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

HQ H078776 October 5, 2009 VES-3-02-RR:BSTC:CCI H078776 GOB CATEGORY: Carriers Lionel D’Souza Operations Manager Norton-Lilly International 952 Houston Northcutt Blvd. Mt. Pleasant, SC 29464 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR § 4.50(b) Dear Mr. D’Souza: This letter is in response to your correspondence of October 3, 2009, with respect to the coastwise transportation of certain individuals. Our ruling is set forth below. FACTS: You ask whether two travel consultants may be transported on the non-coastwise-qualified M/V CLELIA II (the “vessel”), from Charleston, South Carolina to West Palm Beach, Florida from October 6, 2009 through October 9, 2009 for the purpose of discussing with the captain and planning next year’s cruise operations on the Great Lakes. ISSUE: Whether the subject individuals are “passengers” 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: (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- 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. (b) Penalty. The penalty for violating subsection (a) is $300 for each passenger transported and landed. Section 4.50(b), Customs and Border Protection (“CBP”) Regulations (19 CFR § 4.50(b)) provides as follows: A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business. You state that the subject individuals will be transported on the vessel for the purpose of discussing with the captain and planning next year’s cruise operations on the Great Lakes. In this context, and 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 business of the vessel during the voyage or are on board because of a necessary vessel ownership or business interest during the voyage. HQ 101699, of November 5, 1975; see also HQ 116721, of September 25, 2006, quoting HQ 101699.  Thus, in the present case, to the extent that the individuals would be engaged in any shipboard activities while traveling on the non-coastwise-qualified vessel between coastwise ports, that would be “directly and substantially” related to the operation or business of the vessel itself, such individuals would not be considered to be passengers (see HQ 116721, supra; and see HQ 116659, of May 19, 2006, referencing the “direct and substantial” test). See also, e.g., Customs telex 104712, of July 21, 1980, finding that repairmen were not passengers when carried aboard a foreign vessel between U.S. ports “for [the] purpose of repairing vessel en route between such ports." CBP has previously ruled that travel agents are “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). See, for example HQ H039535 dated October 23, 2008, HQ H002925 dated November 8, 2006, HQ 112385 dated July 22, 1992, HQ 112601 dated June 17, 1993, and the numerous rulings cited therein. In HQ H002925, we stated: . . . as concluded in the April 3, 1958, Bureau Letter, supra, “the fact that the involved transportation of the society members would better educate them for the promotion of foreign tourism would not connect them with the vessel’s operation, navigation, ownership, or business to such an extent as to justify an administrative ruling that the members were not passengers for the purposes of section 289." Accord, HQ 108184, of March 19, 1986 (“while travel agents may be tangentially connected with the business of a vessel, in that they may encourage future travel on that vessel, they are not directly enough connected with the business of the vessel to be classified as other than passengers”); and Bureau Letter of August 29, 1960 (MA 217.1) (finding that newspapermen or cruise agents who travel with a vessel to better equip them for future cruise passage sales promotion were passengers, notwithstanding the assertion that “such sales are basic to the vessel’s business;” such promotional activity was held to be “only remotely or indirectly connected with the operation or business of the vessel [itself] rather than direct and immediate as is contemplated by the regulations”). Based on the above authorities and extensive precedent, we find that the proposed activity in this case falls within the scope of previous CBP rulings wherein we held individuals to be passengers. Therefore, we determine that the subject individuals would be “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Accordingly, the coastwise transportation of the travel consultants would be in violation of 46 U.S.C. § 55103. HOLDING: The subject travel consultants would be “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Therefore, the coastwise transportation of such individuals would be in violation of 46 U.S.C. § 55103. Sincerely, Glen E. Vereb Chief Cargo Security, Carriers and Immigration Branch