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HQ H014479

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July 20, 2007

VES-3-02-OT:RR:BSTC:CCI H014479 GG

CATEGORY: CARRIER

Ms. Leida Hernandez
TFMarine, Inc.
1201 Corbin Street
Elizabeth, NJ 07201

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

Dear Ms. Hernandez:

This is in response to your correspondence of July 18, 2007, in which you inquire about the coastwise transportation of two individuals. Under your electronic transmittal, you append a July 17, 2007 letter from "K" Line Ship Management PTE LTD ("K" Line), which has a contract with Haque & Sons LTD ("Haque") in Canada as manning consultants to attend to "K" Line-managed vessels in the United States primarily for matters concerning Bangladesh-nationality crew. It is requested that two such Haque manning consultants be allowed to embark on "K" Line's vessel, M/V MANHATTAN BRIDGE, at Port Elizabeth, NJ on July 23, 2007, sail to Norfolk, VA on July 24, 2007, and to disembark at Charleston, South Carolina on July 26, 2007. Our ruling is set forth below.

FACTS

A ship management company has a contract with a Canadian company as manning consultants to attend to the ship company's vessels in the United States for crew-related matters in connection with Bangladesh-nationality crew. Toward that end, two such consultants would embark on one of the ship company's non-coastwise-qualified vessels in Port Elizabeth, on July 23, 2007, and would disembark at Charleston on July 26, 2007. While aboard the vessel, the consultants would oversee crew-related matters for Bangladesh-nationality crew on board the vessel.

ISSUE

Whether the subject individuals described in the FACTS section above 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 overseeing crew-related matters for Bangladesh-nationality crew on board the vessel. 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, 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 or business of the vessel itself, as would be the case under the facts herein submitted, such individuals would not 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."

In the present case, it is stated that the two consultants would be aboard the vessel to oversee crew-related matters for Bangladesh-nationality crew, namely security matters on board the vessel. In this regard, it is clear that the two consultants, engaged as described while in transit aboard the ship, would thereby be so connected with the operation and business of the vessel itself as not to be passengers under those circumstances (compare, e.g., Headquarters ruling (HQ) H005405, of January 17, 2007 (owner's representative conducting audit and overseeing crew's and vessel's overall operation during transit not passenger); and HQ H006223, of February 1, 2007 (two individuals transported from New York/Newark to Charleston, SC, for the purpose of "gangway security and crew management" not passengers)).

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 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 manning consultants would not be passengers under the coastwise passenger statute, 46 U.S.C. § 55103, when transported for the purposes described in this case.

Sincerely,

Glen E. Vereb

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