HQ 111842: Coastwise Trade; 46 U.S.C. App. 883

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 111842

                        October 11, 1991

VES-3-07-CO:R:IT:C 111842 RAH

CATEGORY:  Carriers

Mr. Mel Fitzhugh
P.O. Box 1813
Gig Harbor, WA  98335

RE:  Coastwise Trade; 46 U.S.C. App.  883

Dear Mr. Fitzhugh:

     This is in response to your letter of August 1, 1991, in
which you ask whether your proposed business transaction
constitutes coastwise trade.

FACTS:

     The business would consist of selling food and sundries
from a floating houseboat to other boats on the Puget Sound
waterways and lakes.  On some occasions, the houseboat would be
moored during these transactions.

ISSUE:

     Whether selling food and sundries from a floating or moored
houseboat on the Puget Sound waterways and lakes constitutes
coastwise trade under 46 U.S.C. App.  883.

LAW AND ANALYSIS:

     Generally, the coastwise laws prohibit the transportation
of merchandise or 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.  Title 46, United States Code
Appendix, section 883 provides in pertinent part that:

     "no merchandise shall be transported ... between points
     in the United States, including Districts, Territories
     and possessions thereof embraced within the coastwise
     laws, either directly or via a foreign port, or for any
     part of the transportation, in any other vessel than a
     vessel built in and documented under the laws of the
     United States..."
                              - 2 -

     A coastwise transportation of merchandise takes place,
within the meaning of the coastwise laws, when merchandise laden
at a point embraced within the coastwise laws ("coastwise point")
is unladen at another coastwise point.  19 C.F.R.  4.80b.
Points embraced within the coastwise laws include all points
within the territorial and navigable waters of the United
States.   United States territorial waters are 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, in cases where the baseline and the
coastline differ.

     The term "merchandise" as used in 46 U.S.C. App.  883, is
not defined for purposes of that provision.  We have used the
definition of "merchandise" found in 19 U.S.C.  1401(c) in our
administration of section 883.  "Merchandise" is defined in
section 1401(c) as meaning "goods, wares, and chattels of every
description, and [including] merchandise the importation of which
is prohibited...."

     In your case, merchandise (food and sundries) will be laden
on the houseboat at a point on the Puget sound waterways.  The
vessel will float around those waters and sell the merchandise
which will be unladen/transferred to the purchasers' boat at
another point on the Puget Sound waterways.  This transaction
constitutes a coastwise transportation and is prohibited by 46
U.S.C. App.  883.

     On the other hand, Customs has held that a vessel not
qualified for the coastwise trade, which is permanently moored,
may be used as a restaurant or hotel without violating the
statute.  See, Headquarters Decisions 110202, 110239 and 110236.
We find your proposed business transaction while the vessel is
moored similar to the operation of a moored restaurant or hotel.
Therefore, selling food and sundries from your houseboat while it
is moored would not violate the coastwise laws.

HOLDING:

     Selling food and sundries from a moored houseboat on the
Puget Sound waterways and lakes does not constitute coastwise
trade under 46 U.S.C. App.  883.  However, selling such items
while the vessel is floating around those waters would be
prohibited under that statute.

                                   Sincerely,



                                   B. James Fritz
                                   Chief
                                   Carrier Rulings Branch