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HQ 113304




January 11, 1995

Alex M. Gonzalez, Esq.
Holland & Knight
701 Brickell Avenue
Miami, Florida 33131

RE: Coastwise transportation; 46 U.S.C. App. 289; 19 CFR 4.50(b); Passengers

Dear Mr. Gonzalez:

This is in response to your letter dated January 9, 1995.

FACTS:

You state as follows:

The interested party would like to use the [foreign-flag] Vessel as a vehicle to transport friends of the corporate owner on a promotional golfing week. Existing or potential clients of th e corporate owner (hereinafter referred to as "guests") will board the Vess el in Miami, Florida for a one week voyage. There will be approximately ten (10) passengers per voyage. No money will change hands between the guests or the corporate owner. The cruise's main purpose is to make periodic stops at various golf courses along the Florida coastline. The only benefit the guests will enjoy is room and board for one week. The guests will then disembark at West Palm Beach, Florida.

ISSUE:

Whether a foreign-flag vessel may engage in the proposed activity.

LAW AND ANALYSIS:

Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. A vessel that is built in, documented under the laws of, and owned by citizens of the United States, and which obtains a coastwise endorsement from the U.S. Coast Guard, is referred to as "coastwise qualified."

The coastwise laws generally apply to points in the territorial sea, which is defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline.

The coastwise law applicable to the carriage of passengers is found in 46 U.S.C. App. 289 and 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 a penalty of $200 for each passenger so transported and landed.

Section 4.50(b), Customs Regulations (19 CFR 4.50(b)) states as follows:

A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business.

It is our determination that the existing or potential clients of the corporate owner are passengers within the meaning of 46 U.S.C. App. 289 and 19 CFR 4.50(b). The clients are not connected with the operation, navigation, ownership, or business of the vessel. Accordingly, they may not be transported from one coastwise point to another coastwise point as proposed.

HOLDING:

The individuals proposed to be transported are passengers within the meaning of 46 U.S.C. App. 289 and 19 CFR 4.50(b). Accordingly, they may not be transported as proposed.

Sincerely,

Arthur P. Schifflin
Chief

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