HQ 113463 - Coastwise Trade; Passengers; Transportation of Employees, from One Coastwise Port to Another Coastwise Port on a Foreign-Flag Vessel; 46 U.S.C. App. 289; - United States International Trade Commision Rulings

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HQ 113463

June 6, 1995

VES-3-02/07-R:IT:C 113463 BEW

CATEGORY: CARRIER

Mr. G. Michael Hubbard
District Manager
General Steamship corporation, Ltd.
302 W. 5th Street, Suite 101
San Pedro, California 90731-3208

RE: Coastwise Trade; Passengers; Transportation of Employees, from One Coastwise Port to Another Coastwise Port on a Foreign-Flag Vessel; 46 U.S.C. App. 289;

Dear Mr. Hubbard:

This is in response to your letter dated June 5, 1995, requesting a ruling on behalf of Crystal Cruises concerning the application of the Jones Act to a proposed trip from Los Angeles to San Francisco, California, on a foreign flag vessel as set forth below.

FACTS:

In a letter dated June 2, 1995, from Crystal Cruises, it is stated that the CRYSTAL SYMPHONY was delivered from the Kvaerner Yard, Finland, on April 18, 1995. The ship is now ready to start the Alaska cruise season as of June 8, 1995, sailing out of San Francisco. You state that many of the functions require additional attendance for the vessel to successfully continue the voyage to Alaska. In order to finalize all preparations and be ready for this upcoming season, Crystal Cruises has requested permission for certain Crystal Cruises personnel to travel with the ship from Los Angeles to San Francisco, on June 7, 1995, to make necessry adjustments enroute. The personnel will disembark from the vessel in San Francisco on June 8, 1995.

ISSUE:

Whether the transportation of passengers on a foreign-flag vessel as described above constitutes a violation of 46 U.S.C. App. 289.

LAW AND ANALYSIS:

Generally, the coastwise laws (e.g., 46 U.S.C. App. 289 and 883, and 46 U.S.C. 12106 and 12110) prohibit the transportation of merchandise or passengers between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in and documented under the laws of the United States, and owned by persons who are citizens of the United States.

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 penalty of $200 for each passenger so transported and landed.

In interpreting the coastwise laws, Customs has ruled that a point in United States territorial waters is considered a point embraced within the coastwise laws. The coastwise laws generally apply to points in the territorial sea, defined as the belt, three (3) nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline, in cases where the baseline and the coastline differ.

For purposes of the coastwise laws, a vessel "passenger" is defined as "... any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business" (Section 4.50(b), Customs Regulations).

In the subject case the CRYSTAL SYMPHONY is a commercial vessel used in the cruise industry, and the subject persons are employees of the company. Section 4.80a(b)(1) of the Customs Regulations (19 CFR 4.80a(b)(1) provides that:

If a passenger is on a voyage solely to one or more coastwise ports and the passenger disembarks or goes ashore temporarily at a coastwise port, there is a violation of the coastwise law. Section 4.50(b) exempts persons connected with the business of a vessel from passenger status.

With regard to the employees of the vessel company, the facts presented show that the subject employees are connected with the operation, navigation, ownership, or business of the vessel within the meaning of section 4.50 (b) of the Customs Regulations. While employees who are directly or immediately connected with the vessel's operation, navigation, ownership, or business may be exempt from passenger status under section 4.50(b), employees who are indirectly or remotely connected with the business of the vessel, such as those whose connection with the vessel does not go beyond being employed by the corporation that owns the ship, would not be exempt from passenger statute.

HOLDING:

The subject persons listed in Crystal Cruises letter June 2, 1995, are not deemed passengers as defined in section 4.50 (b) of the Customs Regulations, because they are sufficiently connected with the business of the vessel within the meaning of section 4.50(b). Customs has held that no violation of the coastwise laws, 46, U.S.C. App. 289 would occur when persons connected with the business of the vessel disembark from the vessel at a port other than the port of embarkation.

Sincerely,

Arthur P. Schifflin
Chief

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