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HQ 114032




July 23, 1997

VES-3-07-RR:IT:EC 114032 GEV

CATEGORY: CARRIER

Ms. Mary Lou McHugh
Assistant Deputy Under Secretary of Defense (Transportation Policy)
3000 Defense Pentagon
Washington, D.C. 20301-3000

RE: Coastwise Trade; Passengers; Naval Liaison Officers; 19 CFR 46 U.S.C. App. ? 289

Dear Ms. McHugh:

This is in response to your letter of June 20, 1997, to Stuart P. Seidel, Assistant Commissioner, Office of Regulations and Rulings, U.S. Customs Service, referencing a waiver of the passenger coastwise law (46 U.S.C. App.? 289) we granted on August 26, 1996 (our file no. 227200) enabling Naval Liaison Officers (NLOs) to train aboard any merchant ship transiting coastwise during an August 1996 Naval Control of Shipping exercise.

In the aforementioned waiver you reference our statement that with respect to any future such exercises, the submission of more detailed information regarding the specific function(s) of the NLOs might obviate any similar waiver requests and/or a revision of 19 CFR ? 4.80a inasmuch as they may not be considered "passengers" as that term is defined in 19 CFR ? 4.50(b). In this regard you are now providing us such additional information regarding the NLO function. Consequently, we are now provided with sufficient facts upon which to issue a binding ruling on this matter pursuant to 19 CFR ? 177.2(b)(1). This ruling is set forth below.

FACTS:

NLOs are specially trained naval reservists who act as technical communications assistants under the auspices of the U.S. Navy's Naval Control of Shipping Organization. That organization is charged with providing for safe passage of merchant shipping through threatened waters in the event of a crisis or contingency. The smooth and efficient flow of that merchant shipping is crucial for both logistical support operations and the sustainment of the regional economy. The
embarked NLOs provide an onboard Navy presence to coordinate vessel tactics and maneuvering, ensuring the merchant vessels are routed around military operational areas when necessary or provided with military escorts and/or formed into convoys when required. These officers act as the information conduit with naval vessels and all other military elements to interpret that information for the ship's masters. In this way, the NLOs are directly responsible to provide advice to the ship's master for the safe navigation of the vessels on which they are embarked. It is in the national security that they continue to train in their specialty during fleet exercises, however, coastwise-qualified ships are not always available during such exercises.

ISSUE:

Whether NLOs are "passengers" within the meaning of 19 CFR ? 4.50(b) so that their coastwise transportation aboard non-coastwise-qualified vessels is in contravention of 46 U.S.C. App.

LAW AND ANALYSIS:

The Act of June 19, 1886, as amended (24 Stat. 81; 46 U.S.C. App. ? 289, sometimes called the coastwise passenger law), 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.

Customs has consistently interpreted the above prohibition to apply to all vessels except United States-built, owned, and properly documented (i.e., coastwise-qualified) vessels (see 46 U.S.C. ?? 12106, 12110; 46 U.S.C. App. ? 883; 19 CFR ? 4.80). Furthermore, for purposes of the above statute a "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." (See 19 CFR ? 4.50(b))

The coastwise laws generally apply to points in the territorial sea, 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, in cases where the baseline and the coastline differ.

Upon reviewing the function of the NLOs as stated above, it is readily apparent that they are in fact connected with the operation and navigation of the vessels on which they are being transported. Consequently, they are not considered "passengers" as that term is defined in 19 CFR ? 4.50(b) and therefore may be transported between coastwise points by non-coastwise-qualified vessels without being in contravention of 46 U.S.C. App. ? 289.

HOLDING:

Naval Liaison Officers are not considered "passengers" within the meaning of 19 CFR
App. ? 289.

Sincerely,

Jerry Laderberg

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