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HQ H004493

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December 20, 2006

VES-3-02-RR:BSTC:CCI H004493 IDL

CATEGORY: CARRIER

Mr. Jorge L. Viteri
District Manager, California
Quay Cruise Agencies, U.S.A.
1000 E. Del Amo Boulevard
Carson, California 90746-3520

RE: Coastwise Transportation; 46 U.S.C. § 55103; Officers

Dear Mr. Viteri:

This is in response to your correspondence of December 13, 2006, with respect to the coastwise transportation of an officer aboard a foreign-flagged vessel. Our response on this matter is set forth below.

FACTS:

The Executive Vice President of Operations for Regent Seven Seas Cruises plans to embark the M/V SEVEN SEAS MARINER, a foreign-flagged vessel, in Los Angeles, California on December 26, 2006, and disembark in San Diego, California one day later. The purpose of such travel is to attend to company business, including representing the owners and management of the vessel, conducting an Audit on Operations, and meeting with Senior Vessel Management to review plans for a project with respect to the vessel during upcoming dry-dock work.

ISSUE:

Whether the use of the M/V SEVEN SEAS MARINER, a foreign-flagged vessel, to transport the Executive Vice President of Operations aboard the vessel from one U.S. port to another U.S. port for the purposes discussed above would constitute a violation of 46 U.S.C. § 55103?

LAW AND ANALYSIS:

The coastwise passenger statute, 46 U.S.C. § 55103 (recodified from former 46 U.S.C. App. § 289; Pub. L. 109-304, October 6, 2006), provides that no 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, unless it:
is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and has been issued a certificate of documentation with a coastwise endorsement under chapter 121 of Title 46, United States Code, or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement.

Under section 55103 (see 19 CFR 4.80(a)(5)), a “passenger” is any person carried aboard a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business (19 CFR 4.50(b)). In this regard, as resolved in a June 5, 2002, Customs Bulletin notice (Vol. 36, No. 23, p. 50), persons transported on a vessel would be passengers unless they were “directly and substantially” connected with the operation, navigation, ownership, or business of that vessel itself.

In the current context, Headquarters ruling 116752 (November 3, 2006), is instructive in explaining the operative administrative law applicable herein, as follows:

[T]he Customs Service [now Customs and Border Protection (CBP)] has repeatedly ruled that if any persons are transported coastwise who are bona fide agents of the line or officers of companies acting as such agents and if such persons while on the voyage are concerned with observing and appraising the facilities offered, such personsare not ‘passengers’ under section 289 [55103] and § 4.50(b) (emphasis added) (HQ 103410, of May 5, 1978 (operations manager of freight line transported coastwise aboard freight line’s vessel to observe vessel’s operational pattern thereby deemed connected with operation and business of vessel so as not to be a passenger when being transported for this purpose)). HQ 116752 (emphasis added).

To the extent that the Executive Vice President of Operations would be engaged in any shipboard activities while traveling on the foreign-flagged vessel between coastwise ports that would be “directly and substantially” related to the operation or business of the vessel itself, such individual would not be considered to be a passenger (see HQ 116659 (May 19, 2006), referencing the “direct and substantial” test). The aforementioned activities satisfy the requisite criteria in this regard.

Accordingly, the coastwise transportation of the Executive Vice President of Operations aboard the M/V SEVEN SEAS MARINER for the purposes stated above would not violate 46 U.S.C. § 55103.

HOLDING:

The use of the M/V SEVEN SEAS MARINER, a foreign-flagged vessel, to transport the Executive Vice President of Operations aboard the vessel from one U.S. port to another U.S. port for the purposes discussed above would not constitute a violation of 46 U.S.C. § 55103.

Sincerely,

Glen E. Vereb
Chief

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