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

HQ H210675 March 23, 2012 VES-3-02:OT:RR:BSTC:CCI H210675 WRB CATEGORY: Carriers Mr. Andrew Jung S5 / Norton Lilly International 5080 McLester Street Berth 88 Control Bldg Elizabeth, N.J. 07207 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR 4.50(b) Dear Mr. Jung: This letter is in response to your request, which we received on March 23, 2012, with respect to the coastwise transportation of an individual. Our ruling is set forth below. FACTS: You ask whether the individual may be transported on the non-coastwise qualified M/V PRESIDENT ADAMS (the “vessel”). The individual would be transported from New York, New York, embarking on March 27, 2012, to Charleston, South Carolina, disembarking on March 30, 2012. The individual will be onboard the vessel for the purpose of “vessel familiarization.” 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, you state that the subject individual will be transported on the vessel for the purpose of “vessel familiarization.” In CBP Ruling HQ H008510, dated March 22, 2007, and CBP Ruling HQ H008513, dated March 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, dated April 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. dated July 10, 2007, holding that customer service auditors and sales representatives transported to familiarize themselves with shipboard operations were passengers; CBP Ruling HQ H013452, dated 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, dated May 9, 2007, and CBP Ruling HQ H010662, dated 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 an individual so that he can engage in “vessel familiarization.” Although familiarizing an individual with vessel operations may foster the business of the line, it does not connect the individual directly and substantially with the operation, navigation, or business of the vessel itself. Thus, to the extent that the subject individual 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 individual would be considered a passenger 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 individual is a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 CFR 4.50(b). Accordingly, the coastwise transportation of the individual in question would be in violation of 46 U.S.C. § 55103. HOLDING: The subject individual is a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 CFR 4.50(b). Therefore, the coastwise transportation of such individual 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