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

HQ H206356 March 22, 2012 VES-3-02-RR:BSTC:CCI H206356 WRB CATEGORY: Carriers Capt. Howard A. Newhoff Royal Caribbean Cruises, Ltd. 1050 Caribbean Way Miami, FL 33132-2096 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b) Dear Capt. Newhoff: This letter is in response to your correspondence of February 27, 2012, with respect to the coastwise transportation of approximately six hundred (600) individuals. Our ruling is set forth below. FACTS: Royal Caribbean Cruises, Ltd., will be placing the M/V MARINER OF THE SEAS (the “vessel”), a non-coastwise-qualified vessel, out of service and undertaking a dry-docking for scheduled hull repairs and topside renovations. In advance thereof, approximately 600 persons, characterized as contractors, would embark the vessel in Galveston, Texas, on April 22, 2012, along with their tools and equipment, and they would be transported aboard the vessel to Miami, Florida, where all of the contractors would disembark the vessel upon completion of the dry-dock work, on May 1, 2012. It is stated that during the course of the above-described transportation, these contractors would be actively engaged in performing work/services aboard the vessel in furtherance of the scheduled repairs and renovations which include: machinery inspection; machinery surveying; hull and structural inspections; bridge and navigation equipment upgrades; lighting upgrades; fire detection and cabling upgrades; closed circuit television (CCTV) security system installation; communications satellite equipment conversions; galley upgrades; public room carpeting and re-upholstery; signage upgrades; decking work; pool deck servicing; machinery, hull, and incinerator work; and audio/video upgrades. In addition, supervisors, managers, facilities consultants and logistical support personnel will be aboard the vessel to coordinate the foregoing activities. 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 trade; 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, navigation, ownership, or business of the vessel. In the present case, the subject individuals will be transported aboard the vessel for the purpose of preparing the vessel for dry-docking, which includes machinery inspection; machinery surveying; hull and structural inspections; bridge and navigation equipment upgrades; lighting upgrades; fire detection and cabling upgrades; closed circuit television (CCTV) security system installation; communications satellite equipment conversions; galley upgrades; public room carpeting and re-upholstery; signage upgrades; decking work; pool deck servicing; machinery, hull, and incinerator work; and audio/video upgrades. 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 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 [November 5, 1975]; see also HQ 116721 [September 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. (See HQ 116721, supra; and see HQ 116659 [May 19, 2006], referencing the “direct and substantial” test.) 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 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 is not 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