H364652

HQ H364652 October 15, 2026 OT:RR:BSTC:CCR H364652 KAM CATEGORY: Carriers Vincent Mattiola 16192 Coastal Hwy Lewes, DE 19958 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.80a(b)(1). Dear Mr. Mattiola; This is in response to your September 29, 2026, ruling request on behalf of CetoSea, Inc., in which you inquire as to whether the operation of the non-coastwise-qualified vessel, the yacht S/V TICLUNA (“vessel”), in United States (“U.S.”) territorial waters would constitute a violation of 46 U.S.C. § 55103 and 19 C.F.R. § 4.80a(b)(1). Our decision follows. FACTS: The following facts are from your ruling request and supplements thereto. The sailing vessel at issue, the S/V TICLUNA, was built in France in 2022, and is United States-flagged. 1 The vessel holds a recreational endorsement. The vessel is owned by the U.S. corporation 2 Triple Decker Holdings, LLC. Your business, CetoSea Inc., has been hired by Triple Decker 3 Holdings, LLC, for vessel management, training, and Captain services for the vessel. Your request states that the vessel intends to transport paying passengers from Annapolis, Maryland, for daytime sailing trips for the purpose of “showcasing yacht models” and “hosting guests 4 onboard.” The vessel will then return to the same marina in Annapolis, Maryland, after several 5 hours where the passengers will disembark. The voyage will be “entirely contained within the 6 territorial waters of the United States,” never leaving the Chesapeake Bay. Specifically, you state: 1 Vincent Mattiola, Re: Request for Carrier Ruling - SV TICLUNA, (Oct. 1, 2026). 2 Vincent Mattiola, Re: Request for Carrier Ruling - SV TICLUNA, (Sept. 29, 2026). 3 Vincent Mattiola, Re: Request for Carrier Ruling - SV TICLUNA, (Oct. 1, 2026). 4 Vincent Mattiola, Re: Request for Carrier Ruling - SV TICLUNA, (Sept. 29, 2026). 5 Id. 6 Id. We desire to give interested parties the opportunity to sail aboard SV TICLUNA as a showcase of the yacht model on behalf of the manufacturer. This is a privately- owned vessel and is not listed for sale, however prospective parties wish to spend time aboard the boat underway to learn about her particulars and comfort, possibly with the intention of ordering a new vessel from the manufacturer. ISSUE: Whether the voyage described above, entirely within the territorial waters of the United States, would constitute a violation of 46 U.S.C. § 55103 as implemented by 19 C.F.R. § 4.80a(b)(1)? LAW AND ANALYSIS: 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 7 internal waters, landward of the territorial sea baseline. The coastwise laws apply to the United States, including the island territories and possessions of the United States, with the exception of 8 American Samoa, the Northern Mariana Islands, and the Virgin Islands. The Chesapeake Bay is considered internal waters of the United States, over which it exercises complete sovereignty and territorial jurisdiction. See e.g., 33 U.S.C. § 451b. The Chesapeake Bay and its tidal tributaries are classified as internal waters of the United States because they lie shoreward of the territorial sea baseline. See e.g., 33 U.S.C. § 151 and 33 C.F.R. §§ 2.24, 80.01, and 80.510. 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 9 cannot deny the right of innocent passage to foreign nations. Accordingly, the internal waters of the United States are subject to the coastwise laws of the United States and also “subject to the complete sovereignty of the nation, as much as if they were 10 a part of its land territory.” 7 33 C.F.R. § 2.22(a)(2) (2013). 8 See 46 U.S.C. § 55101. 9 United States v. Louisiana, 394 U.S. 11, 22 (1969) (Citations omitted). 10 United States v. Louisiana, 394 U.S. 11, 22 (1969) (Citations omitted). 2 11 The Passenger Vessel Services Act of 1886 (46 U.S.C. § 55103 ), the coastwise law applicable to the transportation of passengers, 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. A vessel is said to be “coastwise qualified” after it has obtained a coastwise endorsement from the U.S. Coast Guard. CBP regulations at 19 C.F.R. § 4.50(b) define a passenger as “any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business.” People carried onboard a vessel for recreational purposes, whether or not they pay a fee are considered "passengers," and their carriage between places in the United States or entirely within United States waters would be in violation of the coastwise laws. See H112098, (May 6, 1992). In its administration of 46 U.S.C. § 55103, CBP has consistently ruled that the carriage of passengers entirely within United States territorial and internal 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. See HQ 113430 (May 3, 1995); HQ 113379 (Mar. 23, 1995), H335919 (Dec. 26, 2026); see also Demarest v. United States, 2026 FL S.D. Case NO. 25-10001, Docket No. 33, Magistrate’s Report and Recommendation, pp. 10-11 (Feb. 24, 2026) (adopted in full, Mar. 15, 2026). On the other hand, 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 12 U.S. point, often called a “voyage-to-nowhere,” is not considered coastwise trade. Therefore, a vessel would not be engaged in coastwise trade if it transports passengers beyond the U.S. territorial sea and the passengers embark and disembark at the same coastwise point. Your request states that the vessel holds a recreational endorsement, not a coastwise endorsement. Further, the proposed transportation of passengers takes place solely within Chesapeake Bay, internal waters of the United States. Your request also states that embarkation and disembarkation will both occur at the same marina in Annapolis, Maryland. The carriage of passengers entirely within internal waters, even though the passengers disembark at the same point as their point of embarkation and the vessel touches no other coastwise point, is considered coastwise trade subject to the coastwise laws. Therefore, since the voyage takes place entirely 11 Recodified by Pub. L. 109-304, enacted on October 6, 2006. 3 within the internal waters of the United States, the voyage would not qualify as a “voyage-to- nowhere,” and would constitute a

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 7 internal waters, landward of the territorial sea baseline. The coastwise laws apply to the United States, including the island territories and possessions of the United States, with the exception of 8 American Samoa, the Northern Mariana Islands, and the Virgin Islands. The Chesapeake Bay is considered internal waters of the United States, over which it exercises complete sovereignty and territorial jurisdiction. See e.g., 33 U.S.C. § 451b. The Chesapeake Bay and its tidal tributaries are classified as internal waters of the United States because they lie shoreward of the territorial sea baseline. See e.g., 33 U.S.C. § 151 and 33 C.F.R. §§ 2.24, 80.01, and 80.510. 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 9 cannot deny the right of innocent passage to foreign nations. Accordingly, the internal waters of the United States are subject to the coastwise laws of the United States and also “subject to the complete sovereignty of the nation, as much as if they were 10 a part of its land territory.” 7 33 C.F.R. § 2.22(a)(2) (2013). 8 Se