HQ H00417 - Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR § 4.50(b) - United States International Trade Commision Rulings

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HQ H004175

December 8, 2006

VES-3-02-RR:BSTC:CCI H004175 GOB

CATEGORY: CARRIER

Brian Peacher
Maersk Line
2500 Navy Way
Terminal Island, CA 90731

RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR § 4.50(b)

Dear Mr. Peacher:

This letter is in response to your letter of December 7, 2006, with respect to the coastwise transportation of two individuals, scheduled to commence on December 10, 2006. Our ruling is set forth below.

FACTS:

You request that two individuals be permitted to transit with the MV SEALAND INTREPID from Los Angeles to Oakland during the period of December 10, 2006 through December 12, 2006.

You provide the following information:

We are writing to request written permission for Maersk Line to have company employees ride our Maersk Line vessels coastwise to develop better safety practices and business processes between APL Terminals (Maersk owned companies) and Maersk Line. To achieve this, the company requests that the APMT assistant terminal operations managers spend time aboard the vessels to understand what the vessel crew’s responsibilities are once the cargo has loaded and is in route to the next port. Amongst the responsibilities that are to be learned are:

Lashing gear checks and proper stowage of lashing gear.

Cargo stowage and vessel stability.

Hazardous and reefer management.

Reefer QRR (Quality Reefer Reporting).

Importance of schedule integrity for bunker efficiency.

Discharge and load operations from vessel vantage point.

The employees will discuss with crew the challenges the terminals face when loading and discharging cargo and hear the vessels concerns and recommendations. The goal is for the APL Terminal group to build a better relationship with our vessels which will in turn improve terminal efficiency and communications.

ISSUE:

Whether the individuals are “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b)?

LAW AND ANALYSIS:

Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. Such a vessel, after it has obtained a coastwise endorsement from the U.S. Coast Guard, is said to be “coastwise qualified.”

The coastwise laws generally apply to points in the territorial sea, which is 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.

The coastwise law applicable to the carriage of passengers is found in 46 U.S.C. § 55103 (recodified by Pub. L. 109-304, enacted on October 6, 2006) and provides that:

(a) In General. Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not transport passengers between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel-
is wholly owned by citizens of the United States for purposes of engaging in the coastwise traffic; and
has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement.

(b) Penalty. The penalty for violating subsection (a) is $300 for each passenger transported and landed.

Section 4.50(b), Customs Regulations (19 CFR § 4.50(b)) provides as follows:

A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business.

You state that the subject individuals will be on the voyage in order to develop better safety practices and business processes between APM Terminals (Maersk owned companies) and Maersk Line. In this context, and in 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 46 U.S.C. § 55103 and 19 CFR § 4.50(b), 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. HQ 101699, of November 5, 1975; see also HQ 116721, of September 25, 2006, quoting HQ 101699.

Thus, in the present case, to the extent that the individuals 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 individuals 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."

Upon consideration of this matter, we find that the subject individuals are not “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Therefore, the coastwise transportation of such individuals is not in violation of 46 U.S.C. § 55103.

HOLDING:

The subject individuals are not “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Therefore, the coastwise transportation of such individuals is not in violation of 46 U.S.C. § 55103.

Sincerely,

Glen E. Vereb
Chief

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