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HQ 114031

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July 21, 1997

VES-3-02-RR:IT:EC 114031 GEV

CATEGORY: CARRIER

Gary M. Haugen, Esq.
Bauer, Moynihan & Johnson
2101 Fourth Avenue - 24th Floor
Seattle, Washington 98121-2320

RE: Coastwise Trade; Sightseeing; Voyage-to-Nowhere; SUPER MEXICO;
46 U.S.C. App. ? 289

Dear Mr. Haugen:

This is in response to your letter of July 16, 1997, on behalf of your client, Lakeside Tours, Inc. ("Lakeside"), requesting a ruling that Lakeside's proposed use of a non-coastwise-qualified vessel to carry passengers constitutes a "voyage-to-nowhere" and not an engagement in the coastwise trade. You state that Lakeside has made an offer to purchase the subject vessel contingent on receiving an acceptable ruling from Customs. This contingency must be removed by August 15, 1997. You therefore ask that this matter be handled on an expedited basis.

FACTS:

Lakeside is an Alaska corporation which intends to purchase the surface effect catamaran SUPER MEXICO (the "Vessel") for use in carrying passengers on day excursions which will depart from and return to Seward, Alaska. The Vessel was built outside of the United States and is reportedly documented under the laws of Norway as of the date of your letter. The Vessel will be redocumented under the laws of the United States before it begins the operations described below.

The Vessel will engage in transporting passengers on day voyages through Resurrection Bay to and from the high seas. Each voyage will be approximately 100 miles in length and approximately five hours in duration, with passengers embarking and disembarking at Seward, Alaska. No passenger will disembark the Vessel at any point during the voyage. The Vessel will transport the passengers for sightseeing and marine observation purposes, with no fishing activities to occur during any part of the voyage.

ISSUE:

Whether the operation of the Vessel as described above constitutes a valid "voyage-to-nowhere" thereby obviating the applicability of 46 U.S.C. App. ? 289.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, ? 289 (46 U.S.C. App. Service, 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., any vessel that is not built in and documented under the laws of the United States, and owned by persons who are citizens of the United States). For purposes of vessel who is not connected with the operation of such vessel, her navigation, ownership, or business." (19 CFR ? 4.50(b)) Section 4.80a, Customs Regulations (19 CFR ? 4.80a) is interpretive of ? 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 (29 O.A.G. 318 (1912)). 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 passengers' embarkation, is considered coastwise trade (T.D. 55193(2)).

In interpreting the coastwise laws, Customs has ruled that a point in United States territorial waters is a point in the United States embraced within the coastwise laws. The territorial waters of the United States consist of the territorial sea, defined as the belt, 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.

In regard to the proposed operation of the SUPER MEXICO, the transportation of passengers on sightseeing/marine observation excursions from the vessel's berth in Seward, Alaska, to the high seas and returning to the same point without stopping at any other coastwise point would constitute a valid "voyage-to-nowhere". Accordingly, the aforementioned excursions would not be in violation of 46 U.S.C. App. ? 289.

HOLDING:

The operation of the Vessel as described above constitutes a valid "voyage-to-nowhere" thereby obviating the applicability of 46 U.S.C. App. ? 289.

Sincerely,

Jerry Laderberg

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