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HQ 113812

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January 10, 1997

VES-3-15-RR:IT:EC 113812 GEV

CATEGORY: CARRIER

Richard H. Hanner
3604 Biltmore Drive
Panama City, Florida 32408

RE: Coastwise Trade; Artificial Reef Building; Canadian-built Vessel;
46 U.S.C. App. ?? 289, 883

Dear Mr. Hanner:

This is in response to your letter dated January 7, 1997, regarding your proposed purchase of a Canadian-built vessel for use in artificial reef building. Our position in this matter is set forth below.

FACTS:

You are considering the purchase of a Canadian-built vessel for the purpose of artificial reef building. The reefs are poured concrete structures of approximately 8' x 8' at the base, pyramid shaped and approximately 8' high. You state that they will be deployed seaward of U.S. boundaries of three or twelve miles, whichever is necessary for a registry endorsement, if an endorsement is possible for a Canadian-built vessel.

The structures will be placed on a pristine bottom and not on any existing reefs or manmade structures. Most often they will be deployed one or two at a time in various locations of the Gulf Coast around the Panama City, Florida, area and within a 200 mile radius thereof.

Further in regard to your proposal, you would like to know if it would be possible to carry divers to the same deployed structures on the same vessel.

ISSUE:

Whether the use of a Canadian-built vessel in artificial reef building and the transportation of divers as described above constitutes a violation of 46 U.S.C. App. ?? 289 and/or 883.

LAW AND ANALYSIS:

The U.S. Customs Service enforces various navigation laws which deal with the use of vessels in what is recognized as the coastwise trade. Title 46, United States Code Appendix, 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. 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. and chattels of every 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,

The coastwise laws generally apply to points in the U.S. territorial sea, defined as the belt, three nautical miles wide, seaward of the U.S. territorial sea baseline, and to points located in internal waters, landward of the U.S. territorial sea baseline, in cases where the baseline and the coastline differ. (We note that although Presidential Proclamation 5928 of December 27, 1988, extended the U.S. territorial sea to 12 miles, this extension is only for international purposes. Thus, U.S. Customs and U.S. Coast Guard law enforcement activities are not altered as a result of the proclamation.)

In regard to the artificial reef building activities in question, the use of a Canadian-built vessel to transport the poured concrete structures described in your letter from the U.S. mainland to a location(s) beyond the three-mile U.S. territorial sea does not constitute coastwise trade in view of the fact that although these structures will be loaded at one or more coastwise points (the U.S. mainland), they will be unloaded at points not embraced within the coastwise laws (i.e., beyond the three-mile U.S. territorial sea). Accordingly, no violation of 46 U.S.C. App. ? 883 would be incurred by engaging in this activity.

With respect to the transportation of divers to the same deployed structures on the same vessel, we note that they would be considered "passengers" within the meaning of ? 4.50(b), Customs Regulations, discussed above. However, such transportation would be in compliance with 46 U.S.C. App. ? 289 provided the divers do not leave the vessel, even temporarily, at any coastwise point other than their point of original embarkation.

Parenthetically, we note that although a Canadian-built vessel is prohibited from obtaining a coastwise endorsement on a U.S. certificate of documentation, such a proscription does not exist with respect to a registry endorsement so long as the requisite citizenship requirements are met. In view of the fact that vessel documentation is a matter within the jurisdiction of the U.S. Coast Guard, we suggest that you contact that agency regarding your proposal. Should you obtain a registry endorsement for the vessel in question, you should know that no law administered by the U.S. Customs Service would preclude you from using the vessel as discussed in this letter.

HOLDING:

The use of a Canadian-built vessel in artificial reef building as described above (i.e., transporting poured concrete structures from coastwise points of loading to locations beyond the three-mile U.S. territorial sea where they are unloaded) does not constitute a violation of 46 U.S.C. App. ? 883. The transportation of divers to the same deployed structures on the same vessel does not constitute a violation of 46 U.S.C. App. ?? 289 provided they do not leave the vessel, even temporarily, at any coastwise point other than their point of original embarkation.

Sincerely,

Jerry Laderberg

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