H342562

HQ H342562 December 4, 2024 OT:RR:BSTC:CCR H342562 SMS Captain Stephen Demarest 12 Bass Ave, Key Largo, FL 22037 RE: Affirmation of Headquarters Ruling H340907; Round Trip Boat Tours within Coastwise Waters; 46 U.S.C. § 55103; 19 C.F.R. § 4.80a(b)(1). Dear Captain Demarest: This letter is in response to your October 16, 2024, request for reconsideration of Regulations and Rulings’ (RR) October 4, 2024, decision, Headquarters Ruling (HQ) H340907, issued in response to your July 25, 2024, request. In your original request for a ruling, you inquired whether the operation of the non-coastwise-qualified vessel, motor yacht (M/Y) FLORIDAZE (vessel), in United States territorial waters would constitute a violation of 46 U.S.C. § 55103, 19 C.F.R. § 4.80a(b)(1). On October 4, 2024, this office ruled that the transportation of passengers on a round-trip boat tour, also known as a “voyage-to-nowhere,” where the passengers embarked and disembarked at the same coastwise point, would not constitute a violation of 46 U.S.C. § 55103, but only if the vessel traveled beyond the U.S. territorial sea. However, RR determined if the voyage remained wholly within U.S. territorial waters, a violation of 46 U.S.C. § 55103 and 19 CFR § 4.80a(b) would occur. In your current request, you contend that the distinction RR made in H340907, dated October 4, 2024, i.e., between round-trip voyages that reach the high seas versus round-trip voyages that remain within in the territorial sea, is not supported by U.S. coastwise laws. FACTS: The following facts are taken from your original ruling request, dated July 25, 2024, your request dated October 16, 2024, and any supporting e-mails RR received regarding this matter. You indicated that you currently operate small boat tours as a hobby-vocation using the non-coastwise-qualified vessel. The vessel is a Swedish-built, U.S. Coast Guard-documented vessel (DO 1346966). You further indicated that the vessel is used to transport up to six passengers on two-hour sunset sightseeing 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. You further 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. As we ruled in H340907, a voyage to nowhere that extends past the high seas, does not violate the Passenger Vessel Services Act (PVSA). Thus, the only issue remaining in this request for reconsideration is regarding a voyage that remains in the U.S coastal, i.e., territorial, waters. ISSUE: Whether the transportation of passengers on a closed loop voyage, by a non-coastwise-qualified vessel, that remains within the U.S territorial waters for the entirety of its voyage, constitutes a violation of 46 U.S.C. § 55103 as implemented by 19 C.F.R. § 4.80a(b)(1). LAW AND ANALYSIS: Pursuant to 46 U.S.C. § 55103, the Passenger Vessel Services Act, only coastwise-qualified vessels may transport passengers between ports or places in the United States to which the coastwise laws apply. 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 U.S. 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…. Similarly, 19 C.F.R. § 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: 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. 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. However, in this specific request, we are faced with a voyage that remains wholly within the U.S. territorial waters. You posit that legislative history and the plain language of 46 U.S.C. § 55103, makes no distinction between such voyages that stay within the U.S. territorial waters and those that extend beyond to the high seas. Specifically, you contend that the PVSA and CBP regulations, do not encompass round trip excursions, because the language which states “passengers between ports or places” is a fundamental requirement that two distinct points are required to implicate the PVSA. We disagree. While the term “between ports or places” is found in the PVSA, as explained in detail below, it has been this agency’s and our predecessor agency’s firm position that staying wholly within the U.S. territorial is coastwise and triggers the coastwise laws and such triggers the PVSA. CBP has consistently ruled that the carriage of passengers entirely within U.S. territorial waters, even if embarking and disembarking at the same U

Pursuant to 46 U.S.C. § 55103, the Passenger Vessel Services Act, only coastwise-qualified vessels may transport passengers between ports or places in the United States to which the coastwise laws apply. 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 U.S. 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 fo