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 H288110 July 14, 2017 VES-3- 02 OT:RR:BSTC:CCR HQ H288110 JER CATEGORY: Carriers Julie Senseman Duty Free Distributors, Inc. 851 Broken Sound Parkway, NW, Suite 151 Boca Raton, FL 33487 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b). Dear Ms. Senseman: This is in response to your correspondence of July 11, 2017, in which you inquire about the coastwise transportation of the one individual mentioned therein aboard the M/V NIEUW AMSTERDAM. Our decision follows. FACTS The voyage in question involves the transportation of the subject individual aboard the non-coastwise-qualified M/V NIEUW AMSTERDAM (“the vessel”). The individual will embark the vessel in Juneau, Alaska on or about August 14, 2017 and will disembark in Ketchikan, Alaska on or about August 17, 2017. The individual will board the vessel to set-up an event which will promote and sale certain limited edition watches (during the event). The individual will also provide training to the gift shop staff on how to sell the watches. ISSUE Whether the individual described in the FACTS section is a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 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 which provides: (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 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) of the Customs and Border Protection (“CBP”) Regulations provide: A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of the vessel, her navigation, ownership, or business. In the present case, the individual will board the vessel to set-up an event which will promote and sale certain limited edition watches (during the event). The individual will also provide training to the gift shop staff on how to sell the watches. 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 C.F.R. § 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. HQ 101699 (Nov. 5, 1975); see HQ 116721 (Sept. 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.  In the present case, we conclude that the individual is a passenger within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). In HQ H016910 (September 12, 2007), CBP held that brewery executives transported aboard a vessel to promote its products were passengers within the meaning of 46 U.S.C. § 55103 insofar as the representatives were not “directly and substantially”  connected with the operation, navigation, ownership or business of the vessel itself. CBP reasoned that although transporting the brewery representatives aboard the vessel fostered the business interests of the brewery, it did not connect the representatives directly and immediately with the business of the vessel itself. See also, HQ H059215 See also, HQ H059215 (May 28, 2009) (holding that sales representatives that boarded the vessel to promote and sell merchandise in the vessel’s boutique were not connected to the operation, navigation, or business of the vessel). Based upon the facts of this case, the proposed activities of the individual would foster the business and sales of the respective watch retailer rather than the operation, navigation or business of the vessel itself. To the extent that the subject individual would not be engaged in any shipboard activities while traveling on the foreign vessel between coastwise ports, that would be “directly and substantially” connected to the operation, navigation, ownership, or business of the vessel, we therefore determine that the subject individual is a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Accordingly, the coastwise transportation of the individual in question would be in violation of 46 U.S.C. § 55103. HOLDING The individual described in the FACTS section above is a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Therefore, the coastwise transportation of such individual would be in violation of 46 U.S.C. § 55103. Sincerely, Lisa L. Burley Chief/Supervisory Attorney-Advisor Cargo Security, Carriers and Restricted Merchandise Branch Office of Trade, Regulations and Rulings