VES-3-19-CO:R:P:C 111021 JBW
Mr. Bob Horanzy, President
Cape Fear Inner City Outings, Inc.
166 Mallard Bay Drive
Hampstead, N.C. 28443
RE: Coastwise; Passengers; Sailing School; D'SONOQUA; 46 U.S.C.
App. 289.
Dear Mr. Horanzy:
This letter is in response to your inquiry of May 4,
1990, in which you request a ruling regarding the use of a
foreign-built sailing vessel in United States territorial waters.
FACTS:
In your letter, you state that you intend to use a
foreign-registered schooner to offer sailing instruction to
disabled and disadvantaged youth participating in programs
sponsored by Cape Fear Inner City Outings. Specifically, the
vessel is a fifty foot gaff rigged schooner that was built in
Canada and is currently registered in Canada.
ISSUE:
Whether the use of a foreign-built vessel for sailing
instruction would be in violation of the coastwise passenger law,
46 U.S.C. App. 289.
LAW AND ANALYSIS:
The coastwise laws generally prohibit the
transportation of passengers or merchandise between points in the
United States embraced within the coastwise laws in any vessel
other than a United States built, owned, and documented vessel.
46 U.S.C. App. 289 (Supp. III 1985) & 46 U.S.C.A. 883 (West
Supp. 1990). Points in the United States embraced within the
coastwise laws include the United States territorial waters. The
territorial waters of the United States consist of a belt, three
nautical miles wide, adjacent to the coast of the United States
and seaward of the territorial sea baseline.
The Customs Regulations define "passenger" for
purposes of section 289 as "any person carried on a vessel who is
not connected with the operation of such vessel, her navigation,
ownership, or business." See 19 CFR 4.50(b)(1989). The Customs
Service has held that a person being trained or receiving
instruction in the handling or navigation of a vessel, and whose
presence on board the vessel is required in order to receive such
training or instruction, is not a "passenger" within the
coastwise laws. Accordingly, if the vessel is used only for
such training, then it would not be required to have a license to
engage in the coastwise trade. See Headquarters Ruling Letter
109850, dated December 27, 1988, and Headquarters Ruling Letter
109287, dated February 24, 1988.
Therefore, the sole use of a foreign sailing vessel in
connection with a bona fide instructional course in sailing and
navigation with class or other instruction, as opposed to an
outing, does not constitute coastwise trade within the meaning of
46 U.S.C. App. 289. However, all persons being carried in the
vessel must be involved with the operation, navigation, or
business of the vessel. Persons who are carried on board a
vessel for recreational purposes and who pay a fee for such
carriage would be considered "passengers," and their carriage
between places in the United States or entirely within United
States waters would be in violation of the coastwise laws.
HOLDING:
The sole use of a foreign sailing vessel in connection
with a bona fide instructional course in sailing and navigation
with appropriate instruction and training is not coastwise trade
in violation of 46 U.S.C. App. 289.
This letter addresses only those federal requirements
that are administered by the United States Customs Service.
While we are unaware of any federal or state agency requirements
that might pertain to the undertaking you describe, it is
possible that such requirements exist.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch