Coastwise transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b); observers; shoreside operations; HQ H019524 (Apr. 4, 2008); Cust. Bull., Vol. 36, No. 23, p. 50 (June 5, 2002); Cust. Bull., Vol. 42, No. 18, p. 21 (Apr. 23, 2008).

HQ H100918 April 20, 2010 VES-3-15 OT:RR:BSTC:CCI H100918 LLB Category: Carriers Ms. Maegan Cloutier Gearbulk Inc. 3000 Bayport Drive, Suite 450 Tampa, Florida 33607 RE: Coastwise transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b); observers; shoreside operations; HQ H019524 (Apr. 4, 2008); Cust. Bull., Vol. 36, No. 23, p. 50 (June 5, 2002); Cust. Bull., Vol. 42, No. 18, p. 21 (Apr. 23, 2008). Dear Ms. Cloutier: This letter is in response to your undated correspondence which was forwarded to this office by Inchcape Shipping Services on April 9, 2010 and your electronic mail sent to his office on that same date. In your correspondence, you request "permission" for the individuals mentioned therein to travel aboard the M/V GROUSE ARROW between two United States ports. We are construing your correspondence as a request for a ruling to determine whether the coastwise laws, specifically 46 U.S.C. § 55103 and the regulations promulgated under that statute, 19 C.F.R. § 4.50(b), apply to the factual scenario you present. Our decision follows. FACTS The voyage in question involves your transportation aboard the non-coastwise-qualified M/V GROUSE ARROW (the "vessel”). You expect to embark in Morehead City, North Carolina on April 28, 2010 and disembark in Gloucester, New Jersey on or about May 2, 2010. During the voyage, the vessel will also call Baltimore, Maryland. You will be transported aboard the vessel to “observe discharge and vessel operations.” Specifically, you will be transported for the purpose of becoming “more familiar with each ports [sic] layout and operations,” “more familiar with the ship’s capabilities and design,” “to experience transits and pilotages,” and “to see the daily activities of the crew weather [sic] it be in port or on [sic] at sea.” You state that the foregoing observation will assist you in the “understanding of how things operate in order to be more efficient in the office when [you are] coordinating daily operations.” ISSUE Whether the subject individual described above is a “passenger" 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. See 33 C.F.R. § 2.22(a)(2)(2010). 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). CBP, in precise concert with the protectionist nature of 46 U.S.C. § 55103, imposed a circumscribed construction as to the meaning of the term "passenger" under the U.S. coastwise trade laws. 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 Cust. Bull., Vol. 36, No. 23, p. 50 (June 5, 2002) (emphasis added). Further, CBP has determined that the transportation of a vessel line's shoreside employees for the purpose of observing vessel operations are passengers within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. 4.50(b). See Cust. Bull., Vol. 42, No. 18, p. 21 (Apr. 23, 2008). Consistent with CBP's interpretation of the term passenger in the foregoing June 5, 2002, notice, and its application to shoreside employees pursuant to the April 23, 2008, notice, we have held that certain shoreside employees transported for the purpose of observing or familiarizing themselves with onboard operations are passengers. In HQ H019524 (Apr. 4, 2008), a vessel line proposed transporting its terminal operations managers between coastwise points “to develop better safety practices and business process” between the shipping line and the terminal and so that such managers could “understand what the vessel crew’s responsibilities are once the cargo has loaded and is in route to the next port.” In addition, the vessel line asserted that the coastwise transportation of the subject managers would “build a better relationship with [their] vessels which would in turn improve terminal efficiency and communications.” CBP held that although familiarizing terminal operations managers with vessel operations may foster the business of the shipping company, it does not connect those individuals directly and substantially with the business of the vessel itself. To the extent that the subject individuals would not have been 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 C.F.R. § 4.50(b). In addition, in HQ H008510 (Mar. 22, 2007) and HQ H008513 (Mar. 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. Similarly, in the present case, you propose to transit with the vessel for the purpose of becoming “more familiar with each ports [sic] layout and operations,” “more familiar with the ship’s capabilities and design,” “to experience transits and pilotages,” and “to see the daily activities of the crew weather [sic] it be in port or on [sic] at sea.” You state that the foregoing observation will assist you in “understanding of how things operate in order to be more efficient in the office when [you are] coordinating daily operations.” Although familiarizing yourself with shipboard operations as described above may foster the business of the vessel company, it does not connect this individual directly and substantially with the business of the vessel itself. To the extent that you will not be engaging 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, you would be considered a passenger within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). HOLDING The subject individual is a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Therefore, the coastwise transportation of the individual would be in violation of 46 U.S.C. § 55103. Sincerely, Glen E. Vereb, Chief Cargo Security, Carriers and Immigration Branch