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

HQ H085435 November 24, 2009 VES-3-02-RR:BSTC:CCI H085435 GOB CATEGORY: Carriers Dave Morgan Norton Lilly International 6001 Chatham Center Drive, Suite 330 Savannah, GA 31405 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR § 4.50(b) Dear Mr. Morgan: This letter is in response to your correspondence of November 23, 2009, with respect to the coastwise transportation of two individuals. Our ruling is set forth below. FACTS: You ask whether two individuals may be transported on the non-coastwise-qualified ATLANTIC DIANA (the “vessel”), from Savannah, Georgia to Philadelphia, Pennsylvania, from December 4, 2009 through December 7, 2009. The individuals, new employees of the charterer of the vessel, are planners who engage in planning how cargo, including break bulk cargo, will fit on a vessel. The charterer of the vessel proposes that they travel on the vessel so as to better understand how they will plan the location of cargo. 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 (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. 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 better understanding how they will plan the location of cargo on the vessel. CBP, in concert with the protectionist nature of the coastwise laws, has imposed a strict construction as to the meaning of the term "passenger" under 46 U.S.C. § 55103. 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 Customs Bulletin, Vol. 36, No. 23, p. 50 (June 5, 2002). Consistent with CBP's interpretation of the term “passenger” as articulated in the aforementioned Customs Bulletin notice and in rulings subsequent to the notice, we have held that certain shoreside employees transported on a vessel for the purpose of observing or familiarizing themselves with onboard operations are “passengers.” In HQ H018186, dated October 11, 2007, CBP held that a shoreside operations assistant, who was to be transported on a vessel to “gain a firm understanding of stowage and planning, planning system, navigational considerations, hazardous materials, and a brief overview of vessel dynamics,” was a “passenger.” In HQ H008510, dated March 22, 2007, and HQ H008513, dated March 21, 2007, CBP held that trainees in a vessel familiarization tour, who were to be transported for the purpose of observing what goes on during a vessel’s voyage, were “passengers.” In HQ H010696, dated May 9, 2007, CBP held that a regional human resources manager, who was to be transported for the purpose of observing shipboard operations, was a “passenger.” In HQ H010662, dated May 9, 2007, CBP held that a ship broker trainee, who was to be transported on a vessel for the purpose of learning shipboard operations, was a “passenger.” In HQ H013452, dated June 29, 2007, CBP held that a stevedore, who was to be transported on the vessel for training, was a “passenger.” In the present case, the charterer of the vessel proposes to transport individuals for the purpose of better understanding how they will plan the location of cargo on the vessel. Although familiarizing the cargo planners with the vessel may foster the business of the shipping company, it does not connect these individuals directly and substantially with the business, operation, navigation, or ownership 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, 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 CFR § 4.50(b). We find that the proposed activity in this case is not directly and substantially connected with the operation, navigation, ownership or business of the vessel. 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 such individuals would be in violation of 46 U.S.C. § 55103. HOLDING: The subject individuals 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