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HQ 116618

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May 1, 2006

CATEGORY: CARRIER

VES-3-02-RR:BSTC:CCI 116618 CK

Steve Nielsen
Vice President
Caribbean and Atlantic Shore Operations
Princess Cruises
P.O. Box 165201
Ft. Lauderdale, FL 33316-5201

RE: Cruise Itinerary; 46 U.S.C. App. §289

Dear Mr. Nielsen:

This is in response to your ruling request dated February 6, 2006, on behalf of Princess Cruises. Our reply follows.

FACTS:

Two ships are the subject of this ruling request. The QUEEN MARY 2, owned and operated by Carnival plc trading as Cunard Line, was built in Finland, is registered in the United Kingdom and flies the British flag. The CROWN PRINCESS, owned by Princess Cruise Lines, Ltd., is currently under construction in Italy, will be registerd in Bermuda and will fly the Bermudan flag. Below is the itinerary of the CROWN PRINCESS for September 2006.

Day 1
Embark passengers and depart Brooklyn Passenger Terminal, port of New York/New Jersey. Day 2
At Sea
Day 3
Bermuda
Day 4
At Sea
Day 5
San Juan, Puerto Rico
Day 6
St. Thomas, U.S.V.I.
Day 7
Grand Turk
Day 8
At Sea
Day 9
At Sea
Day 10
Return to New York City Passenger Terminal, port of New York/New Jersey and disembark passengers.

The second itinerary for the CROWN PRINCESS is the same as above except passengers will embark at the New York City Passenger Terminal at the port of New York/New Jersey and will disembark passengers at the Brooklyn Passener Terminal, port of New York/New Jersey.

The problem presented is that both Cunard’s QUEEN MARY 2 and the CROWN PRINCESS are both scheduled to berth at the Brooklyn Passenger Terminal in the port of New York/New Jersey on September 30, 2006. The Brooklyn Passenger Terminal cannot berth both vessels simultaneously as there is only one pier that can accommodate such large vessels.

Thus, as seen in the above-proposed itinerary, the CROWN PRINCESS will utilize two different terminals in embarking and disembarking passengers: one terminal is in Brooklyn and one is in Manhattan.

Pursuant to your request, a telephone conference to discuss this issue was held on April 30, 2006. The following officials were in attendance at this conference: CBP Officials Glen Vereb and Christina Kopitopoulos and Princess Cruise Officials Steve Nielsen and Elsa Ward.

ISSUE:

Whether the above-described cruise itinerary for a non-coastwise vessel is violative of 46 U.S.C. App. §289.

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.

The coastwise law applicable to the carriage of passengers is found in 46 U.S.C. App. §289 (sometimes called the “Passenger Vessel Services Act” and the “coastwise passenger statute”) 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 $300 for each passenger so transported and landed. (Emphasis added)

The applicable Customs Regulations promulgated pursuant to 46 U.S.C. App. §289 are set forth in §§ 4.80 and 4.80a, Customs Regulations (19 CFR §§ 4.80 and §4.80a).

A coastwise transportation occurs when a passenger “embarks” a vessel at one coastwise point and “disembarks” at another coastwise point. (See 19 CFR 4.80a(a)(4) for the definitions of those terms) The coastwise laws encompass any point in the territorial waters of the United States, defined as the belt, 3 nautical miles wide, adjacent to the coast of the United States, and seaward of the territorial sea baseline, as well as any point located in internal (navigable) waters, landward of the territorial sea baseline, in cases where the baseline and the coastline differ (see, e.g., T.D. 78-440 and Headquarters ruling (HQ) 111275, of November 13, 1990). As such, the coastwise laws would, for example, embrace “points on a river in the United States” (C.S.D. 84-15), “the internal waters of a State” (ibid.), as well as “points within a harbor” (19 CFR 4.80(a)).

In regard to your proposal, it is readily apparent that two terminals within one port are two distinct points or “places” within the aforementioned regulatory and statutory authority. As these two terminals are two separate coastwise points then the embarking at one terminal in Brooklyn and disembarking at another in Manhatten would constitute a violative coastwise movement pursuant to 46 U.S.C. App. §289 and 19 CFR 4.80(a).

HOLDING:

The use of a non-coastwise-qualified vessel for the transportation of passengers in the above-described itinerary is violative of 46 U.S.C. App. §289.

Sincerely,

Glen E. Vereb

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