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

HQ H045778 December 11, 2008 VES-3-02-OT:RR:BSTC:CCI H045778 JLB CATEGORY: Carriers Commander M.J. McCadden U.S. Coast Guard Chief, Prevention Department 1519 Alaskan Way South Seattle, Washington 98134-1192 RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b) Dear Commander McCadden: This letter is in response to your correspondence dated November 6, 2008, in which you request a ruling on whether a non-coastwise-qualified vessel may be utilized as a training platform without violating 46 U.S.C. § 55103. Our ruling on your request follows. FACTS Cap Sante International Inc. is an organization operating out of Anacortes, Washington. The company wishes to utilize an undocumented, foreign-built, 6.5 meter, rigid hull inflatable Fast Rescue Boat as a training platform at their Fast Rescue Boat School course. In order to participate in the course, the merchant mariners would be required to pay a fee. The vessel would operate solely within the U.S. territorial waters of Fildago Bay, Washington. ISSUE Whether the use of a non-coastwise-qualified vessel as described above constitutes an engagement in coastwise trade in violation of 46 U.S.C. § 55103? 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. CBP has held that a person being trained or receiving instruction in the handling or navigation of a vessel, and whose presence on board the vessel is required in order to receive such training or instruction, is not a "passenger." Consequently, while the vessel is used for such training, it need not be documented to engage in the coastwise trade. See Headquarters Ruling Letter 114263, dated March 3, 1998; Headquarters Ruling Letter 112479, dated January 6, 1993; see also Headquarters Ruling Letter 111021, dated August 28, 1990; Headquarters Ruling Letter HQ 111212, dated November 15, 1990. The individual is not a “passenger” regardless of whether a fee is charged for the training program. See Headquarters Ruling Letter 114283, dated March 27, 1998. Accordingly, the use of the subject non-coastwise-qualified vessel as a training platform is not in violation of 46 U.S.C. § 55103. All persons being transported on the vessel must receive the training or instruction as described above. While fee payment alone is not dispositive in determining whether an individual is a “passenger” for purposes of 46 U.S.C. § 55103, it should also be noted that a person who is carried on board such a vessel for recreational purposes and who pays a fee for such carriage would be considered a "passenger" and his carriage between places in the United States or entirely within U.S. waters would be in violation of 46 U.S.C. § 55103. See Headquarters Ruling Letter 113515, dated August 3, 1995.   HOLDING The use of a non-coastwise-qualified vessel as described above does not constitute an engagement in coastwise trade in violation of 46 U.S.C. § 55103. Sincerely, Glen E. Vereb, Chief Cargo Security, Carriers and Immigration Branch