HQ 0112472 - Coastwise Trade: Foreign-built vessel; "bunkhouse for divers"; transportation of divers; abalone fishing; towing - United States International Trade Commision Rulings

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HQ 112472

October 26, 1992

VES-3-04 CO:R:IT:C 112472 BEW

CATEGORY: CARRIER

Mr. Larry Trani
2008 Halibut Point Road
Sitka, Alaska 00835

RE: Coastwise Trade: Foreign-built vessel; "bunkhouse for divers"; transportation of divers; abalone fishing; towing

Dear Mr. Trani:

This is in reference to your letter of September 24, 1992, and your telephone conversation of September 23, 1992, requesting a ruling regarding the application of the Jones Act to the use of a Taiwanese-built, 39 foot, U.S. documented vessel, the M/V ZARINA, for a diving fishery, and to tow a U.S.-flag commercial fishing vessel within the territorial waters of the U.S.

FACTS:

The vessel M/V ZARINA will be used to transport, in addition to its captain and crew, divers and their diving gear to and from the diving sites for the purpose of harvesting abalone. You state that while at the diving site, the vessel will be used as a bunkhouse (serve meals and provide berths) for the crew, captain and divers. You state that all of the diving will take place from a U.S.-flag commercial fishing vessel, and that vessel will transport the harvested products. You further state that the fishing vessel will transport the harvested products while under her own power, however, the M/V ZARINA will be used to tow the fishing vessel to and from the dive sites located within the territorial waters of the U.S.

ISSUES:

1. Whether the use of a foreign-built vessel for a bunkhouse for the captain, crew, and divers within the territorial waters of the United States is a violation of 46 U.S.C. App. 883 and/or 289.

2. Whether the use of a foreign-built vessel to transport divers and their diving gear for the purpose of a "diving fishery" within the territorial waters of the United States is a violation of 46 U.S.C. App. 883 and/or 289. 3. Whether the use of a foreign-built vessel to tow a U.S.- flag commercial fishing vessel to and from dive sites located in the territorial waters of the United States is a violation of 46 U.S.C. App. 316(a).

LAW ANALYSIS:

The coastwise law pertaining to the transportation of merchandise, section 27 of the Act of June 5, 1920, as amended (41 Stat. 999; 46 U.S.C. App. 883, often called the Jones Act), provides that:

No merchandise shall be transported by water, or by land and water, on penalty of forfeiture of the merchandise (or a monetary amount up to the value thereof as determined by the Secretary of the Treasury, or the actual cost of the transportation, whichever is greater, to be recovered from any consignor, seller, owner, importer, consignee, agent, or other person or persons so transporting or causing said merchandise to be transported), between points in the United States ... embraced within the coastwise laws, either directly or via a foreign port, or for any part of the transportation, in any other vessel 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 ....

"Merchandise" is defined in section 1401(c) of title 19, United States Code, to include goods, wares, and chattels of every description, and includes fish, fish products, and fish packaging materials that are assembled into packages containing fish. Section 883 specifically provides that, for purposes of its provisions, "merchandise" includes valueless material (Pub.L. 100-329; 102 Stat. 588). The transportation of valueless material, whether or not it has commercial value, from a point or place in the United States or point or place on the high seas within the Exclusive Economic Zone (EEZ) as defined in the Presidential Proclamation of March 10, 1983, to another point or place in the United States or a point or place on the high seas within that EEZ would also be prohibited under the provisions of section 883.
The passenger coastwise 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 section 289, 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 CFR 4.80a) is interpretive of section 289.

In its administration of 46 U.S.C. App. 289, 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 coastwise point, is considered coastwise trade subject to coastwise laws. However, the transportation of passengers to the high seas (i.e., beyond U.S. territorial 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. It should be noted that the carriage of fishing parties for hire, even if the vessel proceeds beyond territorial waters and returns to the point of the passenger's embarkation, is considered coastwise trade (T.D. 55193(2)).

Accordingly, given the foregoing definition of "passenger", the divers in the subject case would be considered passengers in that they would be considered the same as "fishing parties for hire".

In interpreting the coastwise laws, Customs has ruled that a point in United States territorial waters is considered a point embraced within the coastwise laws. The coastwise laws generally apply to points in the territorial sea, defined as the belt, three (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.

The vessel under consideration, as a foreign-built vessel, would be precluded from engaging in the coastwise trade. As noted above, 46 U.S.C. App. 289 and 883, prohibit the transportation between points in the United States of passengers or merchandise in a non-coastwise-qualified vessel. However, a foreign-built vessel not qualified to engage in the coastwise trade which is permanently moored or anchored, can be used as a "bunkhouse" without violating either statute. Since the divers would however, be considered passengers, and their equipment would be considered merchandise, their transportation to and from the diving sites located in territorial waters of the United States would be in violation of both 46 U.S.C. App. 289 and 883.

Legitimate equipment and ship stores for use of the vessel and crew may be transported from a coastwise point to other coastwise points without violating the coastwise laws.

In the case under consideration, you indicate that the M.V. ZARINA will tow the Boston Whaler, a U.S.-flag commercial fishing vessel, to and from the dive sites. Section 316(a), as amended by the Act of May 19, 1986 (Pub. L. 99-307 (46 U.S.C. App. 316(a)), prohibits the towing between coastwise points of any vessel except a vessel in distress, by any vessel other than a vessel of the United States issued a certificate of documentation with a coastwise or Great Lakes endorsement (see 46 U.S.C. App. 12106, 12107). This restriction extends to certain territories and possessions of the United States, to towing between points within the same harbor, and to direct, indirect, or partial towing operations. Accordingly, the towing of the Boston Whaler by the M/V ZARINA would be a violation of the towing statute.

HOLDING:

1. The use of a foreign-built vessel, the M/V ZARINA as a bunkhouse for the captain, crew and divers, if permanently moored or at anchor, is not a violation of 46 U.S.C. App 289 and/or 883.

2. The use of a foreign-built vessel to transport divers and their diving gear for the purpose of a "diving fishery" within the territorial waters of the United States is a violation of 46 U.S.C. App. 883 and/or 289.

3. The use of a foreign-built vessel to tow a U.S.-flag commercial fishing vessel to and from dive sites located in the territorial waters of the United States is a violation of 46 U.S.C. App. 316(a).

Sincerely,

B. James Fritz
Chief

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