VES-3-06-RR:IT:EC 114492 GEV
Allen von Spiegelfeld, Esq.
Fowler, White, Gillen, Boggs,
Villareal & Banker, P.A.
Post Office Box 1438
Tampa, Florida 33601
RE: Coastwise Trade; Foreign-flag vessel; Floating hotel;
Casino;
46 U.S.C. App. 289, 883
Dear Mr. von Spiegelfeld:
This is in response to your letter of September 15, 1998,
requesting our opinion regarding an activity that has been
proposed by a client of yours involving the use of a foreign-flag
passenger vessel to be anchored offshore as a floating
hotel/casino. Our opinion is set forth below.
FACTS:
Your client wishes to purchase a foreign-flag cruise ship
and sail it to a position between nine and 20 miles off the St.
Petersburg/Clearwater/Tarpon Springs beaches. Although this
vessel would be capable of moving, it is planned that it would
only move on rare occasions and then only short distances. The
primary purpose of the vessel would be to act as a floating
hotel/casino off the coast of Florida. The visitors to the
hotel/casino would be brought to the vessel on U.S.-flag vessels
from various load positions in Pinellas and Pasco Counties. Each
person taken out to the hotel/casino would have a pass which
would indicate the port from which they departed, and they would
only be permitted to return to the same port.
ISSUE:
Whether the use of a foreign-flag cruise vessel as a
floating hotel/casino as described above is violative of any
statute administered by the U.S. Customs Service.
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LAW AND ANALYSIS:
Title 46, United States Code Appendix, 883 (46 U.S.C. App.
883, the coastwise merchandise statute often called the "Jones
Act"), provides in part, that no merchandise shall be transported
between points in the United States embraced within the coastwise
laws, either directly or via a foreign port, or for any part of
the transportation, in any vessel other than a vessel built in
and documented under the laws of the United States and owned by
persons who are citizens of the United States (i.e., a coastwise-qualified vessel).
Title 46, United States Code Appendix, 289 (46 U.S.C. App.
289, the passenger coastwise law), prohibits the transportation
of passengers between points embraced within the coastwise laws
of the United States, either directly or by way of a foreign
port, in a non-coastwise-qualified vessel (i.e., any vessel not
built in and documented under the laws of the United States and
owned by persons who are citizens of the United States).
Points embraced within the coastwise laws include all points
within the territorial waters of the United States, including
points within a harbor. The territorial waters of the United
States consist of the territorial sea, 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 cases where the baseline and coastline differ.
Furthermore, 4(a) of the Outer Continental Shelf Lands Act
of 1953, as amended (67 Stat. 462; 43 U.S.C. 1333(a)) (OCSLA),
provides, in part, that the laws of the United States are
extended to:
... the subsoil and seabed of the outer Continental
Shelf and to all
artificial islands, and all installations and other
devices permanently
or temporarily attached to the seabed, which may be
erected thereon
for the purpose of exploring for, developing, or
producing resources
therefrom ... to the same extent as if the outer
Continental Shelf were
an area of exclusive Federal jurisdiction within a
State.
With regard to your client's proposal, it should be noted
that the use of a foreign-flag vessel as a floating hotel within
U.S. territorial waters has long been held by Customs not to
violate 46 U.S.C. App. 289 and/or 883 provided the vessel
remains stationary during such use. (See Headquarters ruling
letter 108359, dated May 21, 1986) The use of the subject vessel
as described above would yield the same result in view of the
fact that it would be operated at a location not embraced within
the coastwise laws (i.e., between nine and 20 miles off the
Florida coast). The fact that it may occasionally move short
distances is of no consequence as long as such movement does not
constitute the transportation of passengers or merchandise
between coastwise points.
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Furthermore, since the subject vessel itself would not be
considered a coastwise point as provided for in the OCSLA, those
individuals transported to it from the mainland and back to their
point of embarkation need not be ferried by a coastwise-qualified
vessel.
Notwithstanding the absence of any violations of the
coastwise laws with regard to the use of the above-described
vessels in your client's proposal, you should also know that
those vessels transporting passengers to and from the floating
hotel/casino will have to report their arrival with Customs, make
formal entry, and obtain clearance pursuant to 19 U.S.C. 1433,
1434, and 46 U.S.C. App. 91, respectively. The same
requirements would apply to the foreign-flag cruise vessel in the
event it calls at a U.S. port.
In addition, since your proposal involves the operation of a
casino, you should also know that monetary instruments brought
into the U.S. totaling in excess of $10,000 are subject to the
reporting requirements of 31 U.S.C. 5316. Pursuant to 31 CFR
Part 103, Subpart F, the issuance of administrative rulings
regarding 5316 Reports is a matter within the purview of the
Office of Financial Crimes Enforcement Network ("FIN CEN") at the
Department of Treasury. Should you wish to seek such a ruling
regarding your client's proposal, your request should be directed
to that office at the following address:
Director
FIN CEN
U.S. Department of Treasury
1500 Pennsylvania Avenue, N.W.
Treasury Annex, Rm. 3190
Washington, D.C. 20220
HOLDING:
As discussed in the Law and Analysis portion of this ruling,
the use of a foreign-flag cruise vessel as a hotel/casino as
described above is not violative of any statute administered by
the U.S. Customs Service.
Sincerely,
Jerry Laderberg
Chief
Entry Procedures and Carriers
Branch