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

HQ H062237 June 5, 2009 VES-3-02-OT:RR:BSTC:CCI H062237 CK CATEGORY: Carriers Ms. Marion E. Currier Manager, Port Operations ResidenSea 14471 Miramar Parkway Suite 401 Miramar, FL 33027 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b) Dear Ms. Currier: This letter is in response to your correspondence dated May 28, 2009, in which you request a ruling on whether the coastwise transportation of the individuals mentioned therein aboard the M/V THE WORLD constitutes a violation of 46 U.S.C. § 55103. Our ruling on your request follows. FACTS The voyage in question involves the transportation of the subject individuals aboard the non-coastwise-qualified M/V THE WORLD (“the vessel”). The two individuals will embark on June 11, 2009 at San Fransisco, California. The individuals will disembark in Seattle, Washington on June 23, 2009. The first individual is the Corporate Secretary and General Counsel to The World of ResidenSea II, Ltd., the owner of the vessel. He will be riding the vessel for the purpose of attending a shareholder meeting of the ship owner and meetings of the board of directors of the ship owner. The second individual is the wife of the Corporate Secretary and General Counsel. ISSUE Whether the individuals described above would be “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b)? LAW AND ANALYSIS The coastwise passenger statute, former 46 U.S.C. App. § 289 recodified as 46 U.S.C. § 55103, pursuant to P.L. 109-304 (October 6, 2006), states that no foreign vessel shall transport passengers “between ports or places in the United States to which the coastwise laws apply, either directly or by way of a foreign port,” under a penalty of $300 for each passenger so transported and landed. 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. Under 46 U.S.C. § 55103, a “passenger” is any person carried aboard a vessel “who is not connected with the operation of the vessel, her navigation, ownership, or business.” See also 19 C.F.R. § 4.50(b). In this regard, U.S. Customs and Border Protection (“CBP”) provides a strict interpretation of “passenger” defining the term as persons transported on a vessel unless they are "directly and substantially" connected with the operation, navigation, ownership or business of that vessel itself. See Customs Bulletin of June 5, 2002, Vol. 36, No. 23, at pp. 50. Furthermore, pursuant to Bureau of Navigation General Letter No. 117 (May 20, 1916), we have consistently held that a vessel’s owners, officers, and if a corporate owner, members of its board of directors are, by virtue of their positions within the company, connected with the ownership or business of that vessel so as not to be passengers while being carried aboard. See, e.g., HQ H002925 (Nov. 8, 2006). It should be noted that such individuals will not be considered passengers only if they are acting in their official capacities while onboard the vessel. See HQ H003146 (Nov. 15, 2006) and HQ H003597 (Nov. 29, 2006). We distinguish the foregoing rulings from those in which we considered officers that do not fall within any of the categories above who are on board to merely observe operations. In such cases, we have consistently ruled that such individuals would be considered passengers because such activity is only remotely or indirectly connected to the operation, navigation, or business of the vessel itself. See HQ 111628 (Apr. 6, 1991) and HQ 116668 (July 25, 2006). Thus, by virtue of the first individual’s position, Corporate Secretary and General Counsel, and the fact that he will be attending a board of directors meeting aboard the vessel, e.g. acting in his official capacity, as described above, he would not be considered a passenger. Therefore, the coastwise transportation of this individual would not be in violation of 46 U.S.C. § 55103. Furthermore, it is CBP’s longstanding position that the spouse and children of the vessel’s owners, officers, and if a corporate owner, members of its board of directors, are not passengers for purposes of the passenger coastwise statute. See General Letter No. 117, supra. Accordingly, the wife of the Corporate Secretary and General Counsel, riding the vessel in his official capacity, would also not be considered a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Therefore, the coastwise transportation of this individual would not be in violation of 46 U.S.C. § 55103. HOLDING The subject individuals are not “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 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