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HQ H011874

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May 31, 2007

VES-3-02:OT:RR:BSTC:CCI H011874 ALS

CATEGORY: CARRIER

Mr. Hiroko Yamagishi
Operation Division
NYK Cruises
Yusen Building, 3-2, Marunouchi 2-chrome
Chiyoda-ku, Tokyo, Japan

Dear Mr. Yamagishi:

This letter is in response to your request of May 29, 2007, with respect to the coastwise transportation of two individuals. Our ruling is set forth below.

FACTS:

You ask whether the individuals may be transported on the non-coastwise-qualified M/S ASUKAII ("vessel"), from a port in New York state to San Francisco, California. The individuals will embark on June 3, 2007 in New York and disembark in San Francisco June 21, 2007. The individuals will “embark as clothing consultants and they will just give advice about fashion for the passengers onboard.”

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.

In CBP Ruling HQ H002925 (November 8, 2006), CBP held that a key-accounts representative who was transported aboard a vessel “to educate travel agents and industry professionals about [the cruise line’s] product during the transit” was a passenger within the meaning of 46 U.S.C. § 55103 insofar as the representative was not “directly and substantially”

See HQ 116721, supra; and see HQ 116659(May 19, 2006) (referencing the “direct and substantial” test). connected with the operation, navigation, ownership or business of the vessel itself. CBP reasoned that although transporting the key-accounts representative aboard the vessel fostered the business interests of the cruise line, it did not connect the representative directly and immediately with the business of the vessel itself.

Similarly, in the present case, you proposed to transport two individuals who will “embark as clothing consultants and they will just give advice about fashion for the passengers onboard.” To the extent that the subject individuals would not have been 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 passengers within the meaning of 46 U.S.C. § 55103 and 19 CFR 4.50(b).

HOLDING:

The subject individuals 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 a violation of 46 U.S.C. § 55103.

Sincerely,

Glen E. Vereb

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