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HQ 115090

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July 14, 2000

VES-3-06-RR:IT:EC 115090 GEV

CATEGORY: CARRIER

Nick Spink
644 Hawthorne Circle
Highland Village, TX 75077

RE: Coastwise Trade; Passengers; Floating Restaurant; U.S. Virgin Islands; 46 U.S.C. App. § 289

Dear Mr. Spink:

This is in response to your letter dated June 27, 2000, requesting a ruling concerning the use of foreign-built vessel. Our ruling on this matter is set forth below.

FACTS:

You would like to operate a 188’, German-built vessel as a restaurant and charter vessel. While in use as a restaurant the vessel will be moored in Virginia and will not be moving with customers on it. In addition to operating this vessel as a restaurant, during the winter months you are planning on chartering it in the U.S. Virgin Islands.

ISSUE:

Whether the use of a foreign-built vessel as described above is violative of 46 U.S.C. App. § 289.

LAW AND ANALYSIS:

The Act of June 19, 1886, as amended (24 Stat. 81; 46 U.S.C. App. § 289, 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.

Customs has consistently interpreted the above prohibitions to apply to all vessels except U.S.-built, owned, and properly documented vessels (i.e., coastwise-qualified vessels; see 46 U.S.C. § 12106, 12110; 46 U.S.C. App. § 883; 19 CFR § 4.80). Furthermore, for purposes of 46 U.S.C. App. § 289, a “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 19 CFR § 4.50(b))

The coastwise laws generally apply to points in the territorial sea, 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, in cases where the baseline and the coastline differ.

With respect to the use of a non-coastwise-qualified vessel as a floating restaurant, it is the position of the Customs Service that such use is not violative of 46 U.S.C. App. § 289 provided the vessel remains stationary by mooring during the course of such use. (Customs ruling letters 110588, dated March 15, 1990, and 112174, dated August 3, 1992) Consequently, the proposed use of the subject German-built vessel as a floating restaurant would not result in a violation of 46 U.S.C. App. §289.

In regard to the proposed chartering of the subject vessel in the U.S. Virgin Islands, you should know that title 46, United States Code Appendix, § 877 (46 U.S.C. App. § 877) provides that “the coastwise laws of the United States shall not extend to the Virgin Islands of the United States until the President of the United States shall, by proclamation, declare that such coastwise laws shall extend to the Virgin Islands and fix a date for the going into effect of same.” Because no such proclamation has been issued by the President, non-coastwise-qualified vessels (i.e., 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), such as the German-built vessel in question, are not prohibited from engaging in the coastwise trade in the U.S. Virgin Islands and the waters thereof.

In addition, you should know that the U.S. Virgin Islands has its own Customs laws (see § 101.1, Customs Regulations (19 CFR § 101.1)). You may wish to check with the appropriate authorities in the U.S. Virgin Islands for any other questions you may have pertaining to this matter.

HOLDING:

The use of a foreign-built vessel as described above is not violative of 46 U.S.C. App. § 289.

Sincerely,

Acting Chief

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