Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.80.

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H248787 January 16, 2014 VES-3-02-OT:RR:BSTC:CCR H248787 KLQ CATEGORY: Carriers Mr. Christopher J. Kane Adams and Reese, LLP One Shell Square 701 Poydras Street, Suite 4500 New Orleans, Louisiana 70139 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.80. Dear Mr. Kane: This letter is in response to your December 5, 2013, ruling request regarding the operation of certain ferries pursuant to a bareboat charter agreement. Our decision follows. FACTS Veolia Transportation Services (“Veolia”) is a subsidiary of Veolia Transportation, Inc., which is a wholly owned subsidiary of a French corporation headquartered in Paris, France. The New Orleans Regional Transit Authority proposes to bareboat charter six ferries and seven barges to Veolia Transportation Services, Inc. The ferries are coastwise endorsed. The ferries will transport passengers across the Mississippi River, connecting New Orleans’ East and West Banks. ISSUE Whether Veolia’s operation of the subject ferries would be in violation of 46 U.S.C. § 55103. 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. Such a vessel, after it has obtained a coastwise endorsement from the U.S. Coast Guard, is said to be “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. See 33 C.F.R. § 2.22(a)(2)(2013). The coastwise law applicable to the transportation of passengers is found in 46 U.S.C. § 55103 which provides: (a) In General. Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not transport passengers between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel- (1) is wholly owned by citizens of the United States for purposes of engaging in coastwise trade; and (2) has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement. (b) Penalty. The penalty for violating subsection (a) is $300 for each passenger transported and landed. The proposed transportation of passengers between New Orleans’ West and East Banks qualifies as coastwise trade. In order to engage in coastwise trade without incurring a penalty, vessels must have a coastwise endorsement. See H024222 (March 19, 2008). Here the subject vessels have been issued certificates of documentation with coastwise endorsements by the United States Coast Guard. The subject vessels are owned by the State of Louisiana. To the extent of whether the bareboat charter agreement alters the vessels’ status for purposes of obtaining a coastwise endorsement is an issue under the purview of the Coast Guard. To the extent of whether the operation of the vessels will impact the coastwise laws is an issue for Customs and Border Protection. In this instance, the vessels are owned by a U.S. citizen, the State of Louisiana, and are coastwise endorsed. It is for the Coast Guard to decide if the subject bareboat agreement alters the citizenship status of the subject ferries, thus impacting the vessel’s eligibility for a coastwise endorsement. HOLDING The subject ferries have been issued certificates of documentation with coastwise endorsements by the United States Coast Guard. Therefore, Veolia’s operation of the subject ferries would not be in violation of 46 U.S.C. § 55103. Sincerely, Lisa L. Burley Chief, Supervisory Attorney-Advisor Cargo Security, Carriers and Restricted Merchandise Branch Office of International Trade, Regulations and Rulings U.S. Customs and Border Protection