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

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H255499 July 28, 2014 VES-3-02-OT:RR:BSTC:CCR HQ H255499 WRB CATEGORY: Carriers Mr. Ziming Zhang MOL (America), Inc. 700 E. Butterfield Rd. Suite 150 Lombard, IL 60148 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b) Dear Mr. Zhang: This letter is in response to your correspondence of July 21, 2014, with respect to the coastwise transportation of one individual. Our ruling is set forth below. FACTS: You ask whether one individual may be transported on the non-coastwise-qualified M/V MOL MANEUVER (the “vessel”). The subject individual will embark the vessel at Norfolk, Virginia, on or about July 31, 2014, and disembark at Charleston, South Carolina, on or about August 5, 2014. The individual will be carried onboard for the purpose of participating in a managerial development program, to learn all aspects of the organization, including traveling on a vessel to gain a better understanding of the organization’s operations, and shadowing crew members on day-to-day activities and participating in various training activities, while the vessel is underway. 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- (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 individual will be carried onboard for the purpose of participating in a managerial development program, to learn all aspects of the organization, including traveling on a vessel to gain a better understanding of the organization’s operations, and shadowing crew members on day-to-day activities and participating in various training activities, while the vessel is underway. In HQ H008510 (Mar. 22, 2007), and 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 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; HQ H013701 (July 10, 2007), holding that customer service auditors and sales representatives transported to familiarize themselves with shipboard operations were passengers; 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; HQ H010696 (May 9, 2007), and 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 an individual so that he can engage in “traveling on a vessel to gain a better understanding of the organization’s operations, and shadowing crew members on day-to-day activities and participating in various training activities.” Although familiarizing an individual with vessel operations may foster the business of the shipping 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, Lisa L. Burley Supervisory Attorney-Advisor/Chief Cargo Security, Carriers and Restricted Merchandise Branch Office of International Trade, Regulations & Rulings U.S. Customs and Border Protection