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HQ H010670




May 7, 2007

VES-3-02:RR:BSTC:CCI H010670 ALS

CATEGORY: CARRIER

Mr. Vernon Gray
The Bill Lukowski Steamship Agency, Inc.
2202 Boston Street, Suite 205
Baltimore, Maryland 21231

Dear Mr. Gray:

This letter is in response to your request of May 2, 2007, with respect to 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 M/T AEGEAN TRADER (the "vessel"), from Baltimore, Maryland to Albany, New York. The individuals will embark in Baltimore on May 6, 2007 and will disembark in Albany on or about May 8, 2007. The individuals will “install and reassemble the main engine” of the vessel. During transit they will also “verify that repairs were made correctly and insure that the engine is performing satisfactorily.”

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:

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.

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 individual individuals will “install and reassemble the main engine” of the vessel. They will also “verify that repairs were made correctly and insure that the engine is performing satisfactorily.” 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. CBP Ruling HQ 101699 (November 5, 1975); see also CBP Ruling HQ 116721 (September 25, 2006).

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, navigation, or business of the vessel itself, as would be the case under the facts herein submitted, such individuals would not be considered passengers (see HQ 116721, supra; and CBP Ruling HQ 116659 (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."

We find that the proposed activities in this case are directly and substantially connected with the operation, navigation, and business of the vessel. Therefore, we determine that the subject individuals are not "passengers" within the meaning of 46 U.S.C. § 55103 and 19 CFR 4.50(b). Accordingly, 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

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