HQ H017969 - Coastwise transportation; passengers; 46 U.S.C. §55103 - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 2007 HQ Rulings > HQ H017889 - HQ H018476 > HQ H017969

Previous Ruling Next Ruling
HQ H017969

October 3, 2007

VES-3-02-RR:BSTC:CCI H017969 CK

CATEGORY: CARRIER

John Mullen
Marine Agent
S5/Norton Lilly International
952 Houston Northcutt Blvd, Suite 100
Mount Pleasant, SC 29464

RE: Coastwise transportation; passengers; 46 U.S.C. §55103

Dear Mr. Mullen:

In your email letter of October 2, 2007, you requested that an internal auditor be allowed to travel aboard the non-coastwise-qualified vessel MAERSK TANGIER on voyage from Charleston, SC to Norfolk, VA. Our ruling on your request follows.

FACTS:

You requested that an internal auditor from Diamond Ship Management, the operators of the MAERSK TANGIER, be allowed to travel aboard that non-coastwise-qualified vessel on a voyage from Charleston, SC to Norfolk, VA. This individual would embark October 4, 2007 at Charleston, SC and disembark at Norfolk, VA on October 6, 2007. The individual requesting permission will perform an internal audit that consists of interviewing the captain and crewmembers on issues of safety and quality. The auditor will then report the overall report/ranking of the vessel to Diamond Ship Management, the operators of the MAERSK TANGIER.

ISSUE:

Whether the internal auditor described above would be a passenger under the coastwise passenger statute, 46 U.S.C. §55103.

LAW AND ANALYSIS:

The coastwise passenger statute, 46 U.S.C. §55103 (recodified from former 46 U.S.C. App. 289; Pub.L. 109-304 October 6, 2006) provides that no vessel may transport passengers between ports or places in the United States either directly or by way of a foreign port, upon a penalty of $300 for every passenger so transported and landed (see 19 CFR 4.80(b), unless it has been documented for the coastwise trade under chapter 121 of Title 46, United States Code. Under section 55103 (see 19 CFR 4.80a(a)(5)), a “passenger” is any person carried aboard a vessel who is not connected with the operation of the vessel, her navigation, ownership, or business (19 CFR 4.50(b)). In this regard, as resolved in a June 5, 2002, Customs Bulletin notice (Vol. 36, No. 23, p. 50, 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. In the current context, Headquarters ruling (HQ) 116752, of November 3, 2006, is instructive in explaining the operative administrative law applicable in this context, as follows:

[T]he Customs Service [now Customs and Border Protection (CBP)] has repeatedly ruled that if any persons are transported coastwise who are bona fide agents of the line or officers of companies acting as such agents and if such persons while on the voyage are concerned with observing and appraising the facilities offered, such personsare not ‘passengers’ under section 289 [now section 55103] and §4.50(b) (emphasis added) (HQ 103410, of May 5, 1978 (operations manager of freight line transported coastwise aboard freight line’s vessel to observe vessel’s operational pattern thereby deemed connected with operation and business of vessel so as not to be passenger when being transported for this purpose)).

HQ 116752 (emphasis added) (executive chef of cruise line transported aboard its vessel “to monitor and access the standards of [vessel’s culinary operation onboard” found to be connected with that vessel’s operation/business, and not considered passenger).

Further we note that 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 section 4.50(b) and 46 U.S.C. §55103 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 (November 5, 1975); see also HQ 116721 (September 25, 2006, quoting HQ 101699). Additionally, previously internal auditors have been determined to not be passengers. See, HQ H016781, dated September 12, 2007 and HQ H016883, dated September 12, 2007.

In the present case, the internal auditor for Diamond Ship Management will board the MAERSK TANGIER to interview the captain and crewmembers on issues of safety and quality in order to report the overall report/ranking of the vessel repair to the operators of the vessel. The internal auditor is directly and substantially connected to the business of the vessel and is not a passenger for purposes of 46 U.S.C. §55103.

HOLDING:

Under the facts presented, the internal auditor described above is not a passenger for purposes of administering 46 U.S.C. §55103. Hence, the proposed coastwise transportation of the auditor aboard the MAERSK TANGIER would not be in violation of 46 U.S.C. §55103.

Sincerely,

Glen E. Vereb

Previous Ruling Next Ruling