HQ 112172: Coastwise; Passengers; Youth Training and Sailing School; 46 U.S.C. App. 289.

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                       HQ 112172

                                       May 13, 1992
                                          



VES-3-19-CO:R:P:C  112172 MAR

CATEGORY:  Carriers

Mr. J. Stanton Keck
Managing Director
14150 N.E. 21st St.
Bellevue, Wa.  98007

RE:  Coastwise; Passengers; Youth Training and Sailing School; 46
     U.S.C. App. 289.

Dear Mr. Keck:

     This letter is in response to your inquiry of March 26,
1992, in which you request a ruling regarding the use of a
sailing vessel in United States territorial waters.

FACTS:

     In your letter, you state that you intend to use a sailing
vessel to offer sailing instruction to youth participating in a
program supported by the U.S. Navy and the U.S. Naval Academy
Alumni Association.  Presently, the sailing vessel is being
restored and is near completion.  You do not state, however,
whether the sailing vessel is foreign-built or American-built.

ISSUE:

     Whether the use of a pleasure vessel for sailing instruction
would be in violation of the coastwise passenger law, 46 U.S.C.
App. 289. LAW AND ANALYSIS:

     The coastwise laws generally prohibit the transportation of
passengers or merchandise between points in the United States
embraced within the coastwise laws in any vessel other than a
United States built, owned, and documented vessel.  46 U.S.C.
App. 289 (Supp. III 1985) & 46 U.S.C.A. 883 (West Supp. 1990). 
Points in the United States embraced within the coastwise laws
include the United States territorial waters.  The territorial
waters of the United States consist of a belt, three nautical
miles wide, adjacent to the coast of the United States and
seaward of the territorial sea baseline.

     The Customs Regulations define "passenger" for purposes of
section 289 as "any person carried on a vessel who is not
connected with the operation of such vessel, her navigation,
ownership, or business."  See 19 CFR 4.50(b)(1989).  The Customs
Service has held that a person being trained or receiving
instruction in the handling or navigation of a vessel, and whose
presence on board the vessel is required in order to receive such
training or instruction, is not a "passenger" within the
coastwise laws.  Accordingly, if the vessel is used only for such
training, then it would not be required to have a license to
engage in the coastwise trade.  See Headquarters Ruling Letter
109850, dated December 27, 1988, and Headquarters Ruling Letter
109287, dated February 24, 1988.

     Therefore, the sole use of a foreign sailing vessel in
connection with a bona fide instructional course in sailing and
navigation does not constitute coastwise trade within the meaning
of 46 U.S.C. App. 289.  However, all persons being carried in the
vessel must be involved with the operation, navigation, or
business of the vessel.  Persons who are carried on board a 
vessel for recreational purposes and who pay a fee for such
carriage would be 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.

     In your letter you do not state whether the sailing vessel
is foreign-built or American-built.  For purposes of our
analysis, however, this distinction does not change the result so
long as if the sailing vessel is foreign-built, it is being used
solely for an instructional purposes (see above).  If the vessel
is American-built, then 46 U.S.C. 289 is nonapplicable.  For
future reference, please note the that is required to obtain a
Customs Letter Ruling as detailed in section 177.2(b) of the
Customs Regulations (19 CFR 177.2(b)).  A copy is enclosed for
your reference.

     As 19 CFR 177.2(b)(iv) indicates, it is required that
information relating to place of build and nationality of
registration be included.  Specifically, the regulations state:

     If the transaction involves a vessel, the request for a
     ruling should include information relating to place of build
     and nationality of registration and, if to be used in waters
     under the jurisdiction of the U.S., the exact place or
     places of intended use, if known.  If the request for a
     ruling involves a determination as to whether or not the
     primary object of a contemplated voyage would be considered
     to be coastwise transportation in violation of 46 U.S.C. 289
     (see 4.80a of this chapter), the request should completely
     identify the voyage, including the proposed time of arrival
     at and departure from every port on the itinerary and any
     coordination of the voyage with special events at coastwise
     ports, and should be accompanied by samples, if available,
     of brochures, advertising, and other information that may be
     relevant to a determination of the primary object of the
     proposed voyage.

HOLDING:

     The sole use of a foreign sailing vessel in connection with
a bona fide instructional course in sailing and navigation is not
coastwise trade in violation of 46 U.S.C. App. 289.

     This letter addresses only those federal requirements that
are administered by the United States Customs Service.  While we
are unaware of any federal or state agency requirements that
might pertain to the undertaking you describe, it is possible
that such requirements exist.

                              Sincerely,



                              B. James Fritz
                              Chief
                              Carrier Rulings Branch