with the vessel to a "distant foreign port" (i.e., Antwerp, Bremerhaven and Felixstowe) in compliance with 19 CFR 4.80a(b)(3).

Passenger E: The transportation of Passenger E from Miami to Galveston (via Vera Cruz, Altamira, Galveston, New Orleans, Norfolk, Antwerp, Bremerhaven, Felixstowe, Norfolk, Charleston, Miami, Vera Cruz and Altamira) would not constitute a violation of the passenger coastwise law because the passenger has proceeded with the vessel to a "distant foreign port" (i.e., Antwerp, Bremerhaven and Felixstowe) in compliance with 19 CFR

Passenger F: The transportation of Passenger F from Miami to Vera Cruz would not constitute a violation of the passenger coastwise law because the passenger has not disembarked at a coastwise port.

Passenger G: The transportation of Passenger G from Miami to Galveston (via Vera Cruz and Altamira) would constitute a violation of the passenger coastwise law because the passenger has made a voyage between coastwise points which included only a call at "nearby foreign ports" (Vera Cruz and Altamira) in violation of 19 CFR 4.80a(b)(2).

Passenger H: The transportation of Passenger H from Altamira to Galveston would not constitute a violation of the passenger coastwise law because the passenger did not embark at a coastwise port.

In regard to the transportation of cargo as described above, we note that it involves movements between the U.S. and Europe, the U.S. and Mexico, and Europe and Mexico. These movements constitute no coastwise transportation in violation of 46 U.S.C. App. 883.

HOLDINGS:

1. The transportation of passengers aboard a non-coastwise- qualified vessel on the itinerary described above does not constitute a violation of 46 U.S.C. App. 289 with the exception of the transportation of Passenger G.

2. The transportation of cargo aboard a non-coastwise- qualified vessel as described above does not constitute a violation of 46 U.S.C. App. 883.

Sincerely,

B. James Fritz

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