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

HQ H188495 October 18, 2011 VES-3-02:RR:BSTC:CCI H188495 ALS CATEGORY: Carriers Mr. Jim Taylor T. Parker Host 2200 Broening Highway, Suite 102 Baltimore, Maryland 21224 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR 4.50(b) Dear Mr. Taylor: This letter is in response to your request of October 12, 2011, with respect to the coastwise transportation of three individuals. Our ruling is set forth below. FACTS: You ask whether the individuals may be transported on the non-coastwise qualified M/V LIBERTY PROMISE (the "vessel"). The individuals will be transported from Baltimore, Maryland, embarking on or about October 17, 2011, to Wilmington, Delaware, disembarking on October 18, 2011. The individuals will be onboard the vessel for the purpose of purpose of obtaining “familiarization with vessel operating protocols and procedures for handling their cargo which moves with this shipping line.” 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: 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. 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 subject individuals will be transported on the vessel for the purpose of obtaining “familiarization with vessel operating protocols and procedures for handling their cargo which moves with this shipping line.” In CBP Ruling HQ H008510 (Mar. 22, 2007) and CBP Ruling HQ H008513 (Mar. 23, 2007), we held that shipping agency trainees transported aboard a vessel "to observ[e] daily life on a vessel and gain better insight about what their colleagues [that] work on a vessel actually do" or "observe what goes on during a vessel’s voyage" were passengers within the meaning of 46 U.S.C. § 55103 insofar as the trainees were not "directly and substantially" connected with the operation, navigation, ownership or business of the vessel itself. See also CBP Ruling HQ H026209 (Apr. 22, 2008) (holding that shipping agency’s claims risk manager transported to "observe the crew preparation for port arrival and pre-cargo operation procedures, observing those actions from the vessel's view" was a passenger); CBP Ruling HQ H013701 (July 10, 2007) (holding that customer service auditors and sales representatives transported to familiarize themselves with shipboard operations were passengers); CBP Ruling HQ H013452 (June 29, 2007) (holding that transporting a stevedore for training purposes was not "directly and substantially" related to the operation or business of the vessel itself); CBP Ruling HQ H010696 (May 9, 2007) and CBP Ruling HQ H010662 (May 9, 2007) (holding that shipping agency's human resources manager and ship broker’s trainee, respectively, transported coastwise "to observe shipboard operations" were passengers). Similarly, in the present case, you propose to transport individuals so that they can “obtain familiarization with vessel operating protocols and procedures for handling their cargo which moves with this shipping line.” Although familiarizing individuals with vessel operations may foster the business of the cruise line, it does not connect the individuals directly and substantially with the operation, navigation, or business of the vessel itself. Thus, to the extent that the subject individuals will not be engaged in any shipboard activities while traveling on the foreign vessel between coastwise ports that would be "directly and substantially" related to the operation, navigation, or business of the vessel itself, such individuals would be considered passengers within the meaning of 46 U.S.C. § 55103 and 19 CFR 4.50(b). In the present case, we find that the proposed activities described in your request would not be directly and substantially connected with the operation, navigation, or business of the vessel and we therefore determine that the subject individuals are “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 be in violation of 46 U.S.C. § 55103. HOLDING: The subject individuals are “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR 4.50(b). Therefore, the coastwise transportation of such individuals is 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