Coastwise transportation; Definition of passenger; Vessel company owners and spouses; 46 U.S.C. App. 289

HQ 111914 October 7, 1991 VES-3-02-CO:R:IT:C 111914 LLB CATEGORY: Carriers Mr. Robert J. Stefani Robins, Kaplan, Miller, and Ciresi 1220 Nineteenth Street, N.W. Washington, D.C. 20036-2405 RE: Coastwise transportation; Definition of passenger; Vessel company owners and spouses; 46 U.S.C. App. 289 Dear Mr. Stefani: Reference is made to your letter of September 23, 1991, in which you request a ruling on the transportation of vessel owners and their spouses between coastwise points on a non-coastwise- qualified vessel. You have requested that your request and the responsive ruling letter be accorded confidential treatment. FACTS: A Liberian-flag cargo vessel is scheduled to depart the port of Charleston, South Carolina, in early October of 1991. From there, the vessel will call at the ports of Beaumont and Houston, Texas, Mobile, Alabama, and Panama City and Port Everglades, Florida. Cargo will be laden and unladen at these various ports, although presumably no cargo laden at one United States port will be unladen at another such port. The vessel is owned by a privately held Norwegian company which has time chartered the vessel to an operating company in which the holding company owns a 50 percent share. It is requested that four persons, not members of the vessel's crew, be permitted to board at Charleston and disembark at Port Everglades. The four citizens of Norway include an individual who is the principal and controlling shareholder in the private holding company, his sister who is a minority shareholder in the holding company, and their respective spouses. The reported purpose of the proposed transportation is to permit the owners to observe the lading and unlading process in order to evaluate possible changes in crew and cargo-handling. ISSUE: Whether the transportation between coastwise points by non- coastwise-qualified vessel, of vessel owners and their spouses is a violation of the coastwise passenger transportation statute, 46 U.S.C. App. 289. LAW AND ANALYSIS: The coastwise passenger transportation statute prohibits the transportation of 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 statute, 46 U.S.C. App. 289, 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 penalty of $200 for each passenger so transported and landed. For purposes of the coastwise laws, a vessel "passenger" is defined as "... any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business." (Section 4.50(b), Customs Regulations (19 CFR 4.50(b))). The Customs Service has ruled that the wives and children of crew members and owners of vessels are not passengers within the meaning of the statutory proscription, regardless of whether a fare is paid for their transportation. Examples of this position may be seen in Customs ruling letters 103279 (February 7, 1978), 108944 (May 8, 1987), and 111255 (February 6, 1991). As previously indicated, the request for ruling in this case included a request (without elaboration) that the request and the ruling be held confidential. The Customs Regulations are quite specific in requiring that the reasons for such a request be clearly identified (19 CFR 177.2(b)(7)). To the extent possible, we have avoided utilizing identifying information in this ruling letter, however, we cannot withhold release of the case materials in our file upon receipt of a lawful request for same in the absence of some further justification. HOLDING: Vessel owners and their spouses may be transported between coastwise points by a non-coastwise-qualified vessel, without violating the coastwise passenger transportation statute, 46 U.S.C. App., 289. Sincerely, Stuart P. Seidel Director, International Trade Compliance Division