VES-3-CO:R:IT:C 113158 GEV
R.J. Morris
Commander, U.S. Coast Guard
Chief, Merchant Vessel Safety Branch
1240 E. Ninth Street
Cleveland, Ohio 44199-2060
RE: Coastwise Trade; Great Lakes; Cruise Vessel; Zodiacs;
46 U.S.C. 12107; 46 U.S.C. App. 289
Dear Commander Morris:
This is in response to your letter dated June 24, 1994,
requesting our opinion concerning the use of foreign-owned vessels
engaged in transporting passengers on the Great Lakes. Enclosure
1 of your letter contained various advertisements and cruise
information regarding the vessels in question. Our ruling on this
matter is set forth below.
FACTS:
The U.S. Coast Guard (USCG) has received plans for review of
a Russian-flagged cruise ship, the M/V AKADEMIK SHULEYKIN, for the
purposes of inspecting the vessel for the transportation of
passengers on the Great Lakes. The vessel's agent has also visited
two USCG Marine Safety Offices in United States ports on the Great
Lakes where the vessels plan to either visit or embark or disembark
passengers. Included in the cruise itineraries are side excursions
in United States waters of the Great Lakes for the passengers from
the cruise ship in foreign-built and owned inflatable zodiacs. The
cruises are scheduled to commence on August 1, 1994 and run through
September of 1994. The vessel's agent has stated that three
Russian-flagged cruise ships are contemplated for such use
including the aforementioned M/V AKADEMIK SHULEYKIN, the M/V
AKADEMIK IOFFE, and an as yet unidentified vessel.
The cruise schedule indicates that the vessels will be
transiting between Toronto, Ontario, Canada and Duluth, Minnesota.
Passengers who embark in Toronto will disembark in Duluth. The
vessels will then embark new passengers in Duluth and return to
Toronto. The vessels plan various port visits in the United States
during the transit including: Niagara Falls, - 2 -
New York; Midland, Michigan; Sault. Ste. Marie, Michigan; and
Marquette, Michigan. At these ports passengers will leave the
vessel for local excursions in the aforementioned zodiacs.
Intervening Canadian stops are also planned during these cruises
which range from 8 to 10 days.
ISSUES:
1. Whether the transportation of passengers by a foreign-
flagged cruise vessel between two ports on the Great Lakes, when
the port of embarkation is in Canada and the port of disembark-
ation is in the United States, and with various intervening stops
at both United States and Canadian ports, constitutes a violation
of 46 U.S.C. 12107 and/or 46 U.S.C. App. 289.
2. Whether the transportation of passengers by a foreign-
flagged cruise vessel between two ports on the Great Lakes, when
the port of embarkation is in the United States and the port of
disembarkation is in Canada, and with various intervening stops at
both United States and Canadian ports, constitutes a violation of
46 U.S.C. 12107 and/or 46 U.S.C. App. 289.
3. Whether a foreign-built and owned inflatable boat car-
ried on board the above-described cruise vessel used to transport
passengers on excursions in United States waters for the purpose
of sight-seeing constitutes a violation of 46 U.S.C. App. 289.
LAW AND ANALYSIS:
As you know, 12107 of title 46, United States Code, is the
documentation provision concerning the Great Lakes trade. Under
this provision, a certificate of documentation may be endorsed with
a Great Lakes endorsement for a vessel that is eligible for
documentation (per 46 U.S.C. 12102), was built in the United
States (with an exception not pertinent in this case), and
otherwise qualifies under the laws of the United States to be
employed in the coastwise trade. Under paragraph (b) of
12107:
Subject to the laws of the United States
regulating trade with Canada, only a vessel
for which a certificate of documentation
with a Great Lakes endorsement is issued
may be employed on the Great Lakes and
their tributary and connecting waters in
trade with Canada.
The predecessor of this provision was the Act of March 2, 1831
(Ch. 98, 4 Stat. 487; see also, the Act of June 17, 1864, Ch. 30,
13 Stat. 134; Revised Statutes 4318, formerly codified in 46
U.S.C. 258). Under these provisions, "[a]ny vessel of the United
States, navigating the waters of the northern,
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northeastern, and northwestern frontiers, otherwise than by sea"
was required to be enrolled and licensed in such form as other
vessels. (emphasis added)
Accordingly, it is apparent that the provisions 46 U.S.C.
