VES-3-02-RR:IT:EC 114883 GOB
William N. Myhre. Esq.
Preston, Gates, Ellis & Rouvelas, Meeds LLP
1735 New York Avenue, N.W.
Suite 500
Washington, D.C. 20006-5209
RE: Coastwise transportation of passengers; 46 U.S.C. App. 289
Dear Mr. Myhre:
This is in response to your letter of November 29,1999 on behalf of American Classic Voyages Co (“AMCV”).
FACTS:
You state that “AMCV has contracted to purchase the vessel which is now being operated in non-coastwise trade under the name Nieuw Amsterdam.”
In your request, you seek confirmation of the following assertions:
(1) management [and technical] personnel employed by AMCV, as the prospective purchaser of the Nieuw Amsterdam, who are to be embarked on the vessel in connection with the acquisition for the purpose of learning the operation of the vessel and facilitating the efficient transition between buyer and seller, are not passengers within the meaning of the coastwise laws; and
(2) even if those persons were deemed passengers within the meaning of the coastwise laws, their transportation between a coastwise point in the United States and a point in the U.S. Virgin Islands or in Puerto Rico would not be subject to the prohibition against transportation of passengers between two coastwise points by a non-coastwise qualified vessel under 46 App. U.S.C. 289.
ISSUE:
The applicability of the coastwise laws to the above-stated facts.
LAW AND ANALYSIS:
Generally, the coastwise laws prohibit the transportation of passengers or merchandise 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. A vessel that is built in, documented under the laws of, and owned by citizens of the United States, and which obtains a coastwise endorsement from the U.S. Coast Guard, is referred to as "coastwise-qualified."
The coastwise laws generally apply to points in the territorial sea, which is 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.
The coastwise law applicable to the carriage of passengers is found in 46 U.S.C. App. 289 (sometimes called the “Passenger Vessel Services Act” and the “coastwise passenger statute”) and provides that:
No foreign vessel shall transport passengers between ports or places in the United States, either directly or by way of a foreign port, under a penalty of $200 for each passenger so transported and landed.
Section 4.50(b), Customs Regulations (19 CFR 4.50(b)) states as follows:
A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business.
Based upon the specific facts and circumstances presented, we concur with your assertion that management and technical personnel of AMCV are not passengers within the meaning of 46 U.S.C. App. 289 and 19 CFR 4.50(b) because they have a sufficient connection with the operation, navigation, ownership, or business of the vessel. We emphasize that our determination is limited to the specific facts and circumstances herein.
We also agree with your second assertion, as excerpted in the FACTS section, above.
Pursuant to 46 U.S.C. App. 877, “the coastwise laws of the United States shall not extend to the Virgin Islands of the United States until the President of the United States shall, by proclamation, declare that such coastwise laws shall extend to the Virgin Islands and fix a date for the going into effect of same.” To date, there has been no presidential proclamation extending the coastwise laws to the U.S. Virgin Islands.
With respect to 46 U.S.C. App. 289 and Puerto Rico, 46 U.S.C. App. 289c provides, in pertinent part:
(a) Authorization of transportation
[N]otwithstanding any other provision of law, passengers may be transported on passenger vessels not qualified to engage in the coastwise trade between ports in Puerto Rico and other ports in the United States, directly or by way of a foreign port, except as otherwise provided in this section.
(b) Notification by Secretary; termination of services
(1) Upon a showing to the Secretary of Transportation, by the vessel owner or charterer, that service aboard a United States passenger vessel qualified to engage in the coastwise trade is being offered or advertised pursuant to a Certificate of Financial Responsibility for Indemnification of Passengers for Nonperformance of Transportation (46 App. U.S.C. 817e) from the Federal Maritime Commission for service in the coastwise trade between ports in Puerto Rico and other ports in the United States, the Secretary shall notify the owner or operator of each vessel transporting passengers under authority of this section that he shall, within 270 days after notification, terminate all such service. Coastwise privileges granted to every owner or operator under this section shall expire on the 270th day following the Secretary’s notification.
(2) Upon a showing to the Secretary, by the vessel owner or charterer, that service aboard a United States passenger vessel not qualified to engage in the coastwise trade is being offered or advertised pursuant to a Certificate of Financial Responsibility for Indemnification of Passengers for Nonperformance of Transportation (46 App. U.S.C. 817e) from the Federal Maritime Commission for service in the coastwise trade between ports in Puerto Rico and other ports in the United States, the Secretary shall notify the owner or operator or each foreign-flag vessel transporting passengers under authority of this section that he shall, within 270 days after notification, terminate all such service. Coastwise privileges granted to every owner or operator of a foreign-flag vessel transporting passengers under authority of this section shall expire on the 270th day following the Secretary’s notification.
...
(d) Reinstatement of coastwise privileges
Any coastwise privileges granted in this section that expire under subsection (b)(1) or (b)(2) of this section shall be reinstated upon a determination by the Secretary that the service on which the expiration of the privileges was based is no longer available.
The authorization of 46 U.S.C. App. 289c would be applicable to authorize the transportation of passengers between a point in the U.S. and a point in Puerto Rico provided that the Secretary of Transportation has not terminated such services as described in 46 U.S.C. App. 289c(b)(1) or (2). We have contacted the Department of Transportation. The Office of the Chief Counsel of the Maritime Administration, which is within the Department of Transportation, has advised us that it is not aware of any notification by the Secretary or termination of services within the meaning of 46 U.S.C. App. 289c(b). Accordingly, it is our view that the transportation of passengers between Puerto Rico and a point in the U.S. is authorized by 46 U.S.C. App. 289c.
HOLDINGS:
1. Based upon the specific facts and circumstances presented, the management and technical personnel of AMCV are not passengers within the meaning of 46 U.S.C. App. 289 and 19 CFR 4.50(b) because they have a sufficient connection with the operation, navigation, ownership, or business of the vessel.
2. The transportation of passengers between a coastwise point in the U.S. and a point in the U.S. Virgin Islands or in Puerto Rico is not prohibited by 46 U.S.C. App. 289.
Sincerely,
Jerry Laderberg
Chief,
Entry Procedures and Carriers Branch