HQ 112649: Coastwise Trade; Territorial Waters; Navigable Waters; Internal Waters.

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 112649

                         April 22, 1993

VES-3-06-CO:R:IT:C 112649 DEC  

CATEGORY:  Carriers

Mr. Jeff LaRoche
Box 11017
Zephyr Cove, Nevada  89448


RE:  Coastwise Trade; Territorial Waters; Navigable Waters;
     Internal Waters.


Dear Mr. LaRoche:

     This letter is in response to your inquiry of March 29,
1993, in which you seek clarification of the permissible use of
your vessel if it is issued a registry or coastwise endorsement. 


FACTS:

     In your correspondence, you indicated that your current
efforts to obtain a coastwise endorsement from the United States
Coast Guard have been frustrated due to insufficient
documentation of the vessel's chain of title.  Alternatively, you
indicated that the Coast Guard has informed you of the
possibility of issuing a registry for your vessel.  Your
objective is to use your vessel to provide sightseeing tours for
six or fewer passengers on Lake Tahoe.  Based on your
investigation, you have discovered that Lake Tahoe is deemed to
be a federally navigable waterway.


ISSUE:

     Whether a non-coastwise qualified vessel that has been
issued a registry may legally offer sightseeing tours carrying
six or fewer passengers on a federally-deemed navigable internal
waterway.





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.  The coastwise law applicable to
the carriage of passengers is found in Title 46, United States
Code, Appendix, section 289 (46 U.S.C. app.  289) and provides
that:

          No foreign vessel shall transport passengers
          between ports or places in the United States
          either directly or by way of a foreign port,
          under a penalty of $200 for each passenger so
          transported and landed.

46 U.S.C. app.  289 (1992).  The use of your yacht, absent a
coastwise endorsement, is restricted by the prohibition contained
in the passenger coastwise law.

     Notwithstanding this coastwise restriction, your yacht may
be employed in the following uses.  While the Customs Service has
ruled, pursuant to 46 U.S.C. app.  289, 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, 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 United States point, often
called a "voyage to nowhere," is not considered coastwise trade. 
Thus, a vessel with a Coast Guard issued registry could legally
engage in such an operation.

     The Customs Service has held that the coastwise laws, as
well as the other navigation laws administered by the Customs 
Service, are applicable to vessels engaged in activities in the
territorial and navigable waters of the United States, its 
territories and possessions.  Headquarters Ruling Letter 110994 
(May 24, 1990); Headquarters Ruling Letter 108345 (May 13, 1986). 
The territorial waters of the United States consist of the
territorial sea, defined as the belt, three nautical miles wide
seaward of the territorial sea baseline, and of the internal
waters, landward of the territorial sea baseline, in cases where
the baseline and coastline differs.  Our definition
notwithstanding, reference to the term territorial waters
frequently includes both territorial seas and internal waters. 
I. Brownlie, Principles of Public International Law 183, n.2, (3d
ed. 1979).  This concept is reflected in the term navigable 



waters, which, as defined in Coast Guard regulations, include the
territorial sea of the United States, the internal waters of the
United States subject to tidal influence, and certain other
internal waters that are not subject to tidal influence.  33
C.F.R.  2.05-25 (1992).

     An alternative use of a non-coastwise qualified vessel is to
execute a bareboat charter.  Under a bona fide bareboat charter,
the owner relinquishes complete control and management to the
charterers for the charter period.  The charterer is, therefore,
treated as the owner of the yacht for the period of the charter
and, because owners are not considered "passengers" for purposes
of the coastwise laws, the charterer is not proscribed by the
coastwise laws from using the yacht during the charter for
pleasure purposes only, including the transportation of family
and guests.  If the owner retains any degree of management or
control, however slight, the charter is a time or voyage charter. 
The decisive factor is whether complete control and management
has been surrendered by the owner to the charterers so that for
the charter period the charterers are, in effect, the owners pro
hac vice (i.e. for this turn; for this one particular occasion). 
The situation you depicted in your letter (i.e sightseeing with
you or your agent on board) appears to preclude this option.

     A yacht chartered under a charter arrangement other than a
bareboat charter (e.g., a time or voyage charter) and used in
coastwise transportation would be subject to penalties under the
coastwise laws.  A yacht chartered under a bareboat charter
agreement could also be subject to these penalties if it were
used for other than pleasure purposes or if the actions of these
parties negated the term of the bareboat charter agreement (e.g.,
if "guests" paid for or contributed to the expense of the trip). 
The issue of the characterization of a charter, either as a
bareboat or a time charter, is determined on a case by case 
basis, depending upon the circumstances of each charter.  Before
Customs can issue a binding letter ruling designating the 
proposed usage as a bareboat charter, it is necessary that you
submit a copy of the charter agreement.  You may obtain a ruling
by contacting the U.S. Customs Service at the following address:



                    Chief, Carrier Rulings Branch
                    U.S. Customs Service
                    1301 Constitution Avenue, N.W.
                    Washington, D.C.  20229
                    Attention:  Franklin Court




HOLDING:

     The coastwise laws generally apply to points in the
territorial sea, 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.  Consequently,
use of your vessel for sightseeing tours on Lake Tahoe, a
coastwise area, with a registry or absent a coastwise endorsement
would be a violation of Customs law.

                              Sincerely,




                              Acting Chief