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HQ 113373

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July 12, 1995

VES-3-R:IT:C 113373 LLB

CATEGORY: CARRIER

Mr. Christopher W. Hatton
President, Seaquest International, Ltd.
632 Cedargrove Place
Waterloo, Ontario, Canada N2L 4Y9

RE: Coastwise trade; Voyage to nowhere; Submarine service; 46 U.S.C. App. 289

Dear Mr. Hatton:

Reference is made to your letter of May 24, 1995, in which you request that Customs rule upon the proposed use of your foreign-built submarine vessel. Our findings are presented below.

FACTS:

It is proposed that a tourist submarine service be established to operate out of the Port of Key West, Florida. Seaquest International, Ltd., would operate a 47-passenger submarine out of that port. The vessel was constructed in Scotland. We assume that it is intended that the vessel itself take passengers aboard at Key West and transport them to dive sites, rather than have those passengers transported by other vessels to the submarine at an offshore location. The incoming letter states:

1. It is my understanding that we are permitted to carry passengers from a U.S. port without stopping at any other port, even if the vessel used is not originally built in the U.S.A. and / or the vessel's owners are not U.S. citizens.

2. Does our intended dive location about 5 miles southwest of Key West or 4 miles offshore qualify for the above scenario. The location is essentially the same as the one requested by a second group of submarine operators out of Key West who, to our knowledge, already received a ruling from your office.

3. Which other potential sites in the Key West area would fit the above scenario in order to establish an alternative dive site in case of adverse weather conditions at the main dive site. ISSUE:

May a foreign-built submarine vessel legally be utilized to transport passengers from and back to a location in the Port of Key West, Florida, proceeding in the interim to a point on the high seas located beyond the territorial waters of the United States.

LAW AND ANALYSIS:

Generally, the coastwise laws 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, documented under the laws of, and owned by citizens of the United States. 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 a penalty of $200 for each passenger so transported and landed.

In interpreting the coastwise laws as applied to the transportation of passengers, 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 point, is considered coastwise trade subject to the coastwise laws. However, the transportation of passengers to the high seas or foreign 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. See, 108228 PH (4-18-86). The territorial waters of the United States consist of the territorial sea, defined as the belt, 3 nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline.

The first of these positions, regarding transportation of passengers entirely within territorial waters on a voyage in which they embark and disembark at the same coastwise point is based on a 1900 decision (see Treasury Decision 22275). Our rulings have consistently followed this position.

The second of these positions, regarding transportation of passengers from a point in the United States to the high seas or foreign waters and back to the same point, is based on a 1912 opinion of the Attorney General of the United States (29 Opinions of the Attorney General 318). We have consistently followed this position.

In regard to the present matter, so long as passengers are transported beyond the territorial waters of the United States and back to their point of embarkation in order to be disembarked, there would be no violation of the coastwise laws so long as there was no stoppage at any other point within the territorial waters. We are unable to advise you regarding alternative dive sites. Generally, safety concerns such as are implied in your question are the province of the United States Coast Guard.

HOLDING:

The transportation of passengers in a foreign-built submersible from and back to the same coastwise point, with intervening diving operations transpiring outside of the territorial waters of the United States, does not constitute coastwise trade and would be permissible under the provisions of 46 U.S.C. App. 289.

Sincerely,

Arthur P. Schifflin

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