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

HQ H174838 July 14, 2011 VES-3-02-OT:RR:BSTC:CCI H174838 LLB CATEGORY: Carriers Mr. Charitos Charalampolos Danaos Shipping Atki Kondyli 14 GR- 185 45 Piraeus Greece RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b) Dear Mr. Charalampolos: This letter is in response to your correspondence of July 13, 2011, in which you inquire about the coastwise transportation of the individuals mentioned therein aboard the M/V MESSOLOGI. Our decision follows. FACTS: The voyages in question involve the transportation of two individuals aboard the non-coastwise-qualified M/V MESSOLOGI (the “vessel”). One individual will embark in New York, New York on or about June 17, 2011, will be transported on the vessel to several interim ports including Norfolk, Virginia, and return to New York where he will disembark the vessel on or about July 27, 2011. The second individual will also embark in New York on or about June 17, 2011 and will disembark in Norfolk on July 25, 2011. The individuals will perform an ISM (International Safety Management) and an International Ship and Port Facility Security Code (ISPS) inspection. 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 trade; and (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. Section 4.50 (b) of the Customs and Border Protection (“CBP”) Regulations 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. In the present case, you state that the subject individuals will be transported on the subject vessels for the purpose of performing various vessel audits and inspections as described in the FACTS section above. 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 onboard to contribute to the accomplishment of the operation or navigation of the vessel during the voyage or are onboard because of a necessary vessel ownership or business interest during the voyage. See HQ 101699 (Nov. 5, 1975); see also HQ 116721 (Sept. 25, 2006) quoting HQ 101699. Furthermore, the shipboard activities engaged in by such aforementioned individuals while traveling on a non-coastwise-qualified vessel between coastwise ports must be “directly and substantially” related to the operation, navigation, ownership, or business of the vessel itself in order for such individuals to not be considered as passengers under these provisions of law.  In the present case, we find that the proposed activities described in your request would be directly and substantially connected with the operation of the vessel and we therefore determine that the subject individuals would not be considered “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b) for the subject voyage. Accordingly, the coastwise transportation of the subject individuals would not be in violation of 46 U.S.C. § 55103. HOLDING: The individuals described in the FACTS section 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 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