Coastwise Trade; Saipan; Tinian; CNMI; 46 U.S.C. App. 289, 883; 48 U.S.C. 1681

HQ 111146 August 29, 1990 VES-3-CO:R:P:C 111146 GEV CATEGORY: Carriers Mr. H. Yamada Manager, Machinery Division A Mitsubishi International Corporation 50 California Street San Francisco, California 94111-4774 RE: Coastwise Trade; Saipan; Tinian; CNMI; 46 U.S.C. App. 289, 883; 48 U.S.C. 1681 Dear Mr. Yamada: This is in response to your letter dated June 25, 1990, regarding the use of ferry boats between Saipan and Tinian in the Commonwealth of the Northern Mariana Islands. FACTS: Mitsubishi International Corporation ("Mitsubishi") is considering a business venture in which it would be supplying ferry boats for passenger service between Saipan and Tinian in the Commonwealth of the Northern Mariana Islands (CNMI). The vessels, which are U.S.-built, would be foreign-owned during the time they were engaged in the proposed service. In addition to providing a general description of the vessels, Mitsubishi poses the following questions: 1. What documentation is required to build, own and operate a boat such as the one described? 2. How is the necessary documentation acquired? 3. Is it necessary to have American crew, flag, and registration, to operate in Saipan/Tinian? ISSUE: Whether the operation of a U.S.-built, foreign-owned ferry in passenger service between Saipan and Tinian in the CNMI is prohibited by 46 U.S.C. App. 289. - 2 - LAW AND ANALYSIS: Title 46, United States Code Appendix, section 289 (46 U.S.C. App. 289, the passenger coastwise law), prohibits the transportation of passengers between points embraced within the coastwise laws of the United States, either directly or by way of a foreign port, in 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 (i.e., a coastwise- qualified vessel). Pursuant of section 4.50(b), Customs Regulations (19 CFR 4.50(b)) a "passenger" for purposes of section 289 is defined as "any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership or business." Points embraced within the coastwise laws include all points within the territorial waters of the United States, including points within a harbor. The territorial waters of the United States consist of the territorial sea, defined as the belt, 3 nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline. Sections 502(b) and 503(b) of the "Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States of America" provide in part that except for activities of the U.S. Government and its contractors in the CNMI, the coastwise laws of the United States do not apply to the CNMI (which include Saipan and Tinian). Accordingly, the use of the subject vessel in passenger service between Saipan and Tinian would not violate 46 U.S.C. App. 289. Consequently, it is not necessary for the vessel to be U.S.-flagged and crewed to operate in Saipan/Tinian. It is noted, however, that the documentation of vessels under the laws of the United States is within the jurisdiction of the U.S. Coast Guard. Should you have further questions in that regard, we suggest you contact that agency. - 3 - HOLDING: The operation of a U.S.-built, foreign-owned ferry in passenger service between Saipan and Tinian in the CNMI is not prohibited by 46 U.S.C. App. 289. Sincerely, B. James Fritz Chief Carrier Rulings Branch