HQ 0112172 - Coastwise; Passengers; Youth Training and Sailing School; 46 U.S.C. App. 289. - United States International Trade Commision Rulings

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HQ 112172

May 13, 1992

VES-3-19-CO:R:P:C 112172 MAR

CATEGORY: CARRIER

Mr. J. Stanton Keck
Managing Director
14150 N.E. 21st St.
Bellevue, Wa. 98007

RE: Coastwise; Passengers; Youth Training and Sailing School; 46 U.S.C. App. 289.

Dear Mr. Keck:

This letter is in response to your inquiry of March 26, 1992, in which you request a ruling regarding the use of a sailing vessel in United States territorial waters.

FACTS:

In your letter, you state that you intend to use a sailing vessel to offer sailing instruction to youth participating in a program supported by the U.S. Navy and the U.S. Naval Academy Alumni Association. Presently, the sailing vessel is being restored and is near completion. You do not state, however, whether the sailing vessel is foreign-built or American-built.

ISSUE:

Whether the use of a pleasure vessel for sailing instruction would be in violation of the coastwise passenger law, 46 U.S.C. App. 289. LAW AND ANALYSIS:

The coastwise laws generally prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a United States built, owned, and documented vessel. 46 U.S.C. App. 289 (Supp. III 1985) & 46 U.S.C.A. 883 (West Supp. 1990). Points in the United States embraced within the coastwise laws include the United States territorial waters. The territorial waters of the United States consist of a belt, three nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline.

The Customs Regulations define "passenger" for purposes of section 289 as "any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business." See 19 CFR 4.50(b)(1989). The Customs Service has held that a person being trained or receiving instruction in the handling or navigation of a vessel, and whose presence on board the vessel is required in order to receive such training or instruction, is not a "passenger" within the coastwise laws. Accordingly, if the vessel is used only for such training, then it would not be required to have a license to engage in the coastwise trade. See Headquarters Ruling Letter 109850, dated December 27, 1988, and Headquarters Ruling Letter 109287, dated February 24, 1988.

Therefore, the sole use of a foreign sailing vessel in connection with a bona fide instructional course in sailing and navigation does not constitute coastwise trade within the meaning of 46 U.S.C. App. 289. However, all persons being carried in the vessel must be involved with the operation, navigation, or business of the vessel. Persons who are carried on board a vessel for recreational purposes and who pay a fee for such carriage would be considered "passengers," and their carriage between places in the United States or entirely within United States waters would be in violation of the coastwise laws.

In your letter you do not state whether the sailing vessel is foreign-built or American-built. For purposes of our analysis, however, this distinction does not change the result so long as if the sailing vessel is foreign-built, it is being used solely for an instructional purposes (see above). If the vessel is American-built, then 46 U.S.C. 289 is nonapplicable. For future reference, please note the that is required to obtain a Customs Letter Ruling as detailed in section 177.2(b) of the Customs Regulations (19 CFR 177.2(b)). A copy is enclosed for your reference.

As 19 CFR 177.2(b)(iv) indicates, it is required that information relating to place of build and nationality of registration be included. Specifically, the regulations state:

If the transaction involves a vessel, the request for a ruling should include information relating to place of build and nationality of registration and, if to be used in waters under the jurisdiction of the U.S., the exact place or places of intended use, if known. If the request for a ruling involves a determination as to whether or not the primary object of a contemplated voyage would be considered to be coastwise transportation in violation of 46 U.S.C. 289 (see 4.80a of this chapter), the request should completely identify the voyage, including the proposed time of arrival at and departure from every port on the itinerary and any coordination of the voyage with special events at coastwise ports, and should be accompanied by samples, if available, of brochures, advertising, and other information that may be relevant to a determination of the primary object of the proposed voyage.

HOLDING:

The sole use of a foreign sailing vessel in connection with a bona fide instructional course in sailing and navigation is not coastwise trade in violation of 46 U.S.C. App. 289.

This letter addresses only those federal requirements that are administered by the United States Customs Service. While we are unaware of any federal or state agency requirements that might pertain to the undertaking you describe, it is possible that such requirements exist.

Sincerely,

B. James Fritz
Chief

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