HQ H027452 - Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR § 4.50(b) - United States International Trade Commision Rulings

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HQ H027452

May 5, 2008

VES-3-02-OT:RR:BSTC:CCI H027452 GG

CATEGORY: CARRIER

Mr. Jesse Dizon
Quay Cruise Agencies U.S.A.
5901 Christie Ave., Suite 305
Emeryville, California 94608-1930

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

Dear Mr. Dizon:

This is in response to your correspondence of May 4, 2008, in which you inquire about the coastwise transportation of two individuals. Our ruling is set forth below.

FACTS

The voyage in question involves the transportation of the subject individuals aboard the non-coastwise-qualified vessel MILLENNIUM (the “vessel”), from San Francisco, California to Seattle, Washington during the period from May 5, 2008 to May 8, 2008. The purpose stated for the transportation of the individuals is to “assist in implementing the new program for the Photo Department.”

ISSUE

Whether the subject individuals described 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.

CBP has held that 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. However, CBP has also held that the mere carriage of technicians aboard a non-coastwise-qualified vessel is not a sufficient nexus to the vessel’s operation, navigation, ownership or business to conclude they are other than passengers within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). See HQ 113017 (February 2, 1994), citing Bureau Letter dated July 3, 1957, MA 212.

You state that the subject individuals are “entertainers” and will be transported on the vessel for the purpose of assisting “in implementing the new program for the Photo Department” and training the crew in same. Here, the stated purpose of transportation does not connect these two individuals directly and substantially with the business of the vessel itself. To the extent that these individuals are not 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) (see HQ 116721, supra; and see HQ 116659 (May 19, 2006), referencing the “direct and substantial” test).

Accordingly, we find that the proposed activity in this case is not directly and substantially connected with the operation and business of the vessel. Therefore, we determine that the subject individuals are “passengers” within the meaning of 46 U.S.C. § 55103 and 19 CFR § 4.50(b). Accordingly, the coastwise transportation of such individuals is in violation of 46 U.S.C. § 55103.

HOLDING

The subject individuals described above 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 in violation of 46 U.S.C. § 55103.

Sincerely,

Glen E. Vereb

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