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HQ H006045

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January 30, 2007

VES-3-02-RR:BSTC:CCI H006045 IDL

CATEGORY: CARRIER

Ruben Arroyo
Senior Operations Manager
Barwil Agencies, Inc.
210 Edgewater Street
Staten Island, New York 10305

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

Dear Mr. Arroyo:

This is in response to your correspondence of January 29, 2007, with respect to the coastwise transportation of a technician aboard a foreign-flagged vessel. Our response on this matter is set forth below.

FACTS:

A repair technician plans to embark the MV MAERSK VALENCIA, a foreign-flagged vessel, at the Port of Newark, New Jersey on January 31, 2007, and plans to disembark at Philadelphia, Pennsylvania approximately two days later.

You have stated that the coastwise transportation of the technician is necessary in order to perform repairs on the “Auxiliary Engine Automation System.” Such repairs must be completed while the vessel is in transit due to the vessel’s itinerary and business commitments.

ISSUE:

Whether the use of a foreign-flagged vessel to transport a technician from Newark to Philadelphia for the purpose stated 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 section 4.50(b). HQ 116752.

Further, 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 (November 5, 1975); see also HQ 116721 (September 25, 2006), quoting HQ 101699.

To the extent that the aforementioned individual 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 activity satisfies the requisite criteria in this regard.

Accordingly, the coastwise transportation of the repair technician aboard the foreign-flagged vessel for the purpose stated above would not violate 46 U.S.C. § 55103.

HOLDING:

The use of a foreign-flagged vessel to transport a technician from Newark to Philadelphia for the purpose stated above would not constitute a violation of 46 U.S.C. § 55103.

Sincerely,

Glen E. Vereb
Chief

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