VES-3-02 CO:R:P:C 109685 PH
Francis H. McNamara, Esq.
Cardillo & Corbett
29 Broadway
New York, New York 10006
RE: Application of the coastwise passenger law to transportation
between points in the United States in non-coastwise-qualified
cargo vessels or freighters of certain persons who are
transported without charge.
Dear Mr. McNamara:
This is in response to your letter of August 4, 1988, in
which you request a ruling on the applicability of the coastwise
passenger law to certain transportation in cargo vessels or
freighters. You state that your client in this matter is Sea The
Difference Inc. (STD), a New York corporation.
FACTS:
You state that your client has contracted with Mediterranean
Shipping Company S.A. (MSC) to market travel by paying passengers
on board freighters which sail in the MSC containership service
between the United States East Coast and Western European ports.
STD is not owned in any part by MSC. The vessels, all of which
are documented under a foreign flag, have accommodations for up
to 12 passengers. You state that STD, as part of its marketing
responsibilities, is concerned with the suitability of the
vessels' passenger spaces and services. Specifically, STD has
become closely involved in approval and general supervision of
such on-board matters as cleanliness, refurbishment, allocation
and quality of service personnel, food quality, appearance of
public areas, etc.
You state that STD anticipates that in the course of its
marketing functions, STD employees will need to travel on the
vessels between United States ports in connection with the
passenger business of the vessels. The reason such STD
employees will need to be on the vessels is, you state, that
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"[c]onferences must be held with ship's personnel,
renovation/refurbishment must be inspected, paying passengers,
VIP's and other travel agents or travel writers must sometimes be
accompanied for the first day or two of a foreign cruise, etc."
Generally, as you put it, "STD employees will often have to sail
with the vessels to attend to business but their presence on
board will not be required for the Atlantic crossing." These STD
employees will be transported without charge.
STD also proposes to transport, without charge, travel agents
and travel writers between United States ports. The purposes of
such transportation will be to encourage the travel agents to
promote the MSC passenger service and to encourage the travel
writers to report favorably on the MSC service. You state that
because the MSC vessels do not have many of the facilities and
attractions of full scale passenger vessels, it is anticipated
that these complimentary cruises will often be limited to a
coastwise trip which, you believe, will be sufficient to allow
the involved professionals to judge the product.
ISSUES:
(1) Are employees of a corporation, which has been
contracted by a vessel operator to market trans-Atlantic travel
by paying passengers on board the foreign-flag freighters of the
vessel operator, "passengers" for purposes of 46 U.S.C. App. 289
when they are transported between United States points in such
vessels free of charge in connection with the passenger business
of the vessel?
(2) Are travel agents and travel writers transported in
foreign-flag vessels free of charge between United States points
for promotional purposes "passengers" for purposes of 46 U.S.C.
App. 289?
LAW AND ANALYSIS:
The Act of June 19, 1886, as amended (24 Stat. 81; 46 U.S.C.
App. 289, sometimes called the coastwise passenger law), provides
that:
No foreign vessel shall transport passengers between
ports or places in the United States either directly or
by way of a foreign port, under a penalty of $200 for
each passenger so transported and landed.
For your general information, we have consistently
interpreted this proscription to apply to any vessel except a
United States-built, owned, and properly documented vessel (see
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46 U.S.C. 12106 and 12110, 46 U.S.C. App. 883, and 19 CFR
4.80(a)). Pursuant to section 4.50(b) of the Customs Regulations
(19 CFR 4.50(b), the word "passenger," for purposes of this
provision, is defined as "... any person carried on a vessel who
is not connected with the operation of such vessel, her
navigation, ownership, or business."
On the basis of the foregoing, STD employees transported free
of charge on an MSC vessel would not be considered to be passen-
gers, for purposes of section 289, if they are genuinely connect-
ed with the passenger business of the vessel. If the STD employ-
ees are on the vessel for the purposes you describe, they would
be considered to be connected with the passenger business of the
vessel.
Customs has consistently held that travel agents and
newspaper reporters and other writers who accompany a vessel for
publicity purposes and cruise passenger sale promotion are not
persons connected with the operation, navigation, ownership, or
business of the vessel within the meaning of 19 CFR 4.50(b),
whether or not they are charged a fare. Accordingly, the travel
agents and travel writers you describe would be considered
passengers, for purposes of section 289, and their transportation
between United States points in the foreign-flag vessels under
consideration would be prohibited.
HOLDINGS:
(1) Employees of a corporation, which has been contracted by
a vessel operator to market trans-Atlantic travel by paying
passengers on board the foreign-flag freighters of the vessel op-
erator, are not "passengers" for purposes of 46 U.S.C. App. 289
when they are transported between United States points in such
vessels free of charge, if they are genuinely connected with the
passenger business of the vessel.
(2) Travel agents and travel writers transported in foreign-
flag vessels free of charge between United States points for pro-
motional purposes are "passengers" for purposes of 46 U.S.C. App.
289 and such transportation is prohibited.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch