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

HQ H113276 July 2, 2010 VES-3-02-OT:RR:BSTC:CCI H113276 WRB CATEGORY: Carriers Mr. Levar O. Kennings Manager, Port Operations Norwegian Cruise Line 7665 Corporate 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 dated July 1, 2010, in which you inquire about the coastwise transportation of the 74 individuals mentioned therein aboard the M/S NORWEGIAN EPIC. Our decision follows. FACTS The voyages in question involve the transportation of the 74 subject individuals aboard the non-coastwise-qualified M/S NORWEGIAN EPIC (the “vessel”). The 74 individuals will embark in New York, New York on July 5, 2010, and disembark in Miami, Florida on or about July 7, 2010. Specifically, 52 of the 74 individuals work as contractors for the shipyard and will be sailing onboard to complete work not completed in the shipyard. These 51 individuals will work on uncompleted cabins, complete unfinished electrical work, and install cosmetic fixtures. Further, seven individuals will be onboard to work on the vessel’s information technology (IT) infrastructure. As a newbuild, the vessel is experiencing IT technical difficulties and these individuals will be onboard to troubleshoot and repair the IT infrastructure. Five individuals will be carried onboard to reprogram and repair the vessel’s telephone system; two individuals will be aboard to perform warranty repairs to the engine compartments; two individuals will be carried onboard to repair the autopilot system; two individuals will be aboard to repair the Public Address (PA) and master clock system; two individuals will be carried onboard to repair the vessel’s door lock system; one individual will be aboard to install gaming software; and one individual will be carried aboard to work in the hotel, food and beverage, and restaurant departments onboard to audit the quality of product produced according to brand standards. 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)(2008). 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). You state that the 74 subject individuals would be transported on the vessel for various purposes; including working on uncompleted cabins, completing unfinished electrical work, and installing cosmetic fixtures; troubleshooting and repairing the IT infrastructure; reprogramming and repairing the vessel’s telephone system; performing warranty repairs to the engine compartments; repairing the autopilot system; repairing the Public Address (PA) and master clock system; repairing the vessel’s door lock system; installing gaming software; and, working in the hotel, food and beverage, and restaurant departments to audit the quality of product produced according to brand standards, as described in the FACTS section above. 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); HQ 116721 (Sept. 25, 2006) quoting HQ 101699; see H041836 (Oct. 17, 2008), H010659 (May 4, 2007), and HQ H035184 (Aug. 11, 2008) (holding that individual transported for the purposes of installing computer software/hardware and training the crew there on was not a passenger within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). In the present case, to the extent the 74 individuals 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 navigation, operation or business of the vessel itself, as would be the case under the facts herein submitted, such individuals would not be considered to be passengers (see HQ 116721, supra; and CBP Ruling HQ 116659 (May 19, 2006), referencing the “direct and substantial” test). We find that the 74 individuals are not “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Accordingly, the coastwise transportation of these 74 individuals is not in violation of 46 U.S.C. § 55103. HOLDING The subject individuals 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 such individuals is not in violation of 46 U.S.C. § 55103. Sincerely, Glen E. Vereb Chief Cargo Security, Carriers and Immigration Branch