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HQ 113935





May 9, 1997

VES-3/3-02-RR:IT:EC 113935 GOB

CATEGORY: CARRIER

Mimi Bornhorst
Marine Surveyors and Consultants, Ltd.
677 Ala Moana Blvd.
Suite 812
Honolulu, Hawaii 96813

RE: Coastwise transportation; 46 U.S.C. App. 289, 883; Passengers; Merchandise; Movie set

Dear Ms. Bornhorst:

FACTS:

This is in response to your letter dated May 1, 1997 in which you state:

The vessel KA'IMIKAI-O-KANOLA (hereinafter the vessel) is owned by the University of Hawaii, is normally used as a research vessel and is registered with the State of Hawaii under the research vessel designation.

The University has been approached by a motion picture company which would like to use the vessel for approximately four days as a movie set, and it is this operation that I solicit a ruling as to the required endorsements.

The intended operation is with the vessel being operated by a crew of approximately 13, with approximately 20 employees of the motion picture company aboard, the movie crew will include both production personnel and actors and actresses. All motion picture personnel as well as vessel crew will be paid employees.

The vessel will leave Pier 45 in Honolulu, Hawaii each day, motor to a location approximately five miles offshore of Oahu, conduct their operation and at the end of each day the vessel will return to Pier 45 in Honolulu Harbor.

At no time during the operation of the vessel for the subject project will the vessel dock at any pier other than Pier 45 or enter any port other than Honolulu Harbor.

Your office advised telephonically that the vessel was built in the United States and that at one time it was under Panamanian registry.

ISSUE:

The relationship between the proposed activity and the coastwise laws.

LAW AND ANALYSIS:

Generally, the coastwise laws prohibit the transportation of passengers or merchandise 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. A vessel that is built in, documented under the laws of, and owned by citizens of the United States, and which obtains a coastwise endorsement from the U.S. Coast Guard, is referred to as "coastwise qualified."

The coastwise laws generally apply to points in the territorial sea, which is 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.

46 U.S.C. App. 883, the coastwise merchandise statute 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 a vessel built in, documented under the laws of, and owned by citizens of the United States. The first proviso to 46 U.S.C. App. 883, as amended by Public Law 104-324, states:

Provided, That no vessel of more than 200 gross tons having at any time acquired the lawful right to engage in the coastwise trade, either by virtue of having been built in, or documented under the laws of the United States, and later sold foreign in whole or in part, or placed under foreign registry, shall hereafter acquire the right to engage in the coastwise trade...

The coastwise law applicable to the carriage of passengers is found in 46 U.S.C. App. 289 and 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.

Section 4.50(b), Customs Regulations (19 CFR 4.50(b)) states as follows:

A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business.

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, which include the internal waterways of the United States, 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. In such a situation, the vessel may not stop at a point in territorial waters other than the place where the passengers boarded the vessel.

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 the 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 (29 Opinions of the Attorney General 318). We have consistently followed this position as well.

You will have to consult with the U.S. Coast Guard as to whether the vessel is eligible for a coastwise endorsement. See the first proviso to 46 U.S.C. App. 883, above. You may contact the U.S. Coast Guard at:

National Vessel Documentation Center
2039 Stonewall Jackson Drive
Fallingwater, West Virginia 25419
1-800-799-8362.

Customs has held that members of a movie cast and movie technicians are "passengers" within the meaning of 46 U.S.C. App. 289 and 19 CFR 4.50(b). Crewmembers are not passengers. If the vessel is not eligible for and does not obtain a coastwise endorsement, it would appear from the facts presented that the vessel may engage in a "voyage to nowhere," as described above, with respect to 46 U.S.C. App. 289 and the transportation of the passengers, i.e., the members of the cast and the technicians. The facts which you present state that the vessel will go to the high seas and will return to the point of embarkation.

It would appear from the facts presented that the vessel will be carrying such articles as movie equipment, cameras, etc. These articles are "merchandise," which is defined in 19 U.S.C. 1401(c) as "...goods, wares, and chattels of every description..." If the vessel is not eligible for and does not obtain a coastwise endorsement, pursuant to 46 U.S.C. App. 883, this merchandise may not be transported between U.S. points on the vessel. However, this merchandise may be carried by the vessel if it is laden on the vessel and unladen from the vessel at the same point.

HOLDING:

If the vessel is not eligible for and does not receive a coastwise endorsement, it may not transport passengers or merchandise between two U.S. points. The vessel may engage in a "voyage to nowhere." Further, the vessel may transport merchandise ( i.e., movie equipment, cameras, etc.) if the merchandise is laden on the vessel and unladen from the vessel at the same point.

Sincerely,

Jerry Laderberg
Acting Chief,

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