VES-5-OT:RR:BSTC:CCI H014892 LLB
Mr. Jorge L. Viteri
District Manager, California
Quay Cruise Agencies, U.S.A.
1000 Del Amo Boulevard
Carson, California 90746-3520
RE: Voyage-to-nowhere; Passengers; Non-coastwise-qualified vessel; 46 U.S.C. § 55103
Dear Mr. Viteri:
This letter is in response to your correspondence of July 26, 2007, in which you request a ruling on behalf of your client, Norwegian Cruise Line. In your ruling request, you inquire whether the proposed voyage of the NORWEGIAN PEARL would constitute a “voyage to nowhere”. Our decision follows.
FACTS
The voyage in question involves the Bahamian-flagged vessel the NORWEGIAN PEARL (the vessel). The vessel will embark passengers in Los Angeles, California on September 28, 2007, at which time the vessel will depart only to international waters prior to returning to Los Angeles. While aboard the vessel passengers would be allowed to shop in the vessel’s duty-free shop and engage in casino gambling. The passengers will disembark in Los Angeles on September 29, 2008.
ISSUE
Whether the transportation of passengers aboard the subject vessel pursuant to a “voyage-to-nowhere” constitutes a violation of 46 U.S.C. § 55103.
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. Such a vessel, after it has obtained a coastwise endorsement from the U.S. Coast Guard, is said to be “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. § 55103 which provides:
(a) In General. Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not transport passengers between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel-
(1) is wholly owned by citizens of the United States for purposes of engaging in coastwise traffic;
(2) has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement.
(b)Penalty. The penalty for violating subsection (a) is $300 for each passenger transported and landed.
The Customs and Border Protection (“CBP”) Regulations, promulgated under the authority of 46 U.S.C. § 55103, provide:
A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of the vessel, her navigation, ownership, or business.
19 C.F.R. § 4.50(b).
In interpreting the coastwise laws as applied to the transportation of passengers, the CBP 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 point, is considered coastwise trade subject to the coastwise laws. However, the transportation of passengers to the high seas or foreign 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.
The first of these positions, regarding transportation of passengers entirely within territorial waters on a voyage in which they embark and disembark at the same coastwise point is based on a 1900 decision (Treasury Decision 22275). Our rulings have consistently followed this position. The second of these positions, regarding transportation of passengers from a point in the United States to the high seas or foreign waters and back to the same point, is based on a 1912 opinion of the Attorney General of the United States (29 Opinions of the Attorney General 318). We have consistently followed this position as well.
In regard to the proposed use of the NORWEGIAN PEARL, the transportation of passengers on a casino cruise, as described in the “facts” section above, would not violate 46 U.S.C. § 55103 provided the requisite criteria of a “voyage-to-nowhere” as discussed above are met.
Although not specifically made a subject of the ruling request by the requester in this matter, we recognize the potential for certain issues to arise regarding the operation of the duty-free shop during the proposed voyage. The operation of duty-free stores is not within the purview of this branch. We suggest that you direct any inquiries you may have in that regard to:
U.S. Customs and Border Protection
Office of International Trade
Regulations and Rulings
Entry Process and Duty Refunds Branch
1300 Pennsylvania Avenue, N.W.
Mint Annex
Washington, D.C. 20229
Parenthetically, we note that gambling activities are not within the purview of CBP but rather the Department of Justice. We suggest that you direct any inquiries you may have in that regard to the following address:
Organized Crime and Racketeering Section
Criminal Division
Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, D.C. 20530
HOLDING
The transportation of passengers aboard the subject vessel pursuant to a “voyage-to-nowhere” does not constitute a violation of 46 U.S.C. § 55103.
The scope of this ruling is limited to issues concerning the use of a non-coastwise-qualified vessel conducting a “voyage-to-nowhere.” The ruling does not decide issues concerning shipboard gambling and duty-free store operations, nor does it constitute any approval to engage in such activities.
Sincerely,
Glen E. Vereb
Chief
Cargo Security, Carriers, and Immigration Branch