VES-3-02/14 CO:R:P:C 109815 LLB
Dr. Steven D. Audette
President, Lake Quest, Inc.
438 North 57th Avenue West
Duluth, Minnesota 55807
RE: Applicability of the coastwise laws to the use of a non-
coastwise-qualified submersible vessel in Lake Superior
for dual use in research/exploration and passenger touring
Dear Dr. Audette:
Reference is made to your letter of October 12, 1988, in
which you request a ruling on the proposed use of a submersible
vessel for passenger tours and research activities on Lake
Superior.
FACTS:
A Canadian concern currently owns a three-man, U.S.-built
submersible vessel known as the SEA OTTER. It is proposed that
a U.S. Corporation operate the vessel out of Duluth, Minnesota,
in the dual role of research/exploration vessel to be made
available to scientists, and submarine excursion vessel for
tourists.
ISSUE:
Whether a non-coastwise-qualified vessel may engage in
research and/or passenger for hire operations in Lake Superior
while operating out of a U.S. port.
LAW AND ANALYSIS:
Generally, the coastwise laws prohibit the transportation
of merchandise or passengers 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. The passenger coastwise law,
46 U.S.C. App. 289, provides that:
No foreign vessel shall transport
passengers between ports or places in the
United States either directly or by way of
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a foreign port, under penalty of $200 for
each passenger so transported and landed.
Pursuant to 46 U.S.C. 12106 and 12110 and their
predecessors (46 U.S.C. 65i and 65m and, before them, 46 U.S.C.
11) and consistent with 46 U.S.C. 883, the coastwise
merchandise law, the Customs Service has consistently held that
the prohibition in 46 U.S.C. 289 applies to all non-coastwise-
qualified vessels. Non-coastwise-qualified vessels include any
vessel other than a vessel built in, properly documented under
the laws of, owned by citizens of the United States, and never
sold foreign with certain exceptions (46 U.S.C. 12106(a)(2)(B)
and 19 CFR 4.80(a)(2) and (3)).
In its interpretation of section 289, the Customs Service
has ruled that the carriage 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 subject to the
coastwise laws. Transportation of passengers from a point in
the United States to the high seas or foreign waters and back
to the point of original embarkation, often called a "voyage to
nowhere," is not considered coastwise trade. In this case,
however, a "voyage to nowhere" would entail a round-trip of
approximately 300 miles. For purposes of the coastwise laws, a
vessel "passenger" is defined as "...any person carried on a
vessel who is not connected with the operation of such vessel,
her navigation, ownership, or business." (Section 4.50(b),
Customs Regulations.)
The Customs Service has long held that the use of a vessel
solely to engage in research is not a use in the coastwise
trade. Accordingly, the use of non-coastwise-qualified vessels
to engage in research, including the transportation of persons
participating in the research from, to, and between research
sites in United States territorial waters, whether or not the
persons participating in the research temporarily leave the
vessel at the research sites, and back, would not violate the
coastwise laws. However, if the foregoing activities include
the transportation between coastwise points of any persons
other than the vessel crew and scientists and students engaged
in the research or of any merchandise other than the usual
supplies and equipment necessary for that research, the
coastwise laws would be violated.
HOLDING:
A non-coastwise-qualified vessel may not transport
passengers on a voyage wholly within U.S. waters, even though
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the passengers embark and disembark at the same coastwise
point. Such a vessel may, however, engage in bona fide
research activities as outlined above without violating the
coastwise laws.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch