H349383

H349383 July 8, 2026 OT:RR:BTSC:CCR H349383 KAM CATEGORY: Carriers Mr. Kevin S. Johnson KJ Marine Services, LLC 9706 Chelsea Place Mokena, IL 60448 RE: Coastwise Trade; Passengers; Bareboat Charter Agreement; 46 U.S.C. §§ 55102 and 55103. Dear Mr. Johnson: This letter responds to your correspondence of May 25, 2025, and supplemental materials requesting a ruling regarding a proposed vessel bareboat charter agreement for KJ Marine Services, LLC (“KJ Marine Services”). KJ Marine Services is a bareboat charter rental company, operating under the name Boat Chicago Charters, established in 2021. The primary service of the company involves offering a 2001 Sea Ray 340 Sundancer for three-to-four-hour bareboat rentals for residents and visitors on Lake Michigan in Chicago, Illinois, during boating season, May to October of each year. You state that KJ Marine Services holds the proper licensing through the Illinois Department of Natural Resources as a rental boat operation, as well as valid permits from the Chicago Park District/Westrec Marinas for recreational boat rentals. KJ Marine Services intends to revise a Recreational Charter Agreement to offer a 2001 Sea Ray 340 Sundancer for bareboat rentals on Lake Michigan. The subject vessel, M/Y DOLCE MARE, is a 2001 Sea Ray Sundancer 340 (“the Vessel”). The Vessel has a Certificate of Documentation with the U.S. Coast Guard with a recreational endorsement. The Vessel was constructed in New York, United States, although the build year is unknown, and does not hold a coastwise endorsement. ISSUE Whether the Recreational Charter Agreement is a valid bareboat charter agreement. 2 LAW AND ANALYSIS Generally, the coastwise laws of the U.S. prohibit the transportation of passengers or merchandise between points in the U.S. 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 U.S.1 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 Supreme Court discussed the nature of the United States’ jurisdiction over internal waters in United States v. Louisiana, saying, in pertinent part: Under generally accepted principles of international law, the navigable sea is divided into three zones, distinguished by the nature of the control which the contiguous nation can exercise over them. Nearest to the nation’s shores are its inland, or internal waters. These are subject to the complete sovereignty of the nation, as much as if they were a part of its land territory, and the coastal nation has the privilege even to exclude foreign vessels altogether. Beyond the inland waters, and measured from their seaward edge, is a belt known as the marginal, or territorial, sea. Within it, the coastal nation may exercise extensive control, but cannot deny the right of innocent passage to foreign nations.2 The coastwise laws apply to the United States, including the island territories and possessions of the United States, with the exception of American Samoa, the Northern Mariana Islands, and the Virgin Islands.3 By statute, the United States extends its’ territorial jurisdiction in Great Lakes waters all the way to the international boundary between the United States and Canada, holding that Great Lakes waters are coastal waters “within the territorial jurisdiction of the United States.”4 U.S. Customs and Border Protection, and its predecessor, the U.S. Customs Service (hereinafter collectively “CBP”), have previously determined that, as they pertain to the Great Lakes, the territorial waters of the United States include those waters adjacent to the coast of the United States extending to the U.S.-Canada international boundary.5 Accordingly, it has been the longstanding position of CBP that the coastwise laws are also applicable to the waters of the Great Lakes.6 1 46 U.S.C. § 55102; 46 U.S.C. § 55103. 2 United States v. Louisiana, 394 U.S. 11, 22 (1969) (Citations omitted). 3 See 46 U.S.C. §55101. 4 16 U.S.C. § 1453(1) and (3). 5 See Customs rulings HQ H113158 (Jul. 21, 1994), HQ H110056, (Feb. 13, 1989), and HQ H112023, (Dec. 23, 1991). 6 See, e.g. HQ 109815 (Dec. 5, 1988), where the “use of a non-coastwise-qualified submersible vessel in Lake Superior for dual use in research/exploration and passenger touring” was subject to the coastwise laws. 3 The coastwise law applicable to the transportation of passengers is found at 46 U.S.C. § 551037 which provides, in pertinent 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- (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. U.S. Customs and Border Protection (“CBP”) Regulations, promulgated under the authority of 46 U.S.C. § 55103, provide, 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; ….8 (emphasis added). Similarly, 19 CFR § 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: (1) 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. (2) 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. (3) 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 7 Recodified by Pub. L. 109-304, enacted on October 6, 2006. 8 19 C.F.R. § 4.80. 4 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 held 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 coastwise point, is considered coastwise trade subject to the coastwise laws.9 Passengers are defined as, “any person carried on a vessel who is not connected with the operation of the vessel, her navigation, ownership, or business.”10 With respect to chartering, maritime law recognizes three types of charterparties, the voyage charter, the time charter, and the demise or bareboat charter. The United States Supreme Court has stated that to create a bareboat charter, the owner of the vessel must completely and exclusively relinquish “possession, command, and navigation” thereof to

Generally, the coastwise laws of the U.S. prohibit the transportation of passengers or merchandise between points in the U.S. 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 U.S.1 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 Supreme Court discussed the nature of the United States’ jurisdiction over internal waters in United States v. Louisiana, saying, in pertinent part: Under generally accepted principles of international law, the navigable sea is divided into three zones, distinguished by the nature of the control which the contiguous nation can exercise over them. Nearest to the nation’s shores are its inland, or internal waters. These are subject to the complete sovereignty of the nation, as much as if they were a part of its land territory, and the coastal nation has the privilege even to exclude foreign vessels altogether. Beyond the inland waters, and measured from their seaward edge, is a belt known as the marginal, or territorial, sea. Within it, the coastal nation may exercise extensive control, but cannot deny the right of innocent passage to foreign nations.2 The coastwise laws apply to the United States, including the island territories and possessions of the United States, with the exception of American Samoa, the Northern Mariana Islands, and the Virgin Islands.3 By statute, the United States extends its’ territorial jurisdiction in Great Lakes waters all the way to the international boundary between the United States and Canada, holding that Great Lakes waters are coastal waters “within the territorial jurisdiction of the United Stat