Coastwise Transportation; 46 U.S.C. § 55103

HQ H077439 October 6, 2009 VES-3-02-OT:RR:BSTC:CCI H077439 JLB CATEGORY: Carriers Mr. David B. Marvel Prenner & Marvel, P.A. 90 Queen Street Charleston, South Carolina 29401 RE: Coastwise Transportation; 46 U.S.C. § 55103 Dear Mr. Marvel: This letter is in response to your correspondence dated September 24, 2009, in which you request a ruling on whether the proposed voyage constitutes a violation of 46 U.S.C. § 55103. Our ruling on your request follows. FACTS The voyage in question involves the transportation of passengers aboard the non-coastwise-qualified KAISEI (“the vessel”). The KAISEI is a 151 foot foreign-flagged vessel that is being chartered to Incredible Adventures, Inc., which will utilize the vessel for dive and sightseeing excursions to the Gulf of the Farallones National Marine Sanctuary where the passengers will dive with great white sharks. The vessel will embark the passengers in Sausalito, California, travel approximately twenty-five nautical miles towards the Farallon Islands, where it will stop for the dive excursion. This excursion will take place within sight of the Farallon Islands. The passengers will never set foot on the islands but the vessel will come within three miles of its shore. The vessel will then return to Sausalito. Alternatively, you suggest that the vessel could embark and disembark the passengers in San Francisco since the Farallon Islands are considered part of the city of San Francisco. ISSUE Whether the use of the non-coastwise-qualified vessel in the voyage described above constitutes an engagement in coastwise trade in violation of 46 U.S.C. § 55103? LAW AND ANALYSIS The coastwise passenger statute, former 46 U.S.C. App. § 289 recodified as 46 U.S.C. § 55103, pursuant to P.L. 109-304 (October 6, 2006), states that no foreign vessel shall transport passengers “between ports or places in the United States to which the coastwise laws apply, either directly or by way of a foreign port,” under a penalty of $300 for each passenger so transported and landed. See also 19 C.F.R. § 4.80(b)(2). 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. In its administration of 46 U.S.C. § 55103, U.S. Customs and Border Protection (“CBP”) 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 the 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. See 29 O.A.G. 318 (1912); see, e.g., Headquarters Ruling Letter H027231, dated May 2, 2008; Headquarters Ruling Letter H014892, dated August 17, 2007; Headquarters Ruling Letter 113846, dated May 5, 1997; Headquarters Ruling Letter 112171, dated May 20, 1992. In the facts you presented, a non-coastwise-qualified vessel will embark passengers in Sausalito, California, travel through international waters, and stop for a dive and sightseeing excursion at the Farallon Islands. While the passengers will never go ashore at the islands, the vessel will be in U.S. territorial waters while it is conducting the dive excursion. You assert that since the vessel does not travel between U.S. ports but merely travels through international waters, there is no coastwise trade and you cite several U.S. Customs and Border Protection (“CBP”) rulings as authority. See Headquarters Ruling Letter 109759, dated October 25, 1988; Headquarters Ruling Letter 112216, dated May 20, 1992. However, CBP specifically states that while a non-coastwise-qualified vessel could be used to transport passengers from a coastwise point to international waters and back to the same coastwise point without violating 46 U.S.C. § 55103, the vessel must not touch another coastwise point during the transportation. See Headquarters Ruling Letter 109759, dated October 25, 1988. In this instance, the vessel will be stopping to allow the passengers to dive with great white sharks within U.S. territorial waters surrounding the Farallon Islands. The location of the dive site constitutes a coastwise point even though the passengers never go ashore at the Farallon Islands. In Sea Princess Services, Inc. v. United States, 2002 AMC 172 (1996), it was held that a non-coastwise-qualified vessel operating “sports and leisure” cruises, which embarked passengers at a coastwise point, proceeded to the high seas, then returned to a location within the U.S. territorial sea where the vessel moored at a point within a harbor to allow the passengers the opportunity to temporarily leave the vessel to participate in water sports activities (i.e. jet skiing, power boating), and subsequently disembarked the passengers at their original U.S. point of embarkation was in violation of 46 U.S.C. § 55103. The court concluded that a coastwise transportation existed since the vessel transported passengers between two different coastwise points within the U.S. territorial waters, i.e., the point of embarkation/disembarkation and the point where the vessel temporarily moored to allow the passengers to engage in water sport activities. Additionally, the court concurred with CBP and expanded the phrase “goes ashore temporarily at a coastwise point” within the definition of a voyage-to-nowhere beyond its plain meaning to encompass situations where a passenger temporarily leaves the vessel at any coastwise point other than the point of embarkation. See Headquarters Ruling Letter 108776, dated March 20, 1987 (stating that a non-coastwise-qualified vessel engaging in a voyage-to-nowhere may moor or anchor within the territorial waters, but that the vessel would violate 46 U.S.C. § 55103 if it allowed its passengers to leave the vessel to swim, dive, snorkel or fish). In this instance, the passengers temporarily leave the vessel at a coastwise point other than the point of embarkation. Thus, a violation of 46 U.S.C. § 55103 results regardless of whether the passengers embark in Sausalito or San Francisco. HOLDING The use of the non-coastwise-qualified vessel in the voyage described above does constitute an engagement in coastwise trade in violation of 46 U.S.C. § 55103. Sincerely, Glen E. Vereb, Chief Cargo Security, Carriers and Immigration Branch