VES-3-02-RR:IT:EC 114031 GEV
Gary M. Haugen, Esq.
Bauer, Moynihan & Johnson
2101 Fourth Avenue - 24th Floor
Seattle, Washington 98121-2320
RE: Coastwise Trade; Sightseeing; Voyage-to-Nowhere; SUPER
MEXICO;
46 U.S.C. App. 289
Dear Mr. Haugen:
This is in response to your letter of July 16, 1997, on
behalf of your client, Lakeside Tours, Inc. ("Lakeside"),
requesting a ruling that Lakeside's proposed use of a non-coastwise-qualified vessel to carry passengers constitutes a
"voyage-to-nowhere" and not an engagement in the coastwise trade.
You state that Lakeside has made an offer to purchase the subject
vessel contingent on receiving an acceptable ruling from Customs.
This contingency must be removed by August 15, 1997. You
therefore ask that this matter be handled on an expedited basis.
FACTS:
Lakeside is an Alaska corporation which intends to purchase
the surface effect catamaran SUPER MEXICO (the "Vessel") for use
in carrying passengers on day excursions which will depart from
and return to Seward, Alaska. The Vessel was built outside of
the United States and is reportedly documented under the laws of
Norway as of the date of your letter. The Vessel will be
redocumented under the laws of the United States before it begins
the operations described below.
The Vessel will engage in transporting passengers on day
voyages through Resurrection Bay to and from the high seas. Each
voyage will be approximately 100 miles in length and
approximately five hours in duration, with passengers embarking
and disembarking at Seward, Alaska. No passenger will disembark
the Vessel at any point during the voyage. The Vessel will
transport the passengers for sightseeing and marine observation
purposes, with no fishing activities to occur during any part of
the voyage.
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ISSUE:
Whether the operation of the Vessel as described above
constitutes a valid "voyage-to-nowhere" thereby obviating the
applicability of 46 U.S.C. App. 289.
LAW AND ANALYSIS:
Title 46, United States Code Appendix, 289 (46 U.S.C. App.
289, the passenger coastwise law) as interpreted by the Customs
Service, prohibits the transportation of passengers between
points in the United States embraced within the coastwise laws,
either directly or by way of a foreign port, in a non-coastwise-qualified vessel (i.e., any vessel that is 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, Customs Regulations (19 CFR 4.80a) is
interpretive of 289.
In its administration of 46 U.S.C. App. 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 coastwise laws.
However, the transportation of passengers to the high seas (i.e.,
beyond U.S. 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)). It should be noted that the carriage of fishing
parties for hire, even if the vessel proceeds beyond territorial
waters and returns to the point of the passengers' embarkation,
is considered coastwise trade (T.D. 55193(2)).
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,
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.
In regard to the proposed operation of the SUPER MEXICO, the
transportation of passengers on sightseeing/marine observation
excursions from the vessel's berth in Seward, Alaska, to the high
seas and returning to the same point without stopping at any
other coastwise point would constitute a valid "voyage-to-nowhere". Accordingly, the aforementioned excursions would not
be in violation of 46 U.S.C. App. 289.
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HOLDING:
The operation of the Vessel as described above constitutes a
valid "voyage-to-nowhere" thereby obviating the applicability of
46 U.S.C. App. 289.
Sincerely,
Jerry Laderberg
Acting Chief
Entry and Carrier Rulings Branch