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

HQ H037858 September 12, 2008 VES-3-02-OT:RR:BSTC:CCI H037858 GG CATEGORY: Carriers Mr. Jason Weeks Quay Cruise Agencies 21905 64th Ave West, Suite 301 B Mountlake Terrace, WA 98043 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR § 4.50(b) Dear Mr. Weeks: This is in response to your correspondence of September 10, 2008, in which you inquire about the coastwise transportation of two individuals. Our ruling is set forth below. FACTS The voyage in question involves the transportation of the subject individuals, a Holland America employee who is a propulsion and switchboard specialist and his spouse, aboard the non-coastwise-qualified MV AMSTERDAM (the “vessel”), from Seattle, Washington to Juneau, Alaska. The individuals are expected to embark the vessel in Seattle on September 12, 2008, and disembark in Juneau on September 14, 2008. The stated purpose for the transportation of the subject individuals is to “conduct essential routine business connected with the operations of the vessel.” Specifically, the propulsion and switchboard specialist “will be performing training on the Azipod propulsion systems,” and the spouse will be traveling with him. ISSUE Whether the subject individuals described above 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: (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 the coastwise trade; and (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. Section 4.50(b), U.S. Customs and Border Protection (“CBP”) Regulations (19 CFR § 4.50(b)) provides as follows: A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business. You state that the propulsion and switchboard specialist will be transported on the vessel for the purpose of providing training on the Azipod propulsion systems. In this context, and 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. See CBP Ruling HQ 101699 (November 5, 1975); see also HQ 116721 (September 25, 2006), quoting HQ 101699. Thus, in the present case, to the extent that the propulsion and switchboard specialist would 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 or business of the vessel itself, as would be the case under the facts herein submitted, such individual would not be considered to be a passenger (see HQ 116721, supra; and see HQ 116659 (May 19, 2006), referencing the “direct and substantial” test). See also, e.g., Customs telex 104712 (July 21, 1980), finding that repairmen were not passengers when carried aboard a foreign vessel between U.S. ports “for [the] purpose of repairing vessel en route between such ports.” We find that the proposed activity concerning the propulsion and switchboard specialist in this case (i.e., providing training on the Azipod propulsion systems) is directly and substantially connected with the operation and business of the vessel. Therefore, we determine that the subject propulsion and switchboard specialist is not a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Accordingly, the coastwise transportation of such individual would not be in violation of 46 U.S.C. § 55103. With regard to the spouse of the propulsion and switchboard specialist, it is CBP’s longstanding position that immediate family members (i.e., a spouse and children) of officers of the vessel are not considered “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). See HQ H004335 (December 31, 2006) citing U.S. Customs Service General Letter No. 117 (May 20, 1916); see also Cust. Bull. Vol. 36, no. 8, p.50 (February 20, 2002). However, CBP’s position extends only to immediate family members of officers of the vessel, and of the company that owns the vessel, as well as immediate family members of the owner. See HQ H004335 (December 31, 2006) (holding that immediate family members of crew of the vessel are passengers); see also HQ H023116 (February 22, 2008) (holding that spouse of a sales executive who is not an officer of the vessel is considered a passenger). In the instant case, the propulsion and switchboard specialist is not one of the aforementioned individuals. Based on the foregoing, the spouse of the propulsion and switchboard specialist is considered to be a passenger within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Therefore, the coastwise transportation of the spouse would be in violation of 46 U.S.C. § 55103. HOLDING The subject propulsion and switchboard specialist described above is not a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Therefore, the coastwise transportation of such individual is not in violation of 46 U.S.C. § 55103. The subject spouse of the propulsion and switchboard specialist described above is a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Therefore, the coastwise transportation of such individual is in violation of 46 U.S.C. § 55103 . Sincerely, Glen E. Vereb Chief Cargo Security, Carriers and Immigration Branch