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HQ H005629

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January 23, 2007

VES-3-02-RR:BSTC:CCI H005629 GOB

CATEGORY: CARRIER

Mr. Leon Sutcliffe
Director, Port Operations
Carnival Cruise Lines
3655 NW 87th Avenue
Miami, FL 33178

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

Dear Mr. Sutcliffe:

This letter is in response to your letter of January 19, 2007 with respect to the coastwise transportation of certain individuals. Our ruling is set forth below.

FACTS:

You describe the facts as follows. Seven senior executives of Carnival Cruise Lines wish to sail on the MS FASCINATION (the “vessel”), a non-coastwise-qualified vessel, in order to conduct a quality control committee visit with the captain, officers, staff, and crew of the vessel. The quality control committee regularly sails with Carnival Cruise Lines vessels in order to hold an open forum seminar with the crew for the purpose of discussing various issues. You state that “[t]he seminars are essential to the growth of our company and ongoing training of the entire staff onboard.”

The senior executives plan to embark the vessel in Miami on January 29, 2007 and disembark in Key West on January 30, 2007.

ISSUE:

Whether the seven senior executives 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 and Border Protection (“CBP”) 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 providing training to the crew on the subject voyage. 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 19 CFR 4.50(b) and 46 U.S.C. § 55103 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 individual would not be considered a passenger (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."

In the present case, you state that the activities of the seven individuals are in furtherance of the “ongoing training of the entire staff onboard.” Therefore, in accord with the above-described position, the seven senior executives are not “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b) when they are transported on the subject voyage.

HOLDING:

The seven senior executives of Carnival Cruise Lines 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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