Coastwise transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b); observers; shoreside operations; interns; HQ H019524 (Apr. 4, 2008); Cust. Bull., Vol. 36, No. 23, p. 50 (June 5, 2002); Cust. Bull., Vol. 42, No. 18, p. 21 (Apr. 23, 2008).

HQ H062595 June 9, 2009 VES-3-15 OT:RR:BSTC:CCI H062595 LLB Category: Carriers Mr. Steve Galloway Director of Corporate Operations Hapag-Lloyd 399 Hoes Lane Piscataway, New Jersey 08854 RE: Coastwise transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b); observers; shoreside operations; interns; HQ H019524 (Apr. 4, 2008); Cust. Bull., Vol. 36, No. 23, p. 50 (June 5, 2002); Cust. Bull., Vol. 42, No. 18, p. 21 (Apr. 23, 2008). Dear Mr. Galloway: This letter is in response to your May 28, 2009, correspondence in which you request "permission" for the individuals mentioned therein to embark the M/V HERO. We are construing your correspondence as a request for a ruling to determine whether the coastwise laws, specifically 46 U.S.C. § 55103 and the regulations promulgated under that statute, 19 C.F.R. § 4.50(b), apply to the factual scenario you present. Our decision follows. FACTS The voyage in question involves the transportation of the subject individuals, two of the vessel company's interns, aboard the non-coastwise-qualified M/V HERO (the "vessel”). The individuals are expected to embark in Houston, Texas on June 30, 2009 and disembark in Charleston, South Carolina on July 7, 2009. The subject individuals will be transported aboard the vessel to gain experience "working the shoreside operation of the shipping business" and "to observe the general shipboard and cargo operations from a vessel perspective." ISSUE Whether the subject individuals described 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. See 33 C.F.R. § 2.22(a)(2)(2009). 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). CBP, in precise concert with the protectionist nature of 46 U.S.C. § 55103, imposed a circumscribed construction as to the meaning of the term "passenger" under the U.S. coastwise trade laws. Under this strict interpretation of the term "passenger," persons transported on a vessel are considered passengers unless they are "directly and substantially" connected with the operation, navigation, ownership or business of that vessel itself. See Cust. Bull., Vol. 36, No. 23, p. 50 (June 5, 2002) (emphasis added). Further, CBP has determined that vessel line's shoreside employees for the purpose of observing vessel operations are passengers within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. 4.50(b). See Cust. Bull., Vol. 42, No. 18, p. 21 (Apr. 23, 2008). Consistent with CBP's interpretation of the term passenger in the foregoing June 5, 2002, notice, and its application to shoreside employees pursuant to the April 23, 2008, notice, we have held that certain shoreside employees transported for the purpose of observing or familiarizing themselves with onboard operations are passengers. In HQ H008510 (Mar. 22, 2007) and HQ H008513 (Mar. 23, 2007), CBP held that shipping agency trainees transported aboard a vessel “to observ[e] daily life on a vessel and gain[] better insight about what their colleagues [that] work[] on a vessel actually do” or “observe what goes on during a vessel’s voyage” were passengers within the meaning of 46 U.S.C. § 55103 insofar as the trainees were not “directly and substantially”  connected with the operation, navigation, ownership or business of the vessel itself. See also, e.g., HQ H019524 (Apr. 4, 2008) (terminal operations managers); HQ H010696 (May 9, 2007) and HQ H010662 (May 9, 2007) (shipping agencies’ human resources manager and ship broker’s trainee); HQ H013452 (June 29, 2007) (stevedore); HQ H013701 (July 10, 2007) (customer service auditors and sales representatives); H0118186 (Oct. 11, 2007) (shoreside operations assistant). Similarly, in the present case, you propose to transport two interns that are working in the shoreside operations departments of the vessel company to gain experience "working the shoreside operation of the shipping business" and "to observe the general shipboard and cargo operations from a vessel perspective." Although familiarizing these interns with shipboard operations may foster the business of the vessel company, it does not connect this individual directly and substantially with the business of the vessel itself. To the extent that the subject individuals would not have been engaged in any shipboard activities while traveling on the foreign vessel between coastwise ports, that would be “directly and substantially” related to the operation, navigation, ownership 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 are “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Therefore, the coastwise transportation of those individuals would be in violation of 46 U.S.C. § 55103. Sincerely, Glen E. Vereb, Chief Cargo Security, Carriers and Immigration Branch