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

HQ H065443 June 26, 2009 VES-3-02:OT:RR:BSTC:CCI H065443 CK CATEGORY: Carriers Ms. Tracy J. Johnston Norton Lilly International 1341 N. Delaware Avenue, Suite 507 Philadelphia, PA 19125 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR 4.50(b) Dear Ms. Johnston: This letter is in response to your request of June 12, 2009, with respect to the coastwise transportation of the individual mentioned therein. Our ruling is set forth below. FACTS: You forwarded a request of the vessel owner/ship management company’s parent corporation, Cargotec Corporation, to ask whether one individual, a trainee, may ride the non-coastwise qualified PACIFIC CELEBES among various coastwise ports during a trip to the United States in order to participate in the company’s training program in order to join a newly opened service branch. This individual would embark at Camden, New Jersey on July 1, 2009, ride the vessel to New Orleans, Lousiana; Freeport, Texas; and Houston, Texas before the vessel clears for foreign ports. The individual will be onboard as part of a company training program. ISSUE: Whether the subject individual is a “passenger" 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: 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 is wholly owned by citizens of the United States for purposes of engaging in the coastwise traffic; and 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. Penalty. The penalty for violating subsection (a) is $300 for each passenger transported and landed. 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. CBP Ruling HQ 101699 (November 5, 1975); see also CBP Ruling HQ 116721 (September 25, 2006). Conversely, 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). Consistent with CBP's interpretation of the term “passenger” in the above-cited June 5, 2002 notice, we have held that certain shoreside employees transported for the purpose of observing or familiarizing themselves with onboard operations are passengers. In CBP Ruling HQ H008510 (March 22, 2007) and CBP Ruling HQ H008513 (March 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 CBP Ruling HQ H028756 (May 29, 2008), citing CBP Ruling HQ H010696 (May 9, 2007) and CBP Ruling HQ H010662 (May 9, 2007) (shipping agencies’ human resources manager and ship broker’s trainee); CBP Ruling HQ H013452 (June 29, 2007) (stevedore); CBP Ruling HQ H013701 (July 10, 2007) (customer service auditors and sales representatives); CBP Ruling H018186 (October 11, 2007) (shoreside operations assistant).In the present case, you propose to transport a company trainee onboard the vessel as part of a training program. This activity does not connect the subject individual directly and substantially with the navigation, operation, or business of the vessel itself. However, you also state that the trainee will not disembark a port in the United States, but will ride the vessel foreign before disembarking. Thus, the individual will not be engaged in a coastwise voyage, even though they would be considered a “passenger within the meaning of 46 U.S.C. § 55103 and 19 CFR 4.50(b). HOLDING:The subject individual will not disembark at an U.S. coastwise point and thus will not be engaged in a coastwise voyage within the meaing of 46 U.S.C. § 55103. Sincerely, Glen E. Vereb Chief Cargo Security, Carriers and Immigration Branch