HQ 111347

VES-3-06-CO:R:P:C 111347 GEV

CATEGORY:  Carriers

Art M. Morgan, Jr.

Director, Inspection & Control

U.S. Customs Service

909 First Ave.

Seattle, Washington 98174

RE:  Coastwise Trade; Foreign-built Vessel; Wake Survey;

     46 U.S.C. App. 289

Dear Mr. Morgan:

     This is in response to your memorandum dated October 11,

1990 (your ref:  VES-3:SE:IC AMM) transmitting a letter dated

September 27, 1990, from Mr. Darrell E. Bryan, Vice President &

General Manager, Clipper Navigation, Inc., Seattle, Washington,

and a letter dated September 21, 1990, from Mr. Stanley C.

Stumbo, Chief Naval Architect, Washington State Ferries, Seattle,

Washington, regarding the use of a foreign-built vessel for a

Puget Sound wake survey.  Our ruling on this matter is set forth

below.

FACTS:

     Washington State Ferries, an agency within the State of

Washington’s Department of Transportation, wishes to charter the

VICTORIA CLIPPER, a foreign-built passenger ferry, in order to

determine the wake characteristics of the vessel on a passage at

high tide through Rich Passage.  In order to obtain accurate

data, it is proposed that in addition to the vessel’s crew and a

full load of fuel, seventy-three (73) non-paying employees of the

State of Washington would be required to simulate full load

conditions.  No one would disembark the vessel until its return

to Seattle, the point of embarkation.

ISSUE:

     Whether the transportation in the Puget Sound on a foreign-

built passenger vessel of non-paying employees of the State of

Washington in order to simulate full load conditions for purposes

of a wake survey is prohibited by 46 U.S.C. App. 289.

                              – 2 –

LAW AND ANALYSIS:

     Title 46, United States Code Appendix, section 883 (46

U.S.C. App. 883, the coastwise merchandise statute often called

the “Jones Act”), provides in part, that no merchandise shall be

transported between points in the United States embraced within

the coastwise laws, either directly or via a foreign port, or for

any part of the transportation, in any vessel other than a vessel

built in and documented under the laws of the United States and

owned by persons who are citizens of the United States (i.e., a

coastwise-qualified vessel).  This statute has been found to

apply even to the transportation of merchandise from point to

point within a harbor.  Pursuant to 19 U.S.C. 1401(c), the word

“merchandise” means goods, wares and chattels of every

description and includes merchandise the importation of which is

prohibited.  Furthermore, Public Law 100-329 (102 Stat. 588)

amended section 883 to apply to the transportation of “valueless

material…”

     Title 46, United States Code Appendix, section 289 (46

U.S.C. App. 289, the passenger coastwise statute), prohibits the

transportation of passengers between points embraced within the

coastwise laws of the United States, either directly or by way of

a foreign port, in a non-coastwise-qualified vessel.  Pursuant to

section 4.50(b), Customs Regulations (19 CFR 4.50(b)) a

“passenger” for purposes of section 289 is defined as “any person

carried on a vessel who is not connected with the operation of

such vessel, her navigation, ownership or business.”

     Points embraced within the coastwise laws include all points

within the territorial waters of the United States, including

points within a harbor, as well as artificial islands,

installations, and devices permanently or temporarily attached to

the seabed of the outer continental shelf for the purpose of

exploring for, developing or producing resources therefrom.  The

territorial waters of the United States consist of the

territorial sea, defined as the belt, 3 nautical miles wide,

adjacent to the coast of the United States and seaward of the

territorial sea baseline.

     Customs has previously held that the use of a vessel in

oceanographic research and survey is not coastwise trade even if

the vessel transports vessel crew, scientists, instructors, or

students between coastwise points.  In addition, we have held

that the use of a vessel for the purpose of demonstration in

which persons who are transported on demonstration rides embark

and disembark at the same point is not coastwise trade even if

the ride is entirely within U.S. territorial waters.  The

rationale behind both of these rulings is that such persons are

not considered to be “passengers” within the meaning of 19 CFR

                              – 3 –

4.50(b) for purposes of 46 U.S.C. App. 289.  We believe this same

rationale applies to the transportation of employees of the State

of Washington on the VICTORIA CLIPPER for purposes of a wake

survey in the Puget Sound.

     For future reference, you should know that had we considered

the Washington State employees to be passengers for purposes of

section 289, their transportation on the subject vessel to the

high seas (i.e., beyond U.S. territorial waters) and back to the

point of embarkation, assuming they would not go ashore, even

temporarily, at another United States point, often called a

“voyage to nowhere”, is not considered coastwise trade (29 O.A.G.

318 (1912)).

HOLDING:

     The transportation in the Puget Sound on a foreign-built

passenger vessel of non-paying employees of the State of

Washington in order to simulate full load conditions for purposes

of a wake survey is not prohibited by 46 U.S.C. App. 289.

                                   Sincerely,

                                   B. James Fritz

                                   Chief

                                   Carrier Rulings Branch

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