Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b);

HQ H024346 May 1, 2008 VES-3-02-OT:RR:BSTC:CCI H024346 LLB CATEGORY: Carriers Stuart S. Dye, Esquire Holland and Knight LLP 2099 Pennsylvania Avenue, N.W. Suite 100 Washington, D.C. 20006-6801 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b); Dear Mr. Dye: This letter is in response to your March 5, 2008, correspondence and your electronic mail messages of March 17 and 18, 2008 and April 17 and 25, 2008. In your correspondence and electronic mail messages, you inquire about the coastwise transportation of the ten individuals mentioned therein aboard the CELEBRITY SOLSTICE. Our decision follows. FACTS The voyage in question involves the transportation of the subject individuals aboard the non-coastwise-qualified CELEBRITY SOLSTICE (hereinafter also referred to as the “vessel”) from Cape Liberty, New Jersey to Fort Lauderdale, Florida in October 2008. The CELEBRITY SOLSTICE is owned by Celebrity Solstice Inc. (hereinafter also referred to as the "vessel owner") and is operated by Celebrity Cruises, Inc. (hereinafter also referred to as the "vessel operator). Both of the foregoing companies are subsidiaries of Royal Caribbean Cruises, Inc. (RCCL) (hereinafter also referred to as "parent"). The purpose stated for the transportation of the individuals is delivery and positioning of the vessel as well as to prepare the vessel for the inauguration of the vessel's scheduled cruise service. The individuals listed in your March 17, 2008, electronic mail message, as amended by your electronic mail messages of March 18, 2008 and April 17 and 25, 2008, that will be transported during the subject voyage are as follows. Five of the individuals, who are attending a board of directors meeting aboard the vessel, represent the vessel owner, operator, or parent, and in some cases all three entities, as indicated below, in the following capacities: Richard D. Fain, Chairman and Chief Executive Officer (CEO) for the vessel owner, operator, and parent. Daniel J. Harahan, President for the vessel owner; President and CEO of the operator; and CEO of the parent. Brian J. Rice, Executive Vice President and Chief Financial Officer (CFO) for the vessel owner, parent, and operator. Bradley J. Stein, Secretary for the vessel owner and operator and Vice President, General Counsel and Secretary for the Parent Adam M. Goldstein, President and CEO, of the parent. The remaining five individuals will be performing the following functions during the subject voyage. The Executive Vice President, Maritime for the vessel operator will be inspecting the vessel to determine that the ship is operating according to post-shipyard delivery specification. The Senior Vice President, Marine Operations for the vessel operator will determine whether the vessel is properly manned and inspect whether the vessel is being operated by the crew according to company policy. The Vice President, Onboard Revenue for the vessel operator will determine whether hotel operations are properly staffed, meet with vessel hotel management, and inspect the hotel spaces. The Vice President, Food and Beverage, for the vessel operator, will meet with the food and beverage managers of the vessel to discuss staffing and supply issues. The Senior Vice President, Safety, Environment and Health for the parent will be inspecting whether the security, environments, and medical divisions of the vessel are properly staffed and supplied and whether safety drills are being properly executed by the staff. ISSUE Whether the individuals described in the FACTS section above are “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). LAW and ANALYSIS Generally, the coastwise laws prohibit the transportation of passengers or merchandise 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. Such a vessel, after it has obtained a coastwise endorsement from the U.S. Coast Guard, is said to be “coastwise qualified.” The coastwise laws generally apply to points in the territorial sea, which is 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. See 33 C.F.R. § 2.22(a)(2)(2007). The coastwise law applicable to the carriage of passengers is found in 46 U.S.C. § 55103 which provides: (a) In General. Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not transport passengers between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel- (1) is wholly owned by citizens of the United States for purposes of engaging in coastwise traffic; (2) has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement. (b)Penalty. The penalty for violating subsection (a) is $300 for each passenger transported and landed. The Customs and Border Protection (“CBP”) Regulations, promulgated under the authority of 46 U.S.C. § 55103, provide: A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of the vessel, her navigation, ownership, or business. 19 C.F.R. § 4.50(b). In accordance with previous Headquarters’ rulings, workmen, technicians, or observers transported by vessel between ports of the United States are not classified as “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b), if they are required to be on board to contribute to the accomplishment of the operation or navigation of the vessel during the voyage or are on board because of a necessary vessel ownership or business interest during the voyage. HQ 101699 (Nov. 5, 1975); see also HQ 116721 (Sept. 25, 2006) quoting HQ 101699. Furthermore, pursuant to U.S. Customs Service General Letter No. 117 (May 20, 1916), we have consistently held that a vessel company’s owners, officers, and if a corporate owner, members of its board of directors are, by virtue of their positions within the company, are connected with the ownership or business of that vessel so as not to be passengers while being carried aboard. See, e.g., HQ H002925 (Nov. 8, 2006). It should be noted that such individuals will not be considered passengers only if they are acting in their official capacities while onboard the vessel. See HQ H003146 (Nov. 15, 2006) and HQ H003597 (Nov. 29, 2006). We distinguish the foregoing rulings from those in which we considered officers that do not fall within any of the categories above who are on board to merely observe operations. In such cases, we have consistently ruled that such individuals would be considered passengers because such activity is only remotely or indirectly connected to the operation, navigation, or business of the vessel itself. See HQ 111628 (Apr. 6, 1991) and HQ 116668 (July 25, 2006). With regard to the first five individuals named above that represent the vessel owner and parent, by virtue of their positions and the fact that they will be attending a board of directors meeting aboard the vessel, e.g. are acting in their official capacities, as described above, they would not be considered passengers. With regard to the remaining five individuals who are unnamed above, to the extent those individuals are engaged in any shipboard activities while traveling on the foreign vessel between coastwise ports, that would be “directly and substantially” related to the operation or business itself, as would be the case under the facts herein submitted, such individuals would not be considered passengers. We find that such individuals are not “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Accordingly, the coastwise transportation of such individuals is not in violation of 46 U.S.C. § 55103. HOLDING The subject individuals are not “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Therefore, the coastwise transportation of such individuals is not in violation of 46 U.S.C. § 55103. Sincerely, Glen E. Vereb Chief Cargo Security, Carriers and Immigration Branch