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HQ H008781

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March 26, 2007

VES-3-02-RR:BSTC:CCI H008781 GOB

CATEGORY: CARRIER

Kal Singh
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. Singh:

This letter is in response to your letter which we received of March 22, 2007, with respect to the coastwise transportation of an individual. Our ruling is set forth below.

FACTS:

You ask whether an individual may be transported on the non-coastwise-qualified M/V HOEGH DELHI (the “vessel”), on its voyage from Wilmington, Delaware to Jacksonville, Florida from April 1, 2007 to April 5, 2007. The individual will be performing a “general inspection/visit” with the following objectives: performing a general technical inspection; running an internal training/awareness program; and reviewing reports to prepare for discussions between your firm and the new building yard.

ISSUE:

Whether the subject individual is a “passenger” 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.

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 individual is an officer or director of the vessel owner, General Letter No. 117 is not helpful to your position.

You state that the subject individual will be transported on the vessel in order to perform a “general inspection/visit” with the following objectives: performing a general technical inspection; running an internal training/awareness program; and reviewing reports to prepare for discussions between your firm and the new building yard. 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. 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 individual would be engaged in any shipboard activities while traveling on the non-coastwise-qualified 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 to be 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."

Upon consideration of this matter, we find that the subject individual is not a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Therefore, the coastwise transportation of such individual is not in violation of 46 U.S.C. § 55103.

HOLDING:

The subject individual is not a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Therefore, the coastwise transportation of such individual is not in violation of 46 U.S.C. § 55103.

Sincerely,

Glen E. Vereb
Chief

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