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

HQ H038236 September 15, 2008 VES-3-02-OT:RR:BSTC:CCI H038236 GG CATEGORY: Carriers Mr. Enrique Gonzalez II Fragomen, Del Rey, Bernsen & Loewy, LLP One Alhambra Plaza, Suite 600 Coral Gables, Florida 33134 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR § 4.50(b) Dear Mr. Gonzalez: This is in response to your correspondence of September 12, 2008, in which you inquire about the coastwise transportation of approximately 450 individuals aboard Princess Cruises’ foreign-flagged vessel, M/V STAR PRINCESS, in preparation for the vessel’s dry docking. Our ruling is set forth below. FACTS Princess Cruises will be placing the M/V STAR PRINCESS (the “vessel”), a non-coastwise-qualified vessel, out of service and undertaking a dry-docking for scheduled hull repairs and topside renovations. In advance thereof, approximately 450 persons, characterized as contractors, would board the vessel in Seattle, Washington, on September 21, 2008, along with their tools and equipment, and they would be transported aboard the vessel to San Francisco, California, where all of the contractors would disembark the vessel upon completion of the dry-dock work, on October 11, 2008. It is stated that during the course of the above-described transportation, these contractors would be actively engaged in performing work/services aboard the vessel in furtherance of the scheduled repairs and renovations which include: machinery inspection; machinery surveying; hull and structural inspections; bridge and navigation equipment upgrades; lighting upgrades; fire detection and cabling upgrades; closed circuit television (CCTV) security system installation; communications satellite equipment conversions; galley upgrades; public room carpeting and re-upholstery; signage upgrades; decking work; pool deck servicing; machinery, hull, and incinerator work; and audio/video upgrades. In addition, supervisors, managers, facilities consultants and logistical support personnel will be aboard the vessel to coordinate the foregoing activities. 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. In the present case, the subject individuals will be transported on the vessel for the purpose of preparing the vessel for dry docking, which includes machinery inspection; machinery surveying; hull and structural inspections; bridge and navigation equipment upgrades; lighting upgrades; fire detection and cabling upgrades; closed circuit television (CCTV) security system installation; communications satellite equipment conversions; galley upgrades; public room carpeting and re-upholstery; signage upgrades; decking work; pool deck servicing; machinery, hull, and incinerator work; and audio/video upgrades. 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; and see HQ 116743 (October 27, 2006), holding that contractors engaged in dry dock repair were not passengers when transported coastwise aboard foreign vessel. Thus, in the present case, to the extent that the individuals 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 individuals would not be considered to be passengers (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 in this case is directly and substantially connected with the operation and business of the vessel. Therefore, we determine that the subject individuals are not “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Accordingly, the coastwise transportation of such individuals is not in violation of 46 U.S.C. § 55103. HOLDING The subject individuals described above are not “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 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