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

HQ H147875 February 11, 2011 VES-3-02-OT-RR:BSTC:CCI H147875 GOB CATEGORY: Carriers David Kelly Prestige Cruise Holdings 8300 NW 3rd Street, Suite 308 Miami, FL 33122 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR § 4.50(b) Dear Mr. Kelly: This letter is in response to your correspondence of February 9, 2011 with respect to the coastwise transportation of certain individuals. Our ruling is set forth below. FACTS: You ask whether two individuals, the chairman of Prestige Cruise Holdings and his wife, may be transported on the non-coastwise-qualified M/S MARINA (the “vessel”), from Los Angeles, California to San Francisco, California from February 24, 2011 through February 25, 2011. These individuals will be participating in celebrations relating to the christening of the vessel. 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. In the present case, you state that the chairman and his wife will be participating in celebrations relating to the christening of the vessel. The definition of “passenger” in 19 CFR § 4.50(b) has its origin in the former Bureau of Navigation General Letter No. 117 of May 20, 1916, which interpreted the meaning of the term under the steamboat inspection laws. General Letter No. 117 was affirmatively referenced and reviewed in the proposed notice concerning the definition of “passenger” published in the Customs Bulletin on February 20, 2002 (Vol. 36, No. 8), which led to the final notice published in the June 5, 2002, Customs Bulletin (Vol. 36, No. 23). Specifically, it established that the officers of the company owning a vessel, and, if a corporate owner, the members of its board of directors, would, by virtue of their positions as such, be sufficiently connected with the ownership or business of that vessel if they were on board the vessel acting in their official capacity so as not to be considered passengers. (See also, for example, HQ H002925 dated November 8, 2006, H003146 dated November 15, 2006, and HQ H003597 dated November 29, 2006.) Therefore, any director of the company owning the subject vessel in this case would not be a passenger when carried aboard that vessel. The same treatment is accorded to spouses of corporate officers and directors of the company which owns the vessel. See General Letter No. 117 and HQ H069521, dated September 14, 2009. Therefore, we determine that the subject individuals are not “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Accordingly, the coastwise transportation of the individuals in question would not be 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 CFR § 4.50(b). Therefore, the coastwise transportation of such individuals would not 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