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HQ H005632

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January 22, 2007

VES-3-02-RR:BSTC:CCI H005632 GOB

CATEGORY: CARRIER

Mr. Alan Dodd
Norton Lilly International
11 Gist Road
Port of Wilmington
Wilmington, DE 19801

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

Dear Mr. Dodd:

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 request that four individuals, who will be carrying out vessel inspections and monitoring the performance of the M/V SAFMARINE DOUALA (the “vessel”), a non-coastwise-qualified vessel, on its voyage from Philadelphia, PA to Savannah, GA, “not be classified as passengers.” The voyage will occur between January 21, 2007 and January 23, 2007.

ISSUE:

Whether the four 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.

In your letter you cite General Letter No. 117, dated May 20, 1916, which originally set forth the meaning of the term “passenger” appearing in 19 CFR 4.50(b). However, this General Letter specifically found that only the officers of the company owning a vessel, and, if a corporate owner, the members of its board of directors, would, by virtue of their positions as such, be connected with the ownership or business of that vessel so as not to be passengers while being carried aboard. Because there is no assertion that the subject individuals are officers or directors of the vessel owner, General Letter No. 117 is not helpful to your position.

You state that these individuals will be carrying out vessel inspections and monitoring the performance of the vessel. 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 [the predecessor statute to 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 subject 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."

Based upon the fact that the subject individuals will be carrying out vessel inspections and monitoring the performance of the vessel during the subject voyage, we find that these 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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