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HQ 116743




October 27, 2006

VES-3-02-RR:BSTC:CCI 116743 rb

CATEGORY: CARRIER

James F. Cooney, President
Atlantic Cruise Services, Inc.
5101 South Broad Street
Philadelphia, PA 19112

RE: Coastwise transportation; Contractors; Passenger Vessel Services Act; 46 U.S.C. App. 289

Dear Mr. Cooney:

Your October 23, 2006, letter, transmitted by facsimile, with an accompanying list of 153 contractors, requests a decision as to whether these contractors would be passengers when transported aboard Royal Caribbean International’s (RCI’s) vessel, EMPRESS OF THE SEAS, from Philadelphia, PA, on October 28, 2006. Some of the contractors would thereafter disembark the vessel at Charleston, SC, and the remainder would disembark at San Juan, PR. Our ruling follows.

FACTS:

A cruise line is planning a refurbishment and general drydock repair for one of its foreign-flagged passenger vessels. In advance thereof, 153 persons, characterized generally as contractors, would board the vessel at Philadelphia, PA, along with their tools and equipment, and they would be transported aboard the vessel to Charleston, SC, where some of the contractors would disembark the vessel, and San Juan, PR, where the remainder would disembark the vessel.

It is stated that during the course of the above-described transportation, these contractors would be actively engaged in performing work/services aboard the vessel in furtherance of the following: various installations, including those concerning passenger-cabin bathroom floors, bedding, the pool deck, and cabling for closed circuit television (CCTV); upholstery cleaning; machinery, hull, and incinerator work; refurbishment, including crew cabins, hardwood floors, and stone work; audio/video upgrades; support services for descriptive video-service telecommunications for the deaf (DVS-TDI); covering portholes with protective
ultraviolet (UV) film; and general marine engineering and propulsion work. Also, supervisors, managers, facilities consultants and logistical support personnel would be aboard the vessel to coordinate the foregoing activities.

In addition, two employees of the cruise line whose function is identified as “costumer/ entertainment” would be aboard “setting up the new shows for the new itinerary” (“onboard specifically for final adjustments to the dancers’ costumes & wigs as we implement a new show for the Holiday season”).

ISSUE:

Whether the coastwise transportation of the subject contractors aboard the foreign vessel would violate 46 U.S.C. App. 289.

LAW AND ANALYSIS:

The Passenger Vessel Services Act, also known as the coastwise passenger statute, 46 U.S.C. App. 289, provides that no foreign vessel may transport passengers between ports or places in the United States either directly or by way of a foreign port, upon a penalty of $300 for every passenger so transported and landed (see 19 CFR 4.80(b), adjusting the penalty to $300 pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990).

For purposes of section 289 (see 19 CFR 4.80a(a)(5)), a “passenger” is “any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business” (19 CFR 4.50(b)). In this context, and “[i]n 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 section 4.50(b) and section 289 if they are required to be on board to contribute to the accomplishment of the operation or navigation of the vessel during the voyage or are on board because of a necessary vessel ownership or business interest during the voyage” (Headquarters ruling (HQ) 101699, of November 5, 1975; see also HQ 116721, of September 25, 2006, quoting HQ 101699).

By contrast, “[p]ersons who are on board a vessel solely to perform functions after the vessel’s arrival at its destination have consistently been held to be passengers within the meaning of section 4.50(b)” (HQ 104260, of October 16, 1979 (emphasis added)). Accord, HQ 103318, of April 5, 1978; HQ 105761, of August 27, 1982. See also HQ 116721, supra (stevedores when transported aboard vessel to lade cargo at coastwise destination were passengers under section 289).

Thus, in the present case, to the extent that the contractors would be engaged in any shipboard activities while traveling on the foreign vessel between coastwise ports, that would be “directly and substantially” related to the operation or business of the vessel itself, as would be the case under the facts herein submitted, such contractors would not be considered to be passengers (see HQ 116721, supra; and see HQ 116659, of May 19, 2006, referencing the “direct and substantial” test). See also, e.g., Customs telex 104712, of July 21, 1980, finding that repairmen were not passengers when carried aboard a foreign vessel between U.S. ports “for [the] purpose of repairing vessel en route between such ports." And this would likewise include the two cruise-line employees involved in entertainment. Compare also, HQ 115257, of January 10, 2001 (entertainment staff of cruise line when transported aboard vessel to conduct, implement and monitor new programs for passenger entertainment were found not to be passengers under section 289 and § 4.50(b)).

HOLDING:

Under the facts presented, the subject contractors would not be considered to be passengers inasmuch as they would be engaged in shipboard activities while traveling on the foreign vessel between coastwise ports (boarding at Philadelphia, PA, and disembarking either at Charleston, SC, or San Juan, PR), that would be “directly and substantially” related to the operation or business of the vessel itself during such transportation; as a result, the contractors’ coastwise transportation aboard the vessel in this case would not be in violation of 46 U.S.C. App. 289.

Sincerely,

Glen E. Vereb
Chief

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