H311571

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H311571 June 25, 2020 VES-3-02:OT:RR:BSTC:CCR H311571 AMW CATEGORY: Carriers Mr. Chris Dlugokecki Cruise Management International, Inc. 4770 Biscayne Blvd. Miami, FL 33137 RE: M/V OCEAN VICTORY; Tendering; Excursion Vessels; Rigid Inflatable Boats; 46 U.S.C. § 55103; 19 CFR §§ 4.80 and 4.80a. Dear Mr. Dlugokecki: This is in response to your June 1, 2020 letter, in which you request a ruling on behalf of Ocean Victory Partners, Ltd., regarding the proposed use of non-coastwise-compliant vessels to transport passengers between coastwise points in Alaska. Our ruling is set forth below. FACTS The following facts are from your ruling request and subsequent follow-up communications with U.S. Customs and Border Protection (“CBP”). The present request relates to the M/V OCEAN VICTORY (the “vessel”), a cruise vessel that is currently under construction at China Merchants Heavy Industry (Jiangsu) Co., Ltd. The vessel will be delivered in March 2021. The vessel will be owned by Ocean Victory Partners, Ltd (the “Owners”), a Bahamian entity. The owner will time charter the vessel to Victory Operating Company LLC (the “Operator”) between May 22, 2021 and August 1, 2021. During this time, the Operator will operate cruises between points in Alaska and nearby foreign ports (e.g., Vancouver, Canada). You have provided information demonstrating that the vessel will be 104.4 meters, approximately 345 feet, in length. During the upcoming season, the Operator plans to offer passenger excursions in remote areas of Alaskan waters using Zodiac-brand rigid-hull inflatable boats deployed from the vessel. Accordingly, you state that the Zodiacs will be used in two manners: (1) transporting passengers from the anchored vessel to shore (i.e., use as tenders), and (2) transporting passengers from anchored vessel to various sightseeing points while the passengers remain onboard the craft before returning to the vessel (i.e., use as excursion vessels). You have requested to use the vessel’s Zodiacs as tenders at two locations: Wrangell, Alaska and Petersburg, Alaska. You state that it is not safe or feasible for the vessel itself to berth at a pier at these locations. Instead, you state that these locations are “remote areas” with “no berthing facilities available,” thereby necessitating the use of the Zodiacs as tenders. You have also provided the coordinates for nine locations at which the Zodiacs will be used as excursion vessels. At these locations, you state that the Zodiacs will be used to transport passengers to various sightseeing points but that the passengers will not physically disembark the Zodiac vessels due to lack of infrastructure and environmental concerns. According to your submission, the vessel will arrive in U.S. waters outfitted with fifteen Zodiacs. The Zodiacs are U.S.-made inflatable crafts that will be manned by credentialed U.S. mariners and can carry up to 10-12 passengers. The Zodiacs are less than five net tons, and, as a result, are not eligible for U.S. documentation. Nevertheless, the Zodiacs are not otherwise eligible to be coastwise-qualified because they will be owned by a Bahamian entity. The zodiacs will arrive in and depart from the U.S. aboard the vessel. ISSUE Whether the use of the non-coastwise-qualified Zodiacs as tenders to transport passengers from a vessel anchored in U.S. waters to shore constitutes a violation of 46 U.S.C. § 55103 and 19 CFR § 4.80. Whether the use of the non-coastwise-qualified Zodiacs to transport passengers from a vessel anchored in U.S. waters on various excursions before returning them directly to the vessel constitutes a violation of 46 U.S.C. § 55103 and 19 CFR § 4.80. LAW AND ANALYSIS Generally, the coastwise laws prohibit the transportation of 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. 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 (referred to as the “Passenger Vessel Services Act” or “PVSA”), which provides, in relevant part: (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- is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and 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. Similarly, 19 CFR § 4.80 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: Owned by a citizen and is so documented under the laws of the United States as to permit it to engage in coastwise trade…. In addition, 19 CFR § 4.80a(b) provides, in pertinent part: (b) 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: 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. 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. 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. Finally, 19 CFR § 4.80(b)(2) provides: The penalty imposed for the unlawful transportation of passengers between coastwise points is $300 for each passenger so transported and landed on or before November 2, 2015, and $812 for each passenger so transported and landed after November 2, 2015 (46 U.S.C. § 55103, as adjusted by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015). With regard to the subject Zodiacs, we note that qualified vessels of less than five net tons are not precluded from engaging in the coastwise trade simply because they cannot be documented under the laws of the United States. Section 4.80(a), U.S. Customs Regulations (19 CFR § 4.80(a)) establishes the vessels that are qualified to engage in the coastwise trade. Subparagraph (2) of this section (19 CFR § 4.80(a)(2)) provides that no vessel exempt from documentation (e.g., weighing less than five 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 noted abov