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HQ 110051

MAY 10, 1989

VES-3-CO:R:P:C 110051 LLB


Mr. Harvey C. Cook
Director, Hovercraft Training and Operations
Hover Systems, Inc.
1500 Chester Pike
Eddystone, Pennsylvania 19013

RE: The applicability of the coastwise trade passenger statute to hovercraft of greater and lesser than 5 net tons, operating at least in part on inland waters in the United States.

Dear Mr. Cook:

This is in response to your letter of January 17, 1989, in which you ask that we rule on several questions regarding the use of hovercraft for passenger carriage in the United States.


It is proposed to use hovercraft of either over or under 5 net tons to carry passengers for hire (anywhere between 3 and 50 persons), in any of various situations. Some carriage, apparently, may be between coastal areas, some on inland state controlled waters (natural or man-made lakes closed to the sea) which may have been designated as non-navigable by the U.S. Coast Guard and/or U.S. Army Corps. of Engineer's, and some on nontidal rivers otherwise accessible only by canoe or kayak. Additionally, some carriage may include inland lakes and rivers bordering two or more states.


1. Is a hovercraft considered a "vessel" for purposes of the coastwise laws.

2. May a non-coastwise-qualified hovercraft, regardless of size, be used in the coastwise trade.

3. Does coastwise trade include the transportation for hire of passengers on a non-qualified vessel when that transportation occurs on:
a. Inland waters designated as non-navigable by the U.S. Coast Guard or the U.S. Army Corps. of Engineers.
b. Inland waters designated by the U.S. Coast Guard as sole state waters (lakes, either man-made or natural) and solely within the jurisdiction of a single state.
c. Inland white water, non-tidal rivers accessible only by canoe or kayak.
d. Inland waters, closed to the sea, and bordering on two or more states.


Generally, the coastwise laws prohibit the transportation of merchandise or passengers 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. The passenger coastwise law, 46 U.S.C. App. 289, 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.

Pursuant to 46 U.S.C. 12106 and 12110 and their predecessors (46 U.S.C. 65i and 65m and, before them, 46 U.S.C. 11) and consistent with 46 U.S.C. App. 883, the coastwise merchandise law, the Customs Service has consistently held that the prohibition in 46 U.S.C. App. 289 applies to all non-coastwise qualified vessels. Non-coastwise-qualified vessels include any vessel other than a vessel built in, properly documented under the laws of, and owned by citizens of the United States, with certain exceptions (see 46 U.S.C. 12106(a)(2)(B) and 19 CFR

The Customs Service has held that hovercraft are considered "vessels" for purposes of the navigation laws, of which the coastwise passenger statute is one (see T.D. 56390(1), April 8, 1965). This Treasury Decision remains a viable statement of agency policy, having been consistently cited since its issuance (Ruling Letter 104772, dated October 12, 1980). It is settled, therefore, that hovercraft are "vessels."

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, however.


Section 4.80(a), Customs Regulations (19 CFR 4.80(a)), enumerates the vessels which may engage in the coastwise trade. Subparagraph (a)(2) of this section (i.e., 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 be documented with a coastwise license a vessel must, among other things, be built in the United States (46 U.S.C. 12106(a)(2)), with an exception inapplicable in this case.

It is a well established principle that federal law determines navigability under federal statutes. Furthermore, the test of navigability has been established by the federal courts through the years. This test consists of 4 essential elements which, when taken together, state that a navigable waterway of the United States must (1) be or have been (2) used or susceptible of use (3) in the customary modes of trade and travel on water (4) as a highway for interstate commerce. The Daniel Ball, 10 Wall. 557, 563, 77 U.S., 557, 563, 19 L.Ed. 999 (1871); The Montello, 20 Wall. 430, 441, 87 U.S. 430, 441, 22 L.Ed. 391 (1874); United States v. Utah, 283 U.S. 64, 76, 51 S.Ct. 438, 441, 75 L.Ed. 844 (1931); United States v. Appalachian Electric Power Co., 311 U.S. 377, 406-408, 61 S.Ct. 291, 298-99 85 L.Ed. 243 (1940).

