co BuisCarnival Corporation & PLCLong Beach Cruise Terminal 231 Windsor WayLong Beach, CA 90802

HQ H003860 December 12, 2006 VES-3-02-RR:BSTC:CCI H003860 CK CATEGORY: Carriers Remco Buis Carnival Corporation & PLC Long Beach Cruise Terminal 231 Windsor Way Long Beach, CA 90802 Dear Mr. Buis: In your letter transmitted by facsimile on November 28, 2006, to the Port Director at Los Angeles/Long Beach, CA, subsequently faxed to this branch on November 30, 2006 you requested that certain Carnival employees be allowed to travel aboard the foreign-flagged vessel CARNIVAL PARADISE from Long Beach to Catalina Island, CA. Our ruling on your request follows. FACTS: Carnival Cruise Lines seeks to carry out its Annual Quality Compliance Audits on board the CARNIVAL PARADISE. The vessel will embark the Carnival employee’s discussed below at the Long Beach seaport on January 8, 2007 and disembark the employees at Catalina Island, CA on January 9, 2007. The employees at issue include: President & CEO- Carnival Cruise Lines; Sr. Vice President- Air/Sea; Executive Vice President- Operations; Senior Vice President- Marine Operations; Senior Vice President- Hotel Operations; Vice President- Food & Beverage; Vice President- Cruise Programming; Vice President- Corporate Training; Vice President- Compliance & Quality Control; Vice President- Technical Operations; Vice President- Corporate Casino Operations. The above-listed employees are said to be boarding to perform a variety of compliance verification audits including (but not limited to): Safety & Security; Environmental Compliance; Corporate Compliance; International Regulations Compliance; Guest Satisfaction. ISSUE: Whether the corporate officers described above would be passengers under the coastwise passenger statute, 46 U.S.C. §55103 (formerly 46 U.S.C. App. 289). LAW AND ANALYSIS: The coastwise passenger statute, the former 46 U.S.C. App. 289 recodified at 46 U.S.C. §55103, pursuant to P.L. 109-304 (October 6, 2006) provides that no foreign vessel may transport passengers between ports or places in the United States either directly or by way of a foreign port, upon a penalty of $300 for every passenger so transported and landed (see 19 CFR 4.80(b). Under section 55103 (see 19 CFR 4.80a(a)(5)), a “passenger” is any person carried aboard a vessel who is not connected with the operation of the vessel, her navigation, ownership, or business (19 CFR 4.50(b)). In this regard, as resolved in a June 5, 2002, Customs Bulletin notice (Vol. 36, No. 23, p. 50, persons transported on a vessel would be passengers unless they were “directly and substantially” connected with the operation, navigation, ownership, or business of that vessel itself. One case that offers guidance specifically in this case is General Letter No. 117, dated May 20, 1916, which originally set forth the meaning of the term “passenger” appearing in 19 CFR 4.50(b). This General Letter specifically found that the officers of the company owning a vessel, and, if a corporate owner, the members of its board of directors, would, by virtue of their positions as such, be connected with the ownership or business of that vessel so as not to be passengers while being carried aboard. Furthermore, Headquarters ruling (HQ) 116752, of November 3, 2006, is instructive in explaining the operative administrative law applicable in this context, as follows: [T]he Customs Service [now Customs and Border Protection (CBP)] has repeatedly ruled that if any persons are transported coastwise who are bona fide agents of the line or officers of companies acting as such agents and if such persons while on the voyage are concerned with observing and appraising the facilities offered, such persons…are not ‘passengers’ under section 289 [now section 55103] and §4.50(b) (emphasis added) (HQ 103410, of May 5, 1978 (operations manager of freight line transported coastwise aboard freight line’s vessel to observe vessel’s operational pattern thereby deemed connected with operation and business of vessel so as not to be passenger when being transported for this purpose)). HQ 116752 (emphasis added) (executive chef of cruise line transported aboard its vessel “to monitor and access the standards of [vessel’s culinary operation onboard” found to be connected with that vessel’s operation/business, and not considered passenger. In the present case, each person listed in the FACTS portion of this ruling has been stated to be a corporate officer of Carnival Cruise Lines, the company owing the vessel, and the list of audit topics are part of the business of the vessel. HOLDING: Under the facts presented, the corporate officers of Carnival Cruise Lines, listed above, would be transported coastwise aboard the CARNIVAL PARADISE to conduct audits on a variety of topics that are part of the business of the vessel. Hence, the above-listed officers of Carnival Cruise Lines would not be passengers when so transported, and the transportation would not be in violation of 46 U.S.C. §55103. Sincerely, Glen E. Vereb Chief Cargo Security, Carriers & Immigration Branch