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HQ 113395




May 7, 1995

VES-3:R:IT:C 113395 BEW
CATEGORY: CARRIER

Ms. Elizabeth E. Meyer
28 Church Street
Newport, Rhode Island 02840

Dear Ms. Meyer:

This is in reference to your letter of April 6, 1995, received by facsimile transmission, in which you request a ruling on the proposed use of your sailing vessel ENDEAVOUR to carrying passengers for hire during the pendency of the America's Cup yacht racing series in San Diego, California.

FACTS:

The ENDEAVOUR was built in England, rebuilt in Holland, and is presently documented under the laws of the United States. It is proposed that the vessel transport passengers for hire for the purpose of permitting them to observe the America's Cup yacht races. You state that vessel will go out each day during the period of April 9 through April 22, 1995, when there is America's Cup racing series for the Challenger and Defender finals, and during the period of May 6 through May 20, 1995, for the actual American's Cup. You also state that there is a possibility that the winner may not be determined until May 28, 1995.

You state that you depart your berth at San Diego Yacht Club at 10 a.m. and will sail off shore beyond the weather mark set for the race course which is well beyond the 3 mile limit of the United States territorial waters. You state that you watch the races, continually sailing up and down the course. You state that you never anchor in any one spot.

ISSUE:

Whether the proposed transportation aboard the vessel ENDEAVOUR constitutes a violation of 46 U.S.C. App. 289.

LAW AND ANALYSIS:

Generally, the coastwise laws (e.g., 46 U.S.C. App. 289 and 883, and 46 U.S.C. 12106 and 12110) 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 and documented under the laws of the United States, and owned by persons who are 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 penalty of $200 for each passenger so transported and landed.

For purposes of the section 289, 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 (TD 55193(2)).

We have consistently interpreted this prohibition to apply to all vessels except United States-built, owned, and properly documented vessels (see 46 U.S.C. §§ 12106, 12110, 46 U.S.C. App. § 883, and 19 C.F.R. § 4.80).

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.

On the basis of the foregoing interpretations by the Customs Service, vessels not qualified to engage in the coastwise trade may be operated on voyages to nowhere in which passengers are transported from a point in the United States to a point outside United States territorial waters and back to the point of the passengers' embarkation, assuming the vessel does not touch any other coastwise point.

In summary, a non-coastwise-qualified vessel may engage in the carriage of passengers for hire on voyages which originate and terminate at the same coastwise point, so long as such voyages proceed beyond the territorial sea and no stops are made at other coastwise points (including any point within the territorial waters). We note that you state that you sail out past the 3-mile limit without ever anchoring in any one spot before returning to the point of departure. Under the circumstances stated above, the non-coastwise-qualified ENDEAVOUR would not be in violation of section 289.

HOLDING:

The transportation of passengers to the high seas or foreign waters by the ENDEAVOUR and back to the point of embarkation without ever anchoring or stopping is not considered coastwise trade, and not in violation of section 289.

Sincerely,

Arthur P. Schifflin
Chief

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