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HQ 112601


June 17, 1993

VES-3-07-CO:R:IT:C 112601 LLB

CATEGORY: CARRIER

Mr. Eliot J. Halperin
Graham and James
2000 M. Street, N.W.
Suite 700
Washington, D.C. 20036-3113

RE: Coastwise trade; Passengers; Company employees; Travel agents; 46 U.S.C. App. 289

Dear Mr. Halperin:

This is in response to your letter of February 18, 1993, in which you request that Customs issue a binding ruling addressing the issue of whether sales personnel who are employees of Seabourn Cruise Line, together with independent travel agents, may be transported between two coastwise points aboard the company's vessel the SEABOURN PRIDE.

FACTS:

It is proposed that approximately 125-150 persons, consisting both of employees of the vessel operating company and independent travel agents, board the non-coastwise-qualified commercial cruise vessel SEABOURN PRIDE at the port of Boston, Massachusetts, and proceed with the vessel to New York, New York, where they would disembark. The reported purpose of the voyage is to conduct a promotional meeting aboard the vessel during passage between the two ports.

ISSUE:

Whether non-crew-member employees of a vessel operating company, as well as independent travel agents, may be transported between two United States ports in the company's non-coastwise- qualified commercial vessel without invoking the proscriptions imposed by 46 U.S.C. App. 289 regarding unlawful transportation of passengers by unqualified vessels.

LAW AND ANALYSIS:

The passenger coastwise law, 46 U.S.C. App. 289, provides that:

No foreign vessel shall transport passengers between ports or places in the United States, either directly or by way of a foreign port, under a penalty of $200 for each passenger so transported and landed.

The Customs Service has consistently interpreted this proscription to apply to any vessel except a United States-built, owned, and properly documented vessel (see 46 U.S.C. 12106 and 12110, 46 U.S.C. App. 883, and 19 CFR 4.80(a)). Pursuant to section 4.50(b) of the Customs Regulations (19 CFR 4.50(b)), the word "passenger," for purposes of this provision, is defined as "...any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business." The connection must be direct and immediate, not a remote or hypothetical connection or a connection related only to future voyages.

The Customs Service has long-held that while travel agents may be tangentially connected with the business of a vessel in that they may better sell and promote future travel on that vessel, they are not directly enough connected with the business of the vessel to be classified as other than passengers as defined in 19 CFR 4.50(b), whether or not they are charged a fare. (ruling letters dated April 3, 1958 (MA 216.131) and August 29, 1960 (MA 217.1)) The connection of such persons to the vessel is no closer than their connection to vessels of other lines which offer cruises to the public. It should be noted, however, that travel agents who are employed by the corporation that owns the vessel and whose duties require an on board presence (e.g., to assist a specific group of passengers) would possess a sufficiently direct and immediate nexus to the vessel's business so as not to be considered passengers for purposes of section 289.

The required degree of connection with the business of the vessel is found in the present case as concerns the proposed transportation of the vessel operating company's Regional Sales Managers and Sales Management Staff. As employees of the vessel owner, the business connection is clear and their transportation would not be prohibited.

Accordingly, transporting the travel agents in question would be prohibited, while the transportation of employees of the company would not constitute a violation.

HOLDING:

Travel agents transported on a foreign-flag vessel free of charge between United States points for promotional purposes are "passengers" for purposes of 46 U.S.C. App. 289. Therefore, such transportation is prohibited.

The coastwise transportation of company employees, consisting of Regional Sales Managers and Sales Management Staff members, in that company's non-coastwise-qualified vessel would not be a violation of the coastwise passenger transportation statute since such persons possess a sufficient connection with the business of the vessel so as not to be considered passengers under that statute.

Sincerely,

Acting Chief

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