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

HQ H124099 September 23, 2010 VES-3-02-RR:BSTC:CCI H124099 WRB CATEGORY: Carriers Mr. Matthew Cress Operations Coordinator S5 / Norton Lilly International 350 Frank H. Ogawa Plaza Suite 600 Oakland, CA 94612 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR § 4.50(b) Dear Mr. Cress: This letter is in response to your correspondence of September 21, 2010, with respect to the coastwise transportation of two individuals. Our ruling is set forth below. FACTS: You ask whether two individuals may be transported on the non-coastwise-qualified M/V APL HOLLAND (the “vessel”), from Oakland, California to Los Angeles, California, from September 28, 2010 through September 29, 2010, for the purpose of preparing a magazine article for “Pacific Shipper Magazine.” One individual is a representative of “Pacific Shipper Magazine,” the other a representative of the vessel owners’ management team. ISSUE: Whether the subject individuals are “passengers” 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 individuals will be transported on the vessel for the purpose of preparing a magazine article for “Pacific Shipper Magazine.” One individual is a representative of “Pacific Shipper Magazine,” the other a representative of the vessel owners’ management team. 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, navigation, or business of the vessel during the voyage or are on board because of a necessary vessel ownership 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 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, business, or ownership of the vessel itself, such individuals would not be considered to be passengers (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 H067035 (July 2, 2009), CBP held that the cruise line’s director of media relations was a passenger within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). In HQ 116659 (May 19, 2006), a cruise line proposed transporting employees and contractors that worked in the areas of North America Sales and Marketing and International Sales and Marketing for the purpose of strategizing on how to sell, market, and enhance the overall guest experience of the vessel. CBP held that the foregoing individuals were “passengers” within the meaning of 19 CFR § 4.50(b) and the coastwise transportation of those passengers would be in violation of 19 U.S.C. § 55103. The holding in HQ 116659 was affirmed after reconsideration of the issue in HQ 116668 and has since been upheld in several rulings. See HQ H020448 (Dec. 13, 2008) (holding that sales and marketing cruise line employees and contractors conducting an “industrial show” for travel agencies were passengers); HQ H023116 (Feb. 22, 2008) (holding that sales account executive conducting sales training seminars to top producing travel agencies was a passenger); HQ H013701 (July 10, 2007) (holding that sales representatives are passengers); HQ H002925 (Nov. 8, 2006) (holding that key account representative is a passenger). In addition, we have historically held that individuals, cruise line employees or contractors, transported solely for the promotional purpose of the cruise line, are passengers within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). See Bureau Letter dated July 3, 1957, MA 212 (movie making); HQ 109695 (Nov. 3, 1988) (camera crew carried aboard to film a promotional video); HQ 116668 (camera crew and company employees engaged in promotional filming for cruise line); HQ H008038 (Mar. 9, 2007) (holding that two marketing employees of the cruise line and independent contractors, that were shooting, producing, and performing in a promotional video cruise line were passengers); H020448 (Dec. 13, 2007) (holding that individuals transported for the purpose of putting on an industrial show for travel agents were passengers). CBP’s reasoning in the holdings in the foregoing cases is that none of those activities are “directly and substantially” related to the operation or business of the vessel itself. Consistent with the thrust and tenor of the above rulings, we find that the proposed activity in this case is not directly and substantially connected with the operation, navigation, business, 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 individuals would be “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, George Frederick McCray Supervisory Attorney-Advisor/Chief Cargo Security, Carriers and Immigration Branch Office of International Trade, Regulations & Rulings U.S. Customs and Border Protection