Corrected entry: They're supposed to be far out at sea, but in the beginning of the "walk the plank" scene, as the camera looks at Nitro, the shoreline and buildings can be seen.
Movie Nut
11th Sep 2017
Down Periscope (1996)
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Correction: This isn't a mistake since at no point is it established that they're "far out to sea". All we know is that they're out of a designated containment zone. The largest actual number given in the movie is "12,000 yards", and that's the range between ships and not ship-to-shore. Since there's no way to establish the submarine's distance to shore, having the shore visible in the background is not a mistake. Indeed, the fact that they dumped Pascal on what looks like a small fishing trawler highly suggests they ARE close to shore.