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

HQ H110177 June 16, 2010 VES-3-02-RR:BSTC:CCI H110177 WRB CATEGORY: Carriers Mr. Scott Wadley S5 / Norton Lilly International 6001 Chatham Centre Drive Suite 330 Savannah, GA 31405 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b) Dear Mr. Wadley: This letter is in response to your correspondence of June 15, 2010, with respect to the coastwise transportation of an individual. Our ruling is set forth below. FACTS: You ask whether an individual may be transported on the non-coastwise-qualified M/V STADT MUNCHEN (the “vessel”), from Savannah, Georgia, to Miami, Florida, from June 18, 2010 through June 20, 2010. The individual would be transported for the purpose of conducting a pre-purchase survey of the vessel on behalf of the potential buyers, including an inspection of vessel ballast tanks, structures, machinery, equipment, and navigation system, while the vessel is underway. 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 the subject individual would be transported for the purpose of conducting a pre-purchase survey of the vessel on behalf of the potential buyers, including an inspection of vessel ballast tanks, structures, machinery, equipment, and navigation system, while the vessel is underway. 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 navigation of the vessel during the voyage or are on board because of a necessary vessel ownership or business interest during the voyage. See 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). We find that the proposed activity in this case is directly and substantially connected with the operation, navigation and business of the vessel. Therefore, we determine that the subject individual is not a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Accordingly, the coastwise transportation of such an individual is not in violation of 46 U.S.C. § 55103. HOLDING: The subject individual is not a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Therefore, the coastwise transportation of such an individual is not in violation of 46 U.S.C. § 55103. Sincerely, Glen E. Vereb Chief Cargo Security, Carriers and Immigration Branch