HQ H012513 - Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR § 4.50(b) - United States International Trade Commision Rulings

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HQ H012513

June 11, 2007

VES-3-02-OT: RR:BSTC:CCI H012513 GG

CATEGORY: CARRIER

Mr. Stanton MacDonald
Norton Lilly International Agency
249 E Ocean Blvd, Suite 200
Long Beach, CA 90802

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

Dear Mr. MacDonald:

This is in response to your correspondence of June 7, 2007, in which you inquire about the coastwise transportation of four individuals. Our ruling is set forth below.

FACTS

The voyage in question involves the transportation of the subject four individuals aboard the non-coastwise-qualified vessel APL CHINA (the “vessel”), from Los Angeles/Long Beach, California, to Oakland/San Francisco, California on or about June 12, 2007. The subject individuals are the wife and son of the vessel’s master; the wife of the chief engineer; and an employee who is a Safety, Quality, Environmental, and Security Manager.

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.

In this regard, 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. See Cust. Bull., Vol. 36, No. 23, p. 50 (June 5, 2002).

However, we note that the above notice also repeated the long-held CBP position that in accordance with General Letter No. 117 of May 20, 1916, from the former Bureau of Navigation, wives and children of the officers of a vessel are not passengers since they are connected to the ownership and business of the vessel. In the instant case, the master as well as the chief engineer both qualify as “officers of the vessel,” therefore, the spouse and child of the master and the spouse of the chief engineering officer may be aboard a non-coastwise-qualified vessel during a coastwise voyage and are not “passengers” for purposes of administering 46 U.S.C. § 55103.

With respect to the fourth individual, you state that the subject individual is an employee of the vessel and is a “Safety, Quality, Environmental, and Security Manager,” and will be transported on the vessel for the purpose of supervising and testing the crew on safety of the vessel, such as fire drills and evacuation procedures. 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.

Thus, in the present case, to the extent that the individual 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 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 (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 directly and substantially connected with the operation and business of the vessel. Therefore, we determine that the subject individual is not a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Accordingly, the coastwise transportation of such individual is not in violation of 46 U.S.C. § 55103.

HOLDING

The four subject individuals described above, the immediate family members (i.e., spouse and children) of the officers of the vessel and the Safety, Quality, Environmental, and Security Manager 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 on a non-coastwise qualified vessel is not in violation of 46 U.S.C. § 55103.

Sincerely,

Glen E. Vereb

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