HQ 113530 - Entry and Clearance; Canadian Tall Ship, Schooner BLUENOSE II; Government vessel 19 C.F. R. § 4.5 - United States International Trade Commision Rulings

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HQ 113530

September 14, 1995

VES 3.04 R:IT:C 113530 BEW

CATEGORY: CARRIER

Mr. Rick Moore
Operations Manager
Bluenose II
122 Bluenose Drive
P.O. Box 963
Luneburg, Nova Scotia BOJ 2CO

RE: Entry and Clearance; Canadian Tall Ship, Schooner BLUENOSE II; Government vessel 19 C.F. R. § 4.5

Dear Mr. Moore:

This is in reference to your letter of August 8, 1995, in which you request that the Customs Service waive the entry and clearance requirements for the BLUENOSE II which will be visiting the port of Boston, Massachusetts, during the month of September.

FACTS:

The ship is owned by the Province of Nova Scotia and is operated by the Bluenose II Preservation Trust, (civilian employees of the Canadian Government.) You state that over the past fifteen years, the ship has visited many U.S. eastern rim ports with a port visit to Boston almost every year. You state the it has been the custom of your provincial government to invite U.S. corporation executives on board the vessel for a sail as a goodwill gesture. The provincial Premier and various Departmental Ministers host citizens of the U.S. to further promote trade between the two countries. You state the province intends to facilitate a trade promotion at the Boston National Historic Park on September 27 through 29, 1995. You state that the process of officially clearing customs has been waived for the ship in previous years.

LAW AND ANALYSIS:

As a general matter, all vessels arriving in the United States may be subject to a variety of statutorily mandated duties, taxes, and fees according to the ownership, operation and use of the vessel. In its role as an administrative entity of the government of the United States, the function of the Customs Service is to interpret and implement these laws. We do not possess the power or authority to waive duties or fees unless there is a statutory exemption permits us to do so.

United States law requires the master of any foreign vessel arriving a United States port, whether from a foreign port or another United State port, to make an immediate report of arrival (19 U.S.C. §1433, 19. C.F.R.§ 4.2), and unless exempted, to make a vessel entry. Most vessels must clear when bound for a foreign port (46 U.S.C. App. §91, 19 C.F.R.§ 4.60) or must have a permit to proceed from one United States port to another (46 U.S.C. App. 313, 19 C.F.R.§ 4.87).

You indicate that the BLUENOSE II is owned by the Canadian Government. The Customs Regulations exempt from the requirements relating to report or arrival and entry:

(a)ny vessel under the complete control and management of the United States or any of its agencies, if such vessel (1) is manned wholly by members of the uniformed services of the United States, by personnel in the civil service of the United States, or both , and (2) is transporting only property of the United States or passengers traveling on official business of the United States, or is in ballast. (See 19 C.F.R.§ 4.5(a); see 19 U.S.C. §1441 (a)).

The regulations further exempt vessels of any foreign nation operating under these same conditions (19 C.F.R §4.5(c)). Clearance is not required for vessels exempted from entry under 19 U.S.C. §1441. Upon the presentation of documents confirming that the BLUENOSE II is owned or under the complete management and control of the Canadian Government, the vessel will be exempt from U.S. entry and clearance requirements.

With regard to the matter of inviting U.S. corporate executives on board the vessel for a sail as a goodwill gesture for the purpose of promoting trade between the two countries, the transportation of such persons would be violative of title 46 U.S. C. App. 289.

The Act of June 19, 1886, as amended (24 Stat. 81; 46 U.S.C. App. § 289, sometimes called the coastwise passenger law), 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.

For your general information, 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 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. The law is strictly construed to include even movements within the same harbor (Headquarters Ruling Letter 111302, March 4, 1991). 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. The territorial waters of the United States consist of the territorial sea, defined as the belt, three 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 (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 as well.

Section 4.50(b), Customs Regulations (19 CFR 4.50(b)), defines the term "passenger" for purposes of enforcing the coastwise transportation statute. For the purposes of 46 U.S.C. App. 289 a passenger is:

...any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business.

The fact that there has been no payment of fees or compensation is not relevant for defining a passenger.

All of the foregoing factors taken together establish conclusively that the transportation of the subject persons would be a violation of the statute.

HOLDING:

The BLUENOSE II, a Canadian-flag vessel is exempt from the entry and clearance requirements provided it is owned or under the complete control and management of the Canadian government or any of its agencies, provided such vessel (1) is manned wholly by members of the uniformed services of the United States, by personnel in the civil service of Canada , or both , and (2) is transporting only property of Canada or passengers traveling on official business of the Canada.

The proposed use of the non-coastwise-qualified vessel in question for the purpose of transporting persons on a goodwill sail within the territorial waters of the United States would be in violation of 46 U.S.C. App.§ 289.

Sincerely,

Arthur P. Schifflin
Chief

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