HQ H027675 - Coastwise Transportation; 46 U.S.C. § 55103; 19 CFR § 4.50(b) - 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 > 2008 HQ Rulings > HQ H026026 - HQ H027675 > HQ H027675

Previous Ruling Next Ruling
HQ H027675

May 9, 2008

VES-3-02-OT:RR:BSTC:CCI H027675 GG

CATEGORY: CARRIER

Mr. Jim Martingale
Biehl & Co., L.P.
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. Martingale:

This is in response to your correspondence of May 6, 2008, in which you inquire about the coastwise transportation of two individuals. In addition, you submitted a supplemental request on May 7, 2008 with respect to two additional individuals on the same voyage. Our ruling on both requests with respect to all four individuals is set forth below.

FACTS

The voyage in question involves the transportation of the subject individuals aboard the non-coastwise-qualified vessel M/T JO SELJE (the “vessel”). The individuals will embark the vessel in Bayonne, New Jersey on May 9, 2008. You state that two of the individuals are surveyors and will be onboard the vessel to carry out annual surveys and “Condition Assessment Surveys” as required by the U.S. Coast Guard (USCG) to ensure the vessel is in proper working order. The surveys “require complete examination of tanks, machinery and general condition of the vessel,” which must be done while the vessel is underway. These two individuals will disembark the vessel in Houston, Texas, on or about May 16, 2008. You also state that the other two individuals are technicians, and need to be onboard the vessel to carry out the hands on work in conjunction with the aforementioned surveys. These two individuals may disembark in Houston, Texas, on May 16, 2008, or in New Orleans, Louisiana on May 23, 2008.

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.

You state that the subject individuals will be transported on the vessel for the purpose of conducting “annual surveys” and “Condition Assessment Surveys,” as required by the USCG, and carrying out the hands on work in conjunction with the surveys, to ensure that the vessel is in proper working order. The surveyors will conduct the examination of tanks, machinery and general condition of the vessel, and the technicians will perform work on the ballast tanks, machinery and other work on the vessel. You further state that the tanks can only be seen while the vessel is underway. 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 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.”

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 subject individuals described above 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 is not in violation of 46 U.S.C. § 55103.

Sincerely,

Glen E. Vereb

Previous Ruling Next Ruling