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HQ H027966

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May 13, 2008

VES-3-02-OT:RR:BSTC:CCI H027966 JLB

CATEGORY: CARRIER

Ms. Toni Medina
APM Terminals
2500 Navy Way
Terminal Island, California 90731

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

Dear Ms. Medina:

This letter is in response to your correspondence dated May 9, 2008, in which you request a ruling on whether the coastwise transportation of the individual mentioned therein aboard the SEALAND COMET constitutes a violation of 46 U.S.C. § 55103. Our ruling on your request follows.

FACTS

The voyage in question involves the transportation of the subject individual aboard the non-coastwise-qualified SEALAND COMET (“the vessel”). The individual will embark on May 13, 2008 at Los Angeles, California and will disembark at the port of Oakland, California on or about May 18, 2008. The individual, a Maersk Line shoreside employee, specially, the assistant operations manager, will travel aboard the vessel to develop a better relationship between APL Terminals (Maersk owned companies) and Maersk Line by observing the vessel crew’s responsibilities once the cargo has been loaded, discussing with the crew the challenges the terminals face when loading and discharging cargo, and conferring with the vessel’s crew about their concerns and recommendations.

ISSUE

Whether the individual described above would be a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b)?

LAW AND ANALYSIS

The coastwise passenger statute, former 46 U.S.C. App. § 289 recodified as 46 U.S.C. § 55103, pursuant to P.L. 109-304 (October 6, 2006), states that no foreign vessel shall transport passengers “between ports or places in the United States to which the coastwise laws apply, either directly or by way of a foreign port,” under a penalty of $300 for each passenger so transported and landed. See also 19 C.F.R. § 4.80(b)(2). 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.

Under 46 U.S.C. § 55103, a “passenger” is any person carried aboard a vessel “who is not connected with the operation of the vessel, her navigation, ownership, or business.” See also 19 C.F.R. § 4.50(b). In this regard, U.S. Customs and Border Protection (“CBP”) provides a strict interpretation of “passenger” defining the term as persons transported on a vessel unless they are "directly and substantially" connected with the operation, navigation, ownership or business of that vessel itself. See Customs Bulletin of June 5, 2002, Vol. 36, No. 23, at pp. 50. Pursuant to Headquarters Decision 101699, dated November 5, 1975, it is well settled that "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 section 289 [now section 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." See also Headquarters Decision 116721, dated September 25, 2006.

In Headquarters Ruling Letter H004175, dated December 8, 2006, CBP held that two shoreside terminal operations managers traveling aboard a non-coastwise-qualified vessel to observe and understand the crew’s responsibilities and foster a better relationship between Maersk Line and APM Terminals were not passengers within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b) and, therefore, their coastwise transportation was not in violation of 46 U.S.C. § 55103. CBP has recently recognized, however, that H004175 is contrary to CBP decisions which interpret 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b) in that the subject individuals are not “directly and substantially” connected with the operation, navigation, ownership or business of that vessel itself and accordingly, in Headquarters Ruling Letter H019524, dated April 4, 2008, revoked the aforementioned ruling. See Customs Bulletin of April 23, 2008, Vol. 42, No. 18, at pp. 21. Consequently, when this revocation is effective as of June 22, 2008, these observers will be considered passengers within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b) and, therefore, their coastwise transportation will be in violation of 46 U.S.C. § 55103.

Given that the revocation of Headquarters Ruling Letter H004175 has yet to take effect, the subject individual would not be considered a “passenger” under 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Consequently, the coastwise transportation of the subject individual is not in violation of 46 U.S.C. § 55103.

HOLDING

The subject individual is not a “passenger” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Therefore, the coastwise transportation of such an individual is not in violation of 46 U.S.C. § 55103.

Sincerely,

Glen E. Vereb, Chief

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