HQ 0113259 - Coastwise Trade; Passengers; Voyage-to-nowhere; M/V TECUMSEH; 46 U.S.C. App. 289 - United States International Trade Commision Rulings

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HQ 113259

October 28, 1994

VES-3-02-CO:R:IT:C 113259 GEV

CATEGORY: CARRIER

Paul S. Array
Director
American Cruise Lines, Inc.
819 Peacock Plaza
Suite 610
Key West, Florida 33040

RE: Coastwise Trade; Passengers; Voyage-to-nowhere; M/V TECUMSEH; 46 U.S.C. App. 289

Dear Mr. Array:

This is in response to your letter of October 21, 1994, requesting a ruling regarding the proposed use of the above- referenced vessel. Our ruling on this matter is set forth below.

FACTS:

The M/V TECUMSEH is a U.S.-built passenger vessel which was operated in the Detroit area under the U.S.-flag from 1984 until 1993. In 1993 the vessel's owners removed her from U.S. registry and placed her in Canadian registry where she remained for less than a year. The vessel never actually operated under her Canadian registry but nonetheless lost her lawful right to engage in the U.S. coastwise trade as a result of it.

In August of 1994, American Cruise Lines, Inc. purchased the M/V TECUMSEH and subsequently removed her from Canadian registry and re-documented her under the U.S. flag. The vessel re-entered the U.S. at Detroit and was delivered to Fort Lauderdale, Florida, where she now lies.

American Cruise Lines, Inc. attempted to have the vessel's coastwise trade privileges restored through a legislatively enacted waiver. Although the Congressional bill to which the waiver was attached did pass the House of Representatives, it was not attended to by the Senate before its adjournment for the 1994 session. As a result, notwithstanding the fact that the bill may be re- introduced in the next session of Congress and may eventually be passed in 1995, the vessel will continue to be ineligible to engage in the coastwise trade until such time as passage of the waiver occurs.

The above-referenced legislative delay has prompted American Cruise Line, Inc. to request that the M/V TECUMSEH be permitted to begin operation this winter tourist season in a limited manner in the coastwise trade pending passage of the aforementioned waiver. Specifically, it is proposed to use the vessel for short (2 to 4 hour) sightseeing/party excursions taking passengers from and returning them to the vessel's regular berth in Key West, Florida. The vessel will make no other stops during these excursions; she will call at no other port during her commercial operations other than her home port. No passengers will embark or disembark at any other place other than the vessel's berth in Key West.

The subject vessel is presently being re-certified by the U.S. Coast Guard for operation in the partially protected waters of the Key West area. It is requested that the vessel be allowed to cruise just 1/2 mile from Key West during the excursions described above as it is felt that this distance is more prudent for this type of ride, however, it can cruise at a further distance if deem necessary by Customs.

ISSUE:

Whether the transportation of passengers aboard a non- coastwise-qualified vessel solely within the 3-mile U.S. territorial sea, even though the passengers disembark at their point of embarkation without going ashore at any other coastwise point, constitutes a "voyage-to-nowhere" thereby obviating the applicability of 46 U.S.C. App. 289.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, 289 (46 U.S.C. App. 289, the passenger coastwise law) as interpreted by the Customs Service, prohibits the transportation of passengers between points in the United States embraced within the coastwise laws, either directly or by way of a foreign port, in a non-coastwise-qualified vessel (i.e., any vessel that is 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 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)) Section 4.80a, Customs Regulations (19 CFR 4.80a) is interpretive of 289.

Parenthetically, we note that 46 U.S.C. App. 289 is interpreted in pari materia with title 46, United States Code Appendix, 883 (46 U.S.C. App. 883, the coastwise merchandise law often called the "Jones Act"), the first proviso of which - 3 -
provides, "[t]hat no vessel having at any time acquired the lawful right to engage in the coastwise trade, either by virtue of having been built in, or documented under the laws of the United States, and later sold foreign in whole or in part, or placed under foreign registry, shall hereafter acquire the right to engage in the coastwise trade." (emphasis added)

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 (29 O.A.G. 318 (1912)). 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 passengers' embarkation, is considered coastwise trade (T.D. 55193(2)).

In interpreting the coastwise laws, 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.

In regard to the proposed use of the M/V TECUMSEH, the transportation of passengers on sightseeing/party excursions from the vessel's berth in Key West and returning to the same point without stopping at any other coastwise port would not violate 46 U.S.C. App. 289 provided the vessel proceeds to the high seas (see discussion above on the criteria to be met for a valid "voyage-to-nowhere"). Absent transportation of the passengers to the high seas at some point during each voyage, the proposed excursions would be in violation of 46 U.S.C. App. 289.

HOLDING:

The transportation of passengers aboard a non-coastwise- qualified vessel solely within the 3-mile U.S. territorial sea, even though the passengers disembark at their point of embarkation without going ashore at any other coastwise point,
does not constitute a "voyage-to-nowhere" and therefore is violative of 46 U.S.C. App. 289. No violation of the aforementioned statute would occur if at any time during such transportation the vessel proceeds beyond the limits of the U.S. territorial sea.

Sincerely,

Arthur P. Schifflin

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