OT:RR:BSTC:CCR H340907 KAM
Captain Stephen Demarest
12 Bass Ave,
Key Largo, FL 22037
RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 480a(b)(1).
Dear Captain Demarest;
This letter is in response to your July 25, 2024, ruling request, in which you inquire as to whether the operation of the non-coastwise-qualified vessel, motor yacht (“M/Y”) FLORIDAZE (“vessel”), in United States (“U.S.”) territorial waters would constitute a violation of 46 U.S.C. § 55103, 19 C.F.R. § 480a(b)(1), and previous U.S. Customs and Border Protection (“CBP”) CROSS rulings. Our decision follows.
FACTS
The following facts are from your ruling request and emails to the office dated, July 25, 2024. You indicate that you currently operate small boat tours as a hobby-vocation using the non-coastwise-qualified vessel FLORIDAZE (“vessel”). The vessel is a Swedish-built, U.S. Coast Guard-documented vessel (DO 1346966). You further indicate that the vessel is used to transport up to six passengers on two-hour sunset excursions, from the point of embarkation along Adams Waterway in Key Largo, Florida. The voyage proceeds through Largo Sound, then through South Creek, and into the Atlantic Ocean, before crossing from U.S. territorial waters into the high seas. The vessel then reverses course and passengers disembark at the beginning location along Adams Waterway in Key Largo, Florida. Below is the provided chart of the excursion course:
You state that in the event of rough seas during the sunset excursion, you would like the option of staying closer to shore or rerouting the trip into the Blackwater Sound at the leeward side of Key Largo, both of which are wholly within U.S. territorial waters.
ISSUE
Whether the transportation of the subject individuals would constitute a violation of 46 U.S.C. § 55103 as implemented by 19 C.F.R. § 480a(b)(1)?
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 transportation 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 trade; and
(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, provides, in pertinent part:
(a) No vessel shall transport, either directly or by way of a foreign port, any passenger or merchandise between points in the United States embraced within the coastwise laws, including points within a harbor, or merchandise for any part of the transportation between such points, unless it is:
(1) Owned by a citizen and is so documented under the laws of the United States as to permit it to engage in the coastwise trade; ….
(emphasis added).
Similarly, 19 CFR § 4.80a(b) provides, in pertinent part:
The applicability of the coastwise law (46 U.S.C. § 55103) to a vessel not qualified to engage in the coastwise trade (i.e., either a foreign-flag vessel or a U.S.-flag vessel that is foreign-built or at one time has been under foreign flag) which embarks a passenger at a coastwise port is as follows:
(1) If the passenger is on a voyage solely to one or more coastwise ports and the passenger disembarks or goes ashore temporarily at a coastwise port, there is a violation of the coastwise law.
(2) If the passenger is on a voyage to one or more coastwise ports 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, there is a violation of the coastwise law.
(3) If the passenger is on a voyage to one or more coastwise ports and a distant foreign port or ports (whether or not the voyage includes a nearby foreign port or ports) and the passenger disembarks at a coastwise port, there is no violation of the coastwise law provided the passenger has proceeded with the vessel to a distant foreign port.
You state that currently, the subject vessel transports individuals approximately three miles from shore, or beyond the territorial sea. In its administration of 46 U.S.C. § 55103, CBP has consistently ruled that 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 U.S. point, often called a “voyage-to-nowhere,” is not considered coastwise trade. Therefore, the subject vessel would not be engaged in coastwise trade if it transports passengers beyond the U.S. territorial sea and the passengers embark and disembark at the same coastwise point. In conclusion, if the subject vessel transports passengers on a “voyage-to-nowhere” beyond the U.S. territorial sea and passengers embark and disembark the vessel at the same coastwise point, that transportation would not be a violation of 46 U.S.C. § 55103.
Further, you inquire about the option of staying close to shore or rerouting the trip to Blackwater Sound in the event of rough seas, both of which are wholly within the U.S. territorial waters. CBP has consistently 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. Pursuant to 46 U.S.C. § 55103, a vessel may not transport passengers between coastwise points unless it is coastwise-qualified. The subject vessel is not coastwise qualified insofar as it was built in Sweden. Therefore, such a voyage would constitute a violation of 46 U.S.C. § 55103 and 19 CFR § 4.80a(b). Such is consistent with CBP’s previous rulings. See, e.g., HQ H311571 (Jun. 25, 2020), HQ H307740 (May, 18, 2020), HQ H014892 (Aug. 17, 2007), HQ 113158 (July 21, 1994).
HOLDING
The transportation of passengers on a “voyage-to-nowhere” beyond the territorial sea in which the passengers embark and disembark at the same coastwise point, as described above, would not constitute a violation of 46 U.S.C. § 55103. However, a rerouting of the voyage as described above to remain close to shore or enter Blackwater Sound, a voyage which would remain wholly within U.S. territorial waters would be in violation of 46 U.S.C. § 55103 and 19 CFR § 4.80a(b).
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.” If the terms of the import or export contracts and results of the sampling records vary from the facts stipulated to herein, or CBP ascertains discrepancies based upon a review of any other pertinent information, this decision shall not be binding on CBP as provided for in 19 C.F.R. § 177(b)(1), (2) and (4), and § 177.9(b)(1) and (2).
Sincerely,
W. Richmond Beevers. Chief
Cargo Security, Carriers and Restricted Merchandise Branch
Office of International Trade, Regulations and Rulings
U.S. Customs and Border Protection