The 4 elements listed above are reflected in the regulations of the U.S. Coast Guard (33 CFR 2.05-25(a)(3)(i)) which state, in pertinent part, that navigable waters of the United States include:

Internal waters of the United States not subject to tidal influence that: (i) are or have been used or are or have been susceptible for use, by themselves or in connection with other waters, as highways for substantial interstate or foreign commerce notwithstanding natural or man-made obstructions that require portage.

These same 4 elements are also reflected in the regulations of the Army Corps of Engineers (33 CFR 329.4) which define navigable waters of the United States, in pertinent part, as:

...those waters that are subject to the ebb and flow of the tide and/or are presently used, or have been used in the past, or may be susceptible for use to transport interstate or foreign commerce.


Customs has no similar regulations pertaining to the statutes it enforces, preferring to look to court decisions and the regulations of these two federal agencies instead. Accordingly, in cases where specific determinations of non-navigability have been made by Coast Guard or the Corps. of Engineers, great weight is given those determinations, absent evidence to the contrary.

The occasion has arisen where there has been no determination of navigability made with respect to a particular body of water. In such cases, the procedures outlined in Customs Circular VES-3-MD of February 6, 1961, are applied. Paragraph two (2) of the "BACKGROUND" section of that document states:

The navigation laws administered by the
Bureau are applicable only on waters to which the Federal jurisdiction extends, which waters are known as the navigable waters of the United States. The ultimate determinations as to navigability are made by decisions of courts of competent jurisdiction and by acts of Congress. If no such determination has been made as to whether a body of water is part of the navigable waters of the United States, the Bureau and the
United States Coast Guard, after consulting the Corps of Engineers, apply the principles set forth in the various court decisions and administratively determine whether a particular body of waters is part of the navigable waters of the United States for the purposes of the laws administered by those agencies. These determinations are made on a cooperative basis as a question may arise.

The above-cited language does not compel Customs to defer to the U.S. Coast Guard or the Corps of Engineers regarding determinations of navigability. Indeed, it is merely a statement that both Customs and the Coast Guard will apply existing case law to reach an administrative determination within their own areas of jurisdiction. Where the matter is peculiarly within the competence of one agency, it will not consult with others.

Any reference to the above-cited Customs Circular should focus not on the language under the heading "BACKGROUND" but rather on the language in paragraph three (3) under the heading "ACTION" which states:

When a question arises as to whether a particular body of water is part of the navigable waters of the United States, the question shall be submitted to the Bureau for determination. There shall be included with 5
the request for determination (1) any available maps showing the body of water and its connecting and tributary waters; (2) information concerning the size and depth of the particular waters; (3) information on navigability and any determination on that point from the local District (or Division) Engineer, Corps of Engineers, United States Army; (4) a brief statement of the present and past use of the waters with respect to commerce or pleasure including the size of the vessels using the particular body of water; (5) any further relevant information that may be available; (6) a statement of the opinion of your office as to the navigability of the particular body of water.

In summary, the prohibitions imposed by the coastwise laws extend to all vessels regardless of their size, and to the internal waters of the United States as well as to the coastal waters. Their applicability is not affected by the fact that a body of water may be wholly within the jurisdiction of a single state, or whether its course or boundaries intrude on the territory of two or more states. Likewise, it is not a consideration whether a body of water is tidal or non-tidal, is accessible to the sea, is easily reached, or is man-made. The only factor impacting upon the propriety of the use of a non coastwise-qualified vessel, is whether the particular body of water is determined to be navigable under the above-cited criteria. A specific finding of non-navigability is not akin to the absence of a determination of navigability.


The coastwise laws prohibit the use of non-coastwise qualified vessels on inland as well as coastal waters. A specific ruling may only be issued after consideration of whether a particular body of water has been determined to be navigable.


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