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

HQ H043942 November 12, 2008 VES-3-02-OT:RR:BSTC:CCI H043942 JLB CATEGORY: Carriers Mr. Lawren Wolf T. Parker Host, Inc. 500 Plume Street East Suite 600 Norfolk, Virginia 23510 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b) Dear Mr. Wolf: This letter is in response to your correspondence dated November 11, 2008, in which you request a ruling on whether the coastwise transportation of the individuals mentioned therein aboard the M/T KVARVEN 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 individuals aboard the non-coastwise-qualified M/T KVARVEN (“the vessel”). The two individuals will embark on November 15, 2008 at Chesapeake, Virginia and will disembark at the port of Wilmington, North Carolina on November 20, 2008. The individuals will travel aboard the vessel to perform an internal audit. This audit will include meeting with the master and the chief engineer of the vessel to discuss crew appraisal reports, crew performance, attitude and behavior. Then the individuals will meet with the crew members individually to motivate them accordingly by identifying areas of improvement and recommending any training necessary as well as to assist with any administrative problems and resolve any disputes including regular payment of wages, salary remittances and allocations. This audit will also include observing the maintenance of the vessel and writing tour reports of the vessel visit for the owners including any suggestions for improvement. ISSUE Whether the individuals described above would be “passengers” 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 Ruling Letter 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 Ruling Letter 116721, dated September 25, 2006. In the present case, the two individuals would be traveling aboard the non-coastwise-qualified vessel to perform an internal audit. Under the facts presented, the individuals would be “directly and substantially” related to the operation and business of the vessel during the voyage and would not be considered “passengers” under 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Consequently, the coastwise transportation of the subject individuals is not in violation of 46 U.S.C. § 55103. HOLDING The subject individuals are not “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Therefore, the coastwise transportation of such individuals is not in violation of 46 U.S.C. § 55103. Sincerely, Glen E. Vereb, Chief Cargo Security, Carriers and Immigration Branch