HQ H023102 - Coastwise Transportation: 46 U.S.C. § 55103; 19 CFR 4.50(b) - United States International Trade Commision Rulings

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HQ H023102

March 10, 2008

VES-3-02:OT:RR:BSTC:CCI H023102 ALS

CATEGORY: CARRIER

Mr. Marcus Puttich
Biehl & Company, LP
Metrostar Plaza, Suite 203
190 Middlesex Turnpike
Iselin, New Jersey 08830

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

Dear Mr. Puttich:

This letter is in response to your request of February 11, 2008 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 BREMEN ("vessel"), from Washington, D.C. to Boston, Massachusetts and from New York, New York to Boston, Massachusetts, respectively. You state that one of the individuals will embark in Washington, D.C. on May 24, 2008, and the other will embark in New York on May 27, 2008, Both individuals will disembark in Boston on May 29, 2007. The individual embarking in New York will be conducting an “ISM [International Safety Management] and ISPS [International Ship Port Security]-Audit according to ISM-Code/ISPS-Code of SOLAS [Safety of Life at Sea]-convention.”

The individual embarking in Washington, D.C. “in his role as general manager” will be conducting “a customer satisfaction audit.” You also state that he “wants to gain a greater insight into port operations and authority functions at US ports to ensure smooth entry and exit at same and for further planning of voyages [including] US ports.” You further state that he will “meet with senior staff to evaluate customers’ feedback forms and to create a companywide report with comments/recommendations to improve cruise itineraries.”

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.

As noted above, you state that the individual embarking in New York will be conducting an “ISM [International Safety Management] and ISPS [International Ship Port Security]-Audit according to ISM-Code/ISPS-Code of SOLAS [Safety of Life at Sea]-convention. 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 individual who is embarking in New York 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 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."

With regard to the General Manager embarking in Washington D.C., we have ruled in a similar case involving customer service auditors. Within the meaning of 46 U.S.C. § 55103 and 19 CFR 4.50(b), CBP held that a customer service auditor is a passenger within the meaning of 46 U.S.C. § 55103. See CBP Ruling HQ H013701 (July 10, 2007). We have also held in CBP Rulings H008510 (March 22, 2007) and HQ H008513 (March 23, 2007) that shipping agency trainees transported aboard a vessel “to observ[e] daily life on a vessel and gain better insight about what their colleagues [that] work on a vessel actually do” or “observe what goes on during a vessel’s voyage” were passengers within the meaning of 46 U.S.C. § 55103 insofar as the trainees were not “directly and substantially” connected with the operation, navigation, ownership or business of the vessel itself.

While the General Manager’s onboard activities of conducting a “customer satisfaction audit,” gaining “a greater insight into port operations and authority functions at US ports,” and meeting “with senior staff to evaluate customers’ feedback forms and to create a companywide report with comments/recommendations to improve cruise itineraries” may foster the business of the company, it does not connect that individual directly and substantially with the business of the vessel itself. See HQ H013701, supra. Thus, to the extent that the General Manager would not 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, such individual would be considered a passenger within the meaning of 46 U.S.C. § 55103 and 19 CFR 4.50(b). See HQ H013701, supra.

We find that the proposed activities in this case of the individual embarking in New York are directly and substantially connected with the operation and business of the vessel. Therefore, we determine that such 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 would not be in violation of 46 U.S.C. § 55103. Conversely, we find that the proposed activities in this case of the individual embarking in Washington, D.C. are not directly and substantially connected with the operation and business of the vessel. Therefore, we determine that such individual is a "passenger" within the meaning of 46 U.S.C. § 55103 and 19 CFR 4.50(b). Accordingly, the coastwise transportation of such individual would be in violation of 46 U.S.C. § 55103.

HOLDING:

The individual embarking in New York is not a "passenger" within the meaning of 46 U.S.C. § 55103 and 19 CFR 4.50(b). Therefore, the coastwise transportation of such individual is not in violation of 46 U.S.C. § 55103.

The individual embarking in Washington, D.C. is a "passenger" within the meaning of 46 U.S.C. § 55103 and 19 CFR 4.50(b). Therefore, the coastwise transportation of such individual is in violation of 46 U.S.C. § 55103.

Sincerely,

Glen E. Vereb

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