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

HQ H101796 June 1, 2010 VES-3-02-OT:RR:BSTC:CCI H101796 LLB CATEGORY: Carriers Mr. LeVar O. Kennings Norwegian Cruise Line 7565 Corporate Center Drive Miami, Florida 33126 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b) Dear Mr. Kennings: This letter is in response to your correspondence of April 16, and May 5, 2010, in which you inquire about the coastwise transportation of the 57 individuals mentioned therein aboard the M/S NORWEGIAN EPIC. Our decision follows. FACTS The voyage in question involves the transportation of the subject individuals, as described below, aboard the non-coastwise-qualified M/S NORWEGIAN EPIC (the “vessel”) from New York, New York to Miami, Florida. The individuals are expected to embark in New York on July 5, 2010 and disembark in Miami on July 7, 2010. The general purpose stated for the transportation of the individuals is to prepare the vessel for the deployment of the M/S NORWEGIAN EPIC. The individuals listed in your correspondence that will be transported during the subject voyage are as follows. Fifty-Three of the individuals work in the Business Development, Industry Relations, Online Strategies, Industry Operations, Trade Programs, and International Business Development divisions of Norwegian Cruise Line (NCL). These individuals will be conducting quality assurance evaluations in the hotel, food and beverage, and restaurant departments of the vessel. The evaluations will be based on industry standards, NCL’s competitor’s standards, and NCL’s service standards. Once the audit is over, a report will be prepared by the Business Development Division’s Executive Assistant, another individual that will be transported aboard the vessel, and a determination will be made whether adjustments need to be made in the foregoing service areas before the vessel’s first revenue voyage. Another individual will meet the crew to discuss the crew’s pension plans, work schedules, benefits, and bar hours. NCL’s Manager of Logistics will audit how the crew handles and accounts for cargo loaded on the vessel. The Director of Security and Surveillance will prepare the vessel for its International Safety Management (ISM) Audit. 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. 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). With regard to 53 individuals, you state that they will be conducting quality assurance evaluations in the hotel, food and beverage, and restaurant departments of the vessel. Another individual will meet the crew to discuss the crew’s pension plans, work schedules, benefits, and bar hours. NCL’s Manager of Logistics will audit how the crew handles and accounts for cargo loaded on the vessel. The Director of Security and Surveillance will prepare the vessel for its ISM Audit. 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 C.F.R. § 4.50(b), if they are required to be on board to contribute to the accomplishment of the operation or navigation 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, to the extent that these 57 individuals would 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 itself, as would be the case under the facts herein submitted, such individuals would not be considered passengers. Accordingly, the coastwise transportation of these 57 individuals would not be in violation of 46 U.S.C. § 55103. HOLDING The 57 individuals as described above are not “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Therefore, the coastwise transportation of those 57 individuals is not in violation of 46 U.S.C. § 55103. Sincerely, Glen E. Vereb Chief Cargo Security, Carriers and Immigration Branch