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September 14, 1993

HQ 112874


112874 LLB


Mr. Roderick Hedley
President, Hedley Boat Company
Olcott, New York 14126

RE: Coastwise trade; Great Lakes Trade; Foreign-built vessel; In trade with Canada; 46 U.S.C. 12107; 46 U.S.C. App. 289

Dear Mr. Hedley:

Reference is made to your letter received via facsimile transmission at 11:00 p.m. on September 9, 1993, in which you request that this office make a determination as to whether certain proposed activities to be accomplished by use of a Russian hovercraft, the IRBIS, are permissible under United States law.


It is proposed that the Russian-made hovercraft IRBIS be placed in passenger transportation service on Lake Ontario. The letter requesting advice states that the transportation at issue would begin at Olcott, New York. The vessel would proceed to a port in Canada, most likely either Toronto or Oshawa. A question is posed as to whether the United States port of return must be the same port from which the vessel departed the United States. It is not clear from the facts as presented whether passengers embarked in the United States would disembark (end their voyage) in Canada, with new passengers boarding in Canada for the return voyage, or whether the same passengers would be returned to the United States.


What are the permissible uses under 46 U.S.C. App. 289 of a foreign-flag passenger vessel on the Great Lakes, when the proposed itinerary involves ports in the United States as well as ports in Canada.



The Act of June 19, 1886, as amended (24 Stat. 81; 46 U.S.C. App. ? 289, sometimes called the coastwise passenger law), 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.

For your general information, we have consistently interpreted this prohibition to apply to all vessels except United States-built, owned, and properly documented vessels (see 46 U.S.C. ?? 12106, 12110, 46 U.S.C. App. ? 883, and 19 C.F.R. ? 4.80).

In interpreting the coastwise laws as applied to the transportation of passengers, 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 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 territorial waters of the United States consist of the territorial sea, defined as the belt, three nautical miles wide, adjacent to the coast of the United States and seaward of the territorial sea baseline.

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.

The three-mile territorial sea limit is useful in defining the boundary between the territorial waters of the United States and the high seas. This limitation bears no relevance to circumstances in which the waters of the United States and those of a foreign nation are contiguous. This is true regardless of whether the point of contiguity is greater or lesser that three miles. In fact, Customs ruled in another case concerning passenger transportation on the Great Lakes, that since the international boundary was some 150 miles from the point of embarkation a voyage to nowhere would require a 300-mile round-trip (Customs Ruling 109815, December 5, 1988).

It is essential in order to comply with the law, that no passengers embarked in Olcott, New York, end the voyage at any other port or place in the United States. It is permissible for passengers to begin a voyage in Olcott which ends in Canada, or to begin in Olcott and end there after having visited Canada or at least entered Canadian waters. It is not permissible, however, to begin a voyage in Olcott and end it elsewhere in the United States, even if during the voyage the vessel proceeds to a port in Canada or into Canadian waters.


Passengers may not be transported between points or places in the United States in a foreign-flag vessel, even though during the course of a voyage the vessel enters Canadian waters or a port in Canada. Passengers may, however, be embarked and disembarked at the same United States port by a foreign-flag vessel so long as that vessel leaves the territorial waters of the United States during the voyage.


Arthur P. Schifflin

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