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

HQ H067900 July 23, 2009 VES-3-02-OT:RR:BSTC:CCI H067900 LLB CATEGORY: Carriers Ms. Lois Hoffman Holland America Line 300 Elliott Avenue West Seattle, Washington 98119 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b) Dear Ms. Hoffman: This letter is in response to your correspondence of July 7, 2009, in which you inquire about the coastwise transportation of the four individuals mentioned therein aboard M/S ZAANDAM. Our decision follows. FACTS The voyage in question involves the coastwise transportation of the subject individuals aboard the non-coastwise-qualified M/S ZAANDAM (the “vessel”). The subject individuals will embark in Seattle, Washington on August 14, 2009, and disembark the vessel in Juneau, Alaska on August 30, 2009. The subject individuals are "traveling corporate trainers" for Holland America Line and will be training management and crew on the Holland America Line Mariner Loyalty Program. The program is similar to an airline mileage incentive program. 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). Although transporting the corporate trainers aboard the vessel fosters the business interests of the cruise line, it does not connect the corporate trainers directly and substantially with 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 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