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HQ 112380




August 11, 1992

VES-3-07-CO:R:IT:C 112380 GEV

CATEGORY: CARRIER

Lawrence Rapp
Vice President, Hotel Operations
Seabourn Cruise Line
55 Francisco Street
San Francisco, California 94133

RE: Coastwise Trade; Passengers; Travel Agents; 46 U.S.C. App. 289

Dear Mr. Rapp:

This is in response to your letter dated July 13, 1992, requesting a ruling regarding the interpretation of the coastwise laws as applied to the carriage of nonpaying travel agents aboard a foreign-flag vessel. Our ruling on this matter is set forth below.

FACTS:

Seabourn Cruise Line operates two Norwegian-flag cruise ships on international itineraries. On September 29, 1993, one of those vessels, the M/S SEABOURN PRIDE, will complete a voyage at Boston, Massachusetts. On September 30, 1993, the same vessel will commence her next voyage from New York. However, due to the restrictions imposed by the coastwise laws, the subject vessel is scheduled to proceed from Boston to New York without passengers.

In lieu of the absence of passengers on the Boston - New York voyage noted above, the Cruise Lines International Association proposes to conduct a series of educational seminars aboard the ship during the course of this voyage. Approximately 100-150 travel agents and wholesalers would learn specific techniques which would allow them to better market the benefits of cruise travel. These seminars would be conducted by industry leaders and trained educators. This voyage would not be sold and Seabourn Cruise Line would collect no revenue.

ISSUE:

Whether travel agents and wholesalers 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.

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 unquestionably 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 above rationale is applicable to both the travel agents and wholesalers under consideration.

Accordingly, the travel agents and wholesalers in question who would be on the proposed one day cruise in order to learn specific techniques which would allow them to better market the benefits of cruise travel are considered passengers for purposes of section 289. Therefore their proposed transportation from Boston to New York on the M/S SEABOURN PRIDE would be prohibited.

HOLDING:

Travel agents and wholesalers 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.

Sincerely,

B. James Fritz

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