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

HQ H059215 May 28, 2009 VES-3-02-OT:RR:BSTC:CCI H059215 LLB CATEGORY: Carriers James Mills Operations Coordinator residenSea 14471 Miramar Parkway, Suite 401 Miramar, Florida 33027 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b); retail stores Dear Mr. Mills: This letter is in response to your correspondence of May 1, 2009, in which you inquire about the coastwise transportation of the seven individuals mentioned therein aboard the THE WORLD. Our decision follows. FACTS The voyage in question involves the coastwise transportation of the subject individuals aboard the non-coastwise-qualified THE WORLD (the “vessel”). The subject individuals are sales representatives from various companies, such as Lalique, Judith Leiber, Westwood, St. Petersburg collection, and Ribnicks, that sell merchandise in the vessel's boutique. The individuals would embark at various ports between Los Angeles, California and Juneau, Alaska beginning June 5, 2009, and disembarking at various ports between Monterrey, California and Anchorage, Alaska, ending August 5, 2009. 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. 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 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. In the present case, we conclude that these individuals are passengers within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). In HQ H016910 (Sept. 12, 2007), CBP held that brewery executives transported aboard a vessel to promote its products were passengers within the meaning of 46 U.S.C. § 55103 insofar as the representatives were not “directly and substantially”  connected with the operation, navigation, ownership or business of the vessel itself. CBP reasoned that although transporting the brewery representatives aboard the vessel fostered the business interests of the brewery, it did not connect the representatives directly and immediately with the business of the vessel itself. Similarly, you propose to transport sales representatives of various retail stores as described above. The foregoing would foster the business of those respective retailers rather than the business of the vessel itself. 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 or business of the vessel itself, such individuals would be considered passengers within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). HOLDING The subject individuals described above that will be engaged in promoting their retail products during the subject voyage, are “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Therefore, the coastwise transportation of these individuals would be in violation of 46 U.S.C. § 55103. Sincerely, Glen E. Vereb, Chief Cargo Security, Carriers and Immigration Branch