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

HQ H091975 January 25, 2010 VES-3-02-RR:BSTC:CCI H091975 CATEGORY: Carriers Tracy Jessop Cunard Line Carnival House 100 Harbour Parade Southhampton, United Kingdom SO15 1ST RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR § 4.50(b) Dear Ms. Jessop: This letter is in response to your correspondence of January 22, 2010, with respect to the coastwise transportation of an individual. Our ruling is set forth below. FACTS: You ask whether an individual, a corporate trainer, may be transported on the non-coastwise-qualified QUEEN VICTORIA (the “vessel”), from San Francisco, California to Honolulu, Hawaii, from January 27, 2010 through February 2, 2010, for the purpose of implementing a new management 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: (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 individual will be transported on the vessel for the purpose of implementing a new management training program. 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 individual 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 individual would not be considered to be a passenger (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." In HQ H067900, dated July 23, 2009, we determined that four “traveling corporate trainers” were passengers within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). In that case, although the corporate trainers were fostering the business interests of the cruise line, they were not sufficiently connected with the business of the vessel itself. We find that the proposed activity in this case is not directly and substantially connected with the operation, business, navigation, or ownership 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 individual would be a “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