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HQ 113336

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February 22, 1995

VES-3-07-CO:R:IT:C 113336 GEV

CATEGORY: CARRIER

S. Greentree
S.G. Management Services
12415 Dewdney Trunk Rd.
Mission, B.C., Canada V2V 5X4

RE: Coastwise Trade; Stationary Floating Platform; 46 U.S.C. App. ?? 289, 883

Dear Mr. Greentree:

This is in response to your letter dated January 30, 1995, concerning a proposed marine leisure project in the South Florida area. Our ruling on this matter is set forth below.

FACTS:

The OceanSpace Explorers Company Ltd. (OEC) is a Canadian firm that is considering using a stationary floating platform as a staging area for a small passenger submarine. The modular floating facility will be built by a U.S. manufacturer and will feature a unique submerged level containing a restaurant/lounge area with large undersea viewports. It will remain stationary and is not designed to be towed or propelled in any way. The OEC would like to place the facility at a location, readily accessible by land, within the U.S. coastal waters of the Florida Keys. A shuttle vessel will then move passengers from the floating facility to the submarine offshore.

ISSUE:

Whether the use in U.S. territorial waters of a foreign-owned, stationary, floating platform as a staging area for a small passenger submarine constitutes a violation of 46 U.S.C. App.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, ? 289 (46 U.S.C. App. ? 289, the passenger coastwise law), 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., a vessel that is not U.S.-built, owned and documented). 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." (see ? 4.50(b), Customs Regulations, (19 CFR ? 4.50(b))

Title 46, United States Code Appendix, ? 883 (46 U.S.C. App. ? 883), the merchandise coastwise law often called the "Jones Act"), provides in part, that no merchandise shall 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 vessel other than one that is coastwise-qualified. Pursuant to title 19, United States Code, ? 1401(c) (19 U.S.C. description, and includes merchandise the importation of which is prohibited."

The U.S. Customs Service has promulgated regulations pursuant to the coastwise laws referenced above. These regulations can be found in title 19, Code of Federal Regulations, ?? 4.80a and 4.80b (19 CFR ?? 4.80a, 4.80b) for passengers and merchandise, respectively.

The coastwise laws generally apply to points in the territorial sea, 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, in cases where the baseline and the coastline differ.

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 the 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)).

In regard to the proposed use of the subject floating facility, such use would not be considered an engagement in the coastwise trade provided it remains stationary. Consequently, its foreign ownership would not give rise to a violation of the coastwise laws.

Parenthetically, we note that with respect to the submarine to be used in this project, the fact that it is foreign-built would also not violate the coastwise laws provided it is used pursuant to a "voyage-to-nowhere" as discussed above, or is operated entirely outside the 3-mile U.S. territorial sea. As for the shuttle vessel moving passengers from the floating facility to the submarine, it must be coastwise-qualified unless the submarine is located outside the 3-mile territorial sea whereby its use would be akin to a "voyage-to-nowhere."

HOLDING:

The use in U.S. territorial waters of a foreign-owned, stationary, floating platform as a staging area for a small passenger submarine does not constitute a violation of 46 U.S.C. App. ?? 289, 883.

Sincerely,

Arthur P. Schifflin

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