12107 are applicable only to vessels documented under the laws
of the United States and do not act as a prohibition against
foreign-flagged vessels transporting passengers and merchandise on
the Great Lakes between the United States and Canada.
Notwithstanding the inapplicability of 46 U.S.C. 12107 to
the Russian-flagged vessels in question, we note that 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). For purposes of 289,
"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." (19 CFR 4.50(b))
Section 4.80a(b)(2), Customs Regulations (19 CFR
4.80a(b)(2); copy enclosed), promulgated pursuant to 46 U.S.C.
App. 289, provides that a coastwise violation occurs if a
passenger who embarks a non-coastwise-qualified vessel at a
coastwise point is on a voyage to one or more coastwise points and
a nearby foreign port or ports (but at no other foreign port) and
the passenger disembarks at a coastwise port other than the port
of embarkation. (see 19 CFR 4.80a(a)(1)(2) and (4) for the
definitions of the terms "coastwise port," "nearby foreign port,"
"embark," and "disembark," as those terms are used in the
regulation)
In its administration of 46 U.S.C. App. 289, the Customs
Service has ruled that the carriage of passengers entirely within
United States 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. However, the transportation of passengers
beyond United States territorial waters and back to the point of
embarkation, assuming the passengers do not go ashore, even
temporarily, at another United States point, often called a
"voyage-to-nowhere", is not considered coastwise trade (29 O.A.G.
318 (1912)).
In interpreting the coastwise laws, Customs has ruled that a
point in United States territorial waters is a point in the United
States embraced within the coastwise laws. The territorial waters
of the United States consist of the territorial sea, defined as the
belt, 3 nautical miles wide,
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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 the coastline differ. We further note that
as they pertain to the Great Lakes, the territorial waters of the
United States include those waters adjacent to the coast of the
United States extending to the U.S.-Canada international boundary.
(See Customs rulings 110056, dated February 13, 1989 and 112023,
dated December 23, 1991)
In regard to the schedules of the Russian-flagged cruise
vessels in question, there appears to be no violation of 46 U.S.C.
App. 289 either in the Duluth - Toronto or Toronto - Duluth
schedules (each of which includes intervening stops at U.S. and
Canadian ports) provided no passenger on either schedule "embarks"
at a "coastwise port" (e.g., Duluth) and "disembarks" at a
different "coastwise port" (e.g., Sault Ste. Marie, Michigan) as
those terms are defined in 4.80a(a)(1) and (4).
In regard to the inflatable zodiacs aboard the subject cruise
vessels, we note that qualified vessels of less than 5 net tons are
not precluded from engaging in the coastwise trade simply because
they cannot be documented under the laws of the United States.
Section 4.80(a), Customs Regulations (19 CFR
4.80(a)) enumerates the vessels which are qualified to engage in
the coastwise trade. Subparagraph (2) of this section (19 CFR
4.80(a)(2)) provides that no vessel exempt from documentation
(e.g., of less than 5 net tons) shall transport any passengers or
merchandise between United States coastwise points unless the
vessel is owned by a citizen of the United States and is entitled
to or, except for its tonnage, would be entitled to be documented
with a coastwise license. As stated above, to be entitled to a
coastwise endorsement a vessel must, among other things, be built
in the United States.
Accordingly, the foreign-built and owned inflatable zodiacs
could not be used to transport passengers in United States waters
for the purpose of sight-seeing.
HOLDINGS:
1. The transportation of passengers by a foreign-flagged
cruise vessel between two ports on the Great Lakes, when the port
of embarkation is in Canada and the port of disembarkation is in
the United States, and with various intervening stops at both
United States and Canadian ports, does not constitute a violation
of 46 U.S.C. 12107 or 46 U.S.C. App. 289.
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2. The transportation of passengers by a foreign-flagged
cruise vessel between two ports on the Great Lakes, when the port
of embarkation is in the United States and the port of
disembarkation is in Canada, and with various intervening stops at
both United States and Canadian ports, does not constitute a
violation of 46 U.S.C. 12107 or 46 U.S.C. App. 289.
3. A foreign-built and owned inflatable boat carried on board
the above-described cruise vessel used to transport passengers on
excursions in United States waters for the purpose of sight-seeing
constitutes a violation of 46 U.S.C. App. 289.
Sincerely,
Arthur P. Schifflin
Chief
Carrier Rulings Branch