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

HQ H030384 June 17, 2008 VES-3-02:OT:RR:BSTC:CCI H030384 ALS CATEGORY: Carriers Ms. Anita DeSimone H.R. Manager United Arab Agencies, Inc. 511 South Avenue Cranford, New Jersey 07016 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR 4.50(b) Dear Ms. DeSimone: This letter is in response to your request of June 9, 2008, with respect to the coastwise transportation of several individuals. Our ruling is set forth below. FACTS: You ask whether several individuals, shoreside employees of your company, may be transported on non-coastwise qualified vessels as follows: - Two of your “office staff members” will be embarking on the M/V AL ABDALI in New York, New York on June 25, 2008 and disembarking in Savannah, Georgia on June 30, 2008; - Two of your “office staff members” will be embarking on the M/V AL MIRQAB in New York, New York on July 8, 2008 and disembarking in Savannah, Georgia on July 13, 2008; - Two of your “office staff members” will be embarking on the M/V AL MANAKH in New York, New York on July 15, 2008 and disembarking in Savannah, Georgia on July 20, 2008; and - Two of your “office staff members” will be embarking on the M/V QATARI IBN AL FUJA’A in New York, New York on July 22, 2008 and disembarking in Savannah, Georgia on July 27, 2008. The individuals will be onboard “to understand perils of the sea and seaworthiness, to understand stability and structure of vessels, to learn cell position, cell guide, stack weight etc. related to carrying cargo, to understand basics of stowage, to understand lashing and the danger of out of gauge cargo, to understand the duty of crews, to understand how to monitor out of gauge and reefer cargo at sea, to learn stevedoring operation at three ports, and to understand terminal operation vs. stevedore operation.” ISSUE: Whether the subject individuals are “passengers" within the meaning of 46 U.S.C. § 55103 and 19 CFR 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. The coastwise law applicable to the carriage of passengers is found in 46 U.S.C. § 55103 (recodified by Pub. L. 109-304, enacted on October 6, 2006) and provides that: 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 is wholly owned by citizens of the United States for purposes of engaging in the coastwise traffic; and 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. Penalty. The penalty for violating subsection (a) is $300 for each passenger transported and landed. 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 CFR 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. CBP Ruling HQ 101699 (November 5, 1975); see also CBP Ruling HQ 116721 (September 25, 2006). Conversely, persons transported on a vessel are considered passengers unless they are "directly and substantially" connected with the operation, navigation, ownership or business of that vessel itself. See Cust. Bull., Vol. 36, No. 23, p. 50 (June 5, 2002). Consistent with CBP's interpretation of the term “passenger” in the above-cited June 5, 2002 notice, we have held that certain shoreside employees transported for the purpose of observing or familiarizing themselves with onboard operations are passengers. In CBP Ruling HQ H008510 (March 22, 2007) and CBP Ruling HQ H008513 (March 23, 2007), CBP held that shipping agency trainees transported aboard a vessel "to observ[e] daily life on a vessel and gain better insight about what their colleagues [that] work on a vessel actually do" or "observe what goes on during a vessel’s voyage" were passengers within the meaning of 46 U.S.C. § 55103 insofar as the trainees were not "directly and substantially" connected with the operation, navigation, ownership or business of the vessel itself. See also CBP Ruling HQ H028756 (May 29, 2008), citing CBP Ruling HQ H010696 (May 9, 2007) and CBP Ruling HQ H010662 (May 9, 2007) (shipping agencies’ human resources manager and ship broker’s trainee); CBP Ruling HQ H013452 (June 29, 2007) (stevedore); CBP Ruling HQ H013701 (July 10, 2007) (customer service auditors and sales representatives); CBP Ruling H018186 (October 11, 2007) (shoreside operations assistant).In the present case, you propose to transport land-based individuals to observe onboard vessel operations as noted in the FACTS section above. These activities are very similar in scope to the observation activities discussed in HQ H008510 and H008513. As such, they do not connect the subject individuals directly and substantially with the navigation, operation, ownership, or business of the vessel itself. Thus, to the extent that the subject individuals would not be engaged in any shipboard activities while traveling on the foreign vessel between coastwise ports that would be "directly and substantially" related to the operation, navigation, ownership or business of the vessel itself, such individuals would be considered passengers within the meaning of 46 U.S.C. § 55103 and 19 CFR 4.50(b). HOLDING:The subject individuals are "passengers" within the meaning of 46 U.S.C. § 55103 and 19 CFR 4.50(b). Therefore, the coastwise transportation of such individuals is in violation of 46 U.S.C. § 55103. Sincerely, Glen E. Vereb Chief Cargo Security, Carriers and Immigration Branch