Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR § 4.80a

HQ H039057 . September 24, 2008 VES-3-02-OT:RR:BSTC:CCI H039057 GG CATEGORY: Carriers Mr. Todd Reasor ISS San Francisco Pier 15, The Embarcadero San Francisco, California 94111 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR § 4.80a Dear Mr. Reasor: This is in response to your correspondence of September 22, 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, two representatives of Haque & Sons, aboard the non-coastwise-qualified MT GINGA FALCON (the “vessel”), on a proposed voyage from San Francisco, California, to Long Beach, California, and back to San Francisco. The individuals will embark the vessel on September 24, 2008 in San Francisco, and disembark in San Francisco on September 29, 2008. It is expected that the individuals will not disembark or go ashore temporarily in Long Beach. The stated purpose for the transportation of the subject individuals is to monitor crew performance on board, and assist the vessel master. ISSUE Whether the use of a non-coastwise-qualified vessel for the transportation of the subject individuals in the voyage as described above, constitutes an engagement in coastwise trade in violation of 46 U.S.C. § 55103. 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 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 no foreign vessel shall transport passengers “between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port,” under a penalty of $300 for each passenger so transported. See also 19 C.F.R. § 4.80(b)(2). 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 U.S. Customs and Border Protection ("CBP") Regulations promulgated pursuant to 46 U.S.C. § 55103 are found at 19 C.F.R. § 4.80a. These regulations provide guidelines for determining whether the movement of passengers between two coastwise points is considered coastwise trade. The term "embark" is defined as a "passenger boarding a vessel for the duration of a specific voyage." See 19 C.F.R. § 4.80a(a)(4). A passenger "disembarks" from the vessel if the passenger "finally and permanently" leaves the vessel at the conclusion of the specific voyage. See Headquarters Ruling Letter 112208, dated June 29, 1992. In its administration of 46 U.S.C. § 55103, CBP has ruled that the carriage of passengers entirely within territorial waters, even though the passengers disembark at their point of embarkation and the vessel touches no other coastwise point, is considered coastwise trade subject to the coastwise laws. However, the transportation of passengers to the high seas (i.e., beyond the three-mile territorial sea) and back to the point of embarkation, assuming the passengers do not go ashore, even temporarily, at another United States point (often called a "voyage to nowhere"), is not considered coastwise trade. See 29 O.A.G. 318 (1912). In the present case, the contemplated voyage between San Francisco and Long Beach and back to San Francisco, involves the transportation of passengers beyond the three-mile territorial sea, through international waters. Moreover, the subject individuals will not disembark or go ashore temporarily in Long Beach, but rather will return with the vessel to the point of embarkation in San Francisco, where they will disembark. Accordingly, 46 U.S.C. § 55103 is inapplicable to the subject voyage, and there is no violation of the coastwise statute. Notwithstanding the foregoing, we also note that the subject individuals would not be considered to be passengers under the coastwise passenger statute. In the case at hand, the subject individuals will be transported on the vessel for the purpose of monitoring crew performance. 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. Here, to the extent that the subject 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 would not be in violation of 46 U.S.C. § 55103. HOLDING The use of a non-coastwise-qualified vessel in the proposed voyage described above does not constitute an engagement in the coastwise trade in violation of 46 U.S.C. § 55103, since the vessel will have traveled through international waters during the subject voyage, and the passengers will embark and disembark at the same coastwise point. Moreover, 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