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HQ H008510

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March 22, 2007

VES-3-02-OT:RR:BSTC:CCI H008510 GG

CATEGORY: CARRIER

Mr. Sven Hempel
Finance and Accounting - GERFINACC
Maersk Deutschland A/S & Co. KG
Hamburg, Germany

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

Dear Mr. Hempel:

This is in response to your correspondence of March 19, 2007, in which you inquire about the coastwise transportation of two individuals. Our ruling is set forth below.

FACTS

You ask whether two individuals may be transported on the non-coastwise-qualified MAERSK GLOUCESTER (the “vessel”), from Newark, New Jersey to Miami, Florida during the period from March 28, 2007 to April 3, 2007, for the purpose of observing the daily life on a vessel and gaining better insight about what their colleagues working on a vessel actually do. The individuals are trainees in a vessel familiarization tour, as part of the Maersk International Shipping Education (“MISE”) program.

ISSUE

Whether the subject 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--

(1) is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and

(2) 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), U.S. 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 transported on the vessel for the purpose of observing the daily life on a vessel to gain better insight about what life on a vessel is like. 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. See CBP Ruling HQ 101699 (November 5, 1975); see also HQ 116721 (September 25, 2006), quoting HQ 101699.

However, in the present case, to the extent that the individuals would not 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, such individuals would be considered to be passengers (see HQ 116721, supra; and see HQ 116659 (May 19, 2006), referencing the “direct and substantial” test). See also, e.g., Customs telex 104712 (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.”

We find that the proposed activity in this case is not directly and substantially related to the operation, navigation, ownership or business of the vessel. Therefore, we determine that the subject individuals are “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Accordingly, the coastwise transportation of such individuals is in violation of 46 U.S.C. § 55103.

HOLDING

The subject individuals described above are “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Therefore, the coastwise transportation of such individuals is in violation of 46 U.S.C. § 55103.

Sincerely,

Glen E. Vereb
Chief
Cargo Security, Carriers and Immigration Branch

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