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HQ 116065

November 24, 2003

VES-3-06:RR:IT:EC 115065 TLS


Mr. Jeremy F. Bachand
Cutting Edge Technologies
P.O. Box 121810
709 Tanglewood Lane
Arlington, Texas 76012

RE: Coastwise trade; Transportation of passengers; 46 U.S.C. App. §289; 19 CFR 4.80a.

Dear Mr. Bachand:

This is in response to your letter dated October 1, 2003 inquiring as to whether certain uses of three vessels your company owns constitute coastwise trade.


The three vessels at issue are foreign-built and of different sizes and configurations. You state that they will be United States-flagged and the operating crew of each will be comprised of U.S. Merchant Marine personnel. The vessels will be docked at the following locations: Boston, Massachusetts; Boca Raton, Florida; St. Petersburg, Florida; the west coast of the United States; Alaska; Hawaii; and the territories of the United States.

You propose different uses for the vessels. The first involves having the vessels docked at a stationary location and leased out as “Bed & Breakfasts.” The second involves using the vessels as “floating restaurants” that would be docked at a stationary point as well. The third involves leasing the vessels out for day charters to international waters. The fourth use would be for as a charter for extended coastwise voyages. We note your concern regarding your ability to move the vessels within the port to a docking location other than your normal dock location. For example: a customer wishes to have the vessel(s) moved to another pier closer to their hotel or event location so as to use the vessel(s) as their “hospitality suite” during a conference, convention, or to serve as their “viewing location for the Boston Pops Concert & Fireworks display on the Fourth of July in Boston.


Whether the coastwise laws, as provided for under 46 U.S.C. App. § 289 and 19 CFR 4.80a, are violated if the vessels are used in the ways described above.


The Bureau of Customs and Border Protection (CBP) enforces various navigation laws which deal with the use of vessels in what is recognized as coastwise trade. Included among these laws is the Act of June 19, 1986, as amended (24 Stat. 81; 46 U.S.C. App. § 289, sometimes called the coastwise passenger law), which 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 $300 for each passenger so transported and landed.

CBP has consistently interpreted the prohibition set forth in 46 U.S.C. App. § 289 to apply to all vessels except United States-built, owned, and properly documented vessels. See also 46 U.S.C. §§ 12106, 12110. Furthermore, CBP has promulgated regulations pursuant to 46 U.S.C. App. § 289. These regulations may be found in 19 CFR 4.80a.

The coastwise laws generally apply to points in the territorial sea, 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, in cases where the baseline and coastline differ. Furthermore, pursuant to 46 U.S.C. App. § 877, the coastwise laws are applicable to the island territories and possessions of the United States.

CBP has consistently held that the use of a non-coastwise-qualified vessel (such as each of the three vessels at issue) as a moored facility, including a “Bed and Breakfast,” does not violate the coastwise laws or any other law administered by CBP, provided that the vessel remains stationary excepting tidal movements. See, e.g., Customs ruling HQ 109904 (January 30, 1989).

Thus, In the two proposed scenarios where the vessels will remain docked at a stationary point while being used as either a “Bed and Breakfast” or a “floating restaurant,” there is no violation of the coastwise laws. Furthermore, the vessel may be relocated within the port provided passengers are not transported between locations within the port.

CBP has also held that the transportation of passengers to the high seas (i.e., beyond the three-mile territorial sea) 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. See, e.g., Customs ruling HQ 113846 (May 5, 1997). Concerning the proposed use of the vessels as day charters, the transportation of passengers from a U.S. point to international waters (i.e., beyond the three-mile territorial sea limit) and back to the point of embarkation, where they will disembark, would constitute a voyage-to-nowhere. Consequently, such a use of the vessel would not violate coastwise laws. It should be noted, however, that the carriage of fishing parties for hire, even if the vessel proceeds beyond the territorial waters and returns to the point of the passengers embarkation, is considered coastwise trade. See T.D. 55193(2).

For overnight voyages within coastwise territorial waters, we have ruled that the carriage of passengers entirely within territorial waters, even though they disembark at their point of embarkation and the vessel touches no other point, is considered coastwise trade subject to the coastwise laws. See HQ 109904, supra. You correctly note, however, that passengers on a round trip voyage may temporarily leave the vessel at another coastwise port if there is an intervening stop at a nearby foreign port (as defined in 19 CFR 4.80a(a)(2)) during the voyage.


The proposed uses for the three non-coastwise vessels at issue are permissible under 46 U.S.C. App. § 289 and 19 CFR 480a as discussed in the Law and Analysis portion of this ruling.


Glen E. Vereb

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