VES-3-04 CO:R:P:C 109904 BEW
Mr. Roger W. Koteen
2015 Zapo Street
Del Mar, California 920141
RE: Use of a foreign-built vessel as a "bed and breakfast inn",
and for transportation of passengers for sight-seeing purposes
within the territorial waters of the United States.
Dear Mr. Koteen:
This is in reference to your letter of November 29, 1988, in
which you requested a ruling with regard to the application of
the Jones Act to the use of a foreign made vessel for overnight
accommodations and for sight-seeing cruises within the inland
waters of the harbor of San Diego, California.
FACTS:
You state that the vessel will be used for overnight
accommodations (such as "bed and breakfast inns"); that the
vessel will be located in the San Diego Bay; and that the vessel
will be used for a 2 to 3 hours sight-seeing cruise within the
inland waters of the harbor. You further state that a foreign
made vessel would be used for this venture.
ISSUE:
Whether the use of a foreign-built vessel for overnight bed
and breakfast accommodations which includes a sight-seeing tour
within the territorial waters of the United States is a violation
of the coastwise laws.
LAW ANALYSIS:
Generally, the coastwise laws (e.g., 46 U.S.C. App. 289 and
883, and 46 U.S.C. 12106 and 12110) prohibit the transportation
of merchandise or passengers between points in the United States
embraced within the coastwise laws in any vessel other than a
- 2 -
vessel built in and documented under the laws of the United
States, and owned by persons who are citizens of the United
States.
Under the provisions of 46 U.S.C. App. 289, no foreign
vessel shall transport passengers between ports or places in the
United States, either directly or by way of a foreign port. The
penalty for violating this section of the law is $200 for each
passenger so transported and landed.
In interpreting the coastwise laws as applied to the
transportation of passengers, we have ruled that the carriage of
passengers entirely within territorial waters, even though they
disembark at their point of embarkation and the vessel touches
no other point, is considered coastwise trade subject to the
coastwise laws. The transportation of passengers to the high seas
or foreign waters and back to the point of embarkation, often
called a "voyage to nowhere," is not considered coastwise trade,
assuming the passengers do not go ashore, even temporarily, at
another coastwise point. 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.
The vessel under consideration, as a foreign-built vessel,
would be precluded from engaging in the coastwise trade. Under
the circumstances stated above, you may not use the vessel in the
coastwise trade if, as is true in this case, it is not qualified
to engage in the coastwise trade. As noted above, 46 U.S.C.
App. 289, prohibits the transportation between points in the
United States of passengers in a non-coastwise-qualified vessel.
"Passenger," for purposes of this provision, is defined as
"...any person carried on a vessel who is not connected with the
operation of such vessel, her navigation, ownership, or business"
(19 CFR 4.50(b)). However, a foreign-built vessel not qualified
to engage in the coastwise trade which is permanently moored, can
be used as a bed and breakfast inn or other non-maritime use
without violating the statute. No law or regulation
administered by the United States Customs Service would preclude
the use of the subject vessel as a permanently moored lodging
facility since it would not be considered engaged in
transportation. The subject persons would however, be considered
passengers and their transportation on sight-seeing cruises
within the inland harbor or territorial waters of the United
States would be a violation of the coastwise laws.
- 3 -
HOLDING:
The use of a foreign-built vessel for overnight bed and
breakfast accommodations, if permanently moored, is not a
violation of the coastwise laws. The transportation of such
persons by a non-coastwise-qualified vessel, such as your
foreign-built vessel, for sight-seeing cruises within the San
Diego harbor is a violation of the coastwise laws.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch