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

HQ H225797 July 13, 2012 VES-3-02:OT:RR:BSTC:CCI H225797 WRB CATEGORY: Carriers Ms. Marcia Chandler Holland America Line 300 Elliott Avenue West Seattle, WA 98119 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR 4.50(b) Dear Ms. Chandler: This letter is in response to your request, which we received on July 12, 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/S WESTERDAM (the “vessel”) from Seattle, Washington, to Juneau, Alaska. The individual would embark the vessel at Seattle on July 28, 2012, and disembark at Juneau on July 30, 2012. The individual is employed by Holland America Line as Manager, Charter Sales. The individual would be carried onboard to escort a large incentive group of 552 passengers, serving as the liaison between the group and the vessel, as the vessel’s management needs a HAL representative who is familiar with the group’s operations. The individual would meet with the Hotel Manager, Culinary Manager, and the group leader each morning to coordinate the meal times, group meetings, and tour dispatch, serving as the Holland America Line Inc., representative to assist with the group’s travel needs, and run their meeting at sea. ISSUE: Whether the subject individual is a “passenger” 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 would be carried onboard to escort a large incentive group, serving as the liaison between the group and the vessel. The individual would meet with the Hotel Manager, Culinary Manager, and the group leader each morning to coordinate the meal times, group meetings, and tour dispatch, serving as the Holland America Line Inc., representative to assist with the group’s travel needs, and run their meeting at sea. In HQ H067035 (July 2, 2009), CBP held that the cruise line’s director of media relations was a passenger within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). In HQ 116659 (May 19, 2006), a cruise line proposed transporting employees and contractors that worked in the areas of North America Sales and Marketing and International Sales and Marketing for the purpose of strategizing on how to sell, market, and enhance the overall guest experience of the vessel. CBP held that the foregoing individuals were “passengers” within the meaning of 19 CFR § 4.50(b) and the coastwise transportation of those passengers would be in violation of 19 U.S.C. § 55103. The holding in HQ 116659 was affirmed after reconsideration of the issue in HQ 116668 and has since been upheld in several rulings. See HQ H020448 (Dec. 13, 2008) (holding that sales and marketing cruise line employees and contractors conducting an “industrial show” for travel agencies were passengers); HQ H023116 (Feb. 22, 2008) (holding that sales account executive conducting sales training seminars to top producing travel agencies was a passenger); HQ H013701 (July 10, 2007) (holding that sales representatives are passengers); HQ H002925 (Nov. 8, 2006) (holding that key account representative is a passenger); H020448 (Dec. 13, 2007) (holding that individuals transported for the purpose of putting on an industrial show for travel agents were passengers). CBP’s reasoning in the holdings in the foregoing cases is that none of those activities are “directly and substantially” related to the operation or business of the vessel itself. Consistent with the thrust and tenor of the above rulings, we find that the proposed activity in this case is not directly and substantially connected with the operation, navigation, business, or ownership of the vessel. Therefore, we determine that the subject individual would be a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Accordingly, the coastwise transportation of such individual 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