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

HQ H238173 February 14, 2013 VES-3-02-OT:RR:BSTC:CCR HQ H238173 DAC CATEGORY: Carriers Lillian L. Hernandez 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 Ms. Hernandez: This letter is in response to your correspondence of February 11, 2013, with respect to the coastwise transportation of two individuals. Our ruling is set forth below. FACTS: You ask whether the transportation of two individuals on the non-coastwise-qualified MS JEWEL OF THE SEAS (the “vessel”), from Key West, Florida, to Tampa, Florida, from on or about February 22, 2013, through on or about February 25, 2013, would be a violation of 46 U.S.C. § 55103. The individuals would be transported for the purpose of conducting auctions to raise money for cancer, holding seminars and other activities related to football and raising money for cancer on the subject vessel while the vessel is under way. 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- (1) is wholly owned by citizens of the United States for purposes of engaging in the 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), 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 individuals will be transported on the vessel for the purpose of conducting auctions to raise money for cancer, holding seminars and other activities related to football and raising money for cancer on the subject vessel while the vessel is under way. 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.) Under 46 U.S.C. § 55103, a “passenger” is any person carried aboard a vessel “who is not connected with the operation of the vessel, her navigation, ownership, or business.” See also 19 C.F.R. § 4.50(b). In this regard, U.S. Customs and Border Protection (“CBP”) provides a strict interpretation of “passenger” defining the term as persons transported on a vessel unless they are “directly and substantially” connected with the operation, navigation, ownership or business of that vessel itself. See Customs Bulletin of June 5, 2002, Vol. 36, No. 23, at pp. 50. Therefore, since the activities described above are not “directly and substantially” connected with the operation, navigation, ownership or business of the vessel itself, the subject individuals would be considered “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Consequently, the coastwise transportation of the subject individuals 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 Restricted Merchandise Branch Office of International Trade, Regulations & Rulings U.S. Customs and Border Protection