HQ 0112425 - Nearby Foreign Port; Coastwise Trade: Passengers; Distant Foreign Port; Foreign-Flag Vessel: 46 U.S.C. App. 289. - United States International Trade Commision Rulings

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HQ 112425

December 14, 1992

VES-3-02/07-CO:R:IT:C 112425 GFM

CATEGORY: CARRIER

Mr. Andrew K. Horton
Port Operations Manager
Regency Cruises
8880 N.W. 20th Street
Miami FL 33172

RE: Nearby Foreign Port; Coastwise Trade: Passengers; Distant Foreign Port; Foreign-Flag Vessel: 46 U.S.C. App. 289.

Dear Mr. Horton:

This is in response to your letter of August 12, 1992, which requests a ruling regarding the application of the Jones Act to the proposed itinerary of a foreign flag vessel as set forth below.

FACTS:

The proposed cruise schedule is as follows:

DAY DATE PORT ARRIVE DEPART

Friday 10/09/93 San Diego 4:00 pm
Saturday 10/10/93 At Sea
Sunday 10/11/93 At Sea
Monday 10/12/93 Puerto Vallarta 10:00 am 6:00 pm Tuesday 10/13/93 Manzanillo 7:00 am 2:00 pm Wednesday 10/14/93 Acapulco 8:00 am 5:30 pm Thursday 10/15/93 At Sea
Friday 10/16/93 At Sea
Saturday 10/17/93 Caldera/San Jose 7:30 am 6:00 pm Sunday 10/18/93 At Sea
Monday 10/19/93 Panama Canal 7:30 am 4:00 pm Tuesday 10/20/93 At Sea
Wednesday 10/21/93 Montego Bay 8:00 am 7:00 pm Thursday 10/22/93 Grand Cayman 8:00 am 1:30 pm Friday 10/23/93 At Sea
Saturday 10/24/93 Tampa 8:00 am

ISSUE:

Whether the transportation of passengers aboard a foreign-flag vessel pursuant to the above described schedule would constitute a violation of 46 U.S.C. App. 289.

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.

The coastwise passenger law, 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." (Section 4.50(b), Customs Regulations.) Section 4.80a, Customs Regulations (19 C.F.R. 4.80a) is interpretive of section 289.

The Customs Service has promulgated regulations to administer the passenger transportation statute in section 4.80a, Customs Regulations (19 C.F.R. 4.80a). The regulations provide guidelines for determining whether the movement of passengers between two coastwise points, with at least one intervening point, is considered coastwise trade. To facilitate such determinations, a distinction has been drawn between nearby foreign ports and distant foreign ports. By visiting at least one distant foreign port, a violation of the coastwise laws may be avoided on a cruise moving between U.S. ports. For ease of application, the distinction has been drawn geographically with all Canadian, Mexican, Central American, Caribbean Sea, and Gulf of Mexico points (with the exception of the Islands of Aruba, Bonaire, and Curacao), being designated as nearby foreign ports, and all others being considered distant foreign ports.

If a passenger on a voyage to a distant foreign port embarks at a coastwise point and goes ashore temporarily to take sight- seeing excursions at an intermediate U.S. port there is no violation provided that the passenger proceeds on the voyage to the distant foreign point. The relevancy of whether an intermediate foreign port is a "nearby foreign port" (as defined in 19 C.F.R. 4.80a(a)(2)) or a "distant foreign port" (as defined in 19 C.F.R. 4.80a(a)(3)) is crucial in determining whether or not a violation of section 289 has occurred.

The focus of section 289 is on the route of the vessel. Section 4.80a(b)(2) of the Customs Regulations (19 C.F.R. 4.80a(b)(2) provides that, "if the passenger is on a voyage to one or more coastwise ports and a nearby foreign port or ports (but no other foreign port) and the passenger disembarks at a coastwise point other than the port of embarkation, there is a violation of the coastwise law" (46 U.S.C. App. 289). We have ruled that if a passenger is on a voyage to one or more coastwise ports and a nearby foreign port or ports (but no other foreign port) and the passenger disembarks the vessel at a nearby foreign port or if the passenger embarks and disembarks at the same coastwise port, there is no violation of section 289. (see 19 C.F.R. 4.80a(a)(1), (2), and (4) for the definitions of the terms "coastwise port," "nearby foreign port," "embark," and "disembark," as those terms are used in the regulation).

With regard to the proposed itinerary under consideration, it is clear that each of the foreign ports to be visited has been designated as a nearby foreign port. If such passengers are to embark at San Diego, California, visit said nearby foreign ports, and eventually disembark at Tampa, Florida, in accordance with the foregoing authority, a clear violation of section 289 would result.

HOLDING:

The transportation of passengers aboard a foreign-flag vessel in accordance with the proposed schedule described above would constitute a violation of 46 U.S.C. App. 289.

Sincerely,

Acting Chief
Carrier Rulings Branch

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