Coastwise Transportation of Passengers; 46 U.S.C. § 55103; 19 C.F.R. §§ 4.50(b) and 4.80a.

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H304709 May 7, 2020 VES-3-02-OT:RR:BSTC:CCR HQ H304709 AMW CATEGORY: Carriers Mr. Gary Olivi 15 N. Indian River Drive, 902 Cocoa, Florida 32922 RE: Coastwise Transportation of Passengers; 46 U.S.C. § 55103; 19 C.F.R. §§ 4.50(b) and 4.80a. Dear Mr. Olivi: This letter is in response to your July 1, 2019 ruling request and subsequent follow-up information provided to this office in which you inquire as to whether the operation of the non-coastwise-qualified vessel, the M/Y WHTE ROSE (the “vessel”), in United States territorial water would constitute a violation of 46 U.S.C. § 55103. Our ruling is set forth below. FACTS The subject vessel is a 42-foot motor trawler built in Taiwan that has a recreation endorsement. You propose to use the vessel to conduct training for new and prospective trawler and motor yacht owners on all aspects of motor yacht operations and maintenance. The trainings will consist of one, two, and four or five day curriculums comprising of, but not limited to, voyage planning, Very High Frequency (“VHF”) radio use, line plans and handling, ship handling, docking, mooring, engine checks, anchoring procedures, safe shore power operations, chart plotting and navigation, bridge operations, launching and recovering dinghies, electrical power management, emergency procedures, and tide and current tables. You state that all trainings will begin and end at Manatee Cove Marina at Patrick Air Force Base in Satellite Beach, Florida. The one-day sessions will not involve stops at any other coastwise point. During the two-day sessions, the vessel will anchor overnight at a local spoils island anchorage such as “Marker 21” or “Bird Island.” During the four or five-day sessions, the vessel will conduct an overnight stay in Stuart, Florida, or Fort Pierce, Florida. All training will occur within the three-mile territorial sea, specifically within inland waterways. ISSUE Whether transportation of individuals as described in the FACTS section would constitute a violation of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). 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. The coastwise law applicable to the carriage of passengers is found at 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. Section 4.50 (b) of the Customs and Border Protection (“CBP”) Regulations provide: A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of the vessel, her navigation, ownership, or business. Section 4.80(b)(2) of the CBP Regulations further provide: The penalty imposed for the unlawful transportation of passengers between coastwise points is $300 for each passenger so transported and landed on or before November 2, 2015, and $798 for each passenger so transported and landed after November 2, 2015 (46 U.S.C. § 55103, as adjusted by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015). In the present case, you state that the non-coastwise-qualified vessel will transport passengers within the territorial sea. CBP has ruled that the transportation 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 for the purposes of the PVSA. See, e.g., HQ 109759 (Oct. 25, 1988). However, CBP has consistently held that “a person transported on a vessel as a student in bona fide instructional courses in oceanography or sailing and navigation/seamanship, when the presence of that person is required onboard the vessel as a part of his or her course of training, is not a passenger for purposes of the coastwise laws.” HQ H266819 (Aug. 4, 2015) (emphasis added); see also, e.g., HQ H261304 (May 21, 2015), HQ 115066 (June 9, 2000). You assert that the individuals will be transported onboard the vessel for the purpose of learning sailing, navigation, and seamanship skills. In support of this claim, you have provided an “outline” of a proposed training curriculum as well as a general description of what training you will conduct onboard the vessel. You have declined, however, to provide detailed pricing plans, full training curricula, or any other information regarding the proposed training. Significantly, the vessel’s certificate of endorsement provides that the vessel only has a recreation endorsement. The underlying Coast Guard regulations, available at 46 CFR § 67.23, specifies that a “recreational endorsement entitles a vessel to pleasure use only.” As such, based on the lack of a complete training curriculum or other supporting information, as well as the vessel’s status as a recreational vessel, we find that the proposed operation does not constitute a bona fide sailing school. As a result, the proposed transportation of passengers aboard onboard the vessel would be in violation of 46 U.S.C. § 55103. HOLDING The proposed transportation of individuals outlined above does not constitute a bona fide instructional course in oceanography or sailing and navigation/seamanship. As such, the proposed transaction would constitute a violation of 46 U.S.C. § 55103. Sincerely, Lisa L. Burley Chief/Supervisory Attorney-Advisor Cargo Security, Carriers and Restricted Merchandise Branch Office of Trade, Regulations and Rulings