VES 3-02-OT:RR:BSTC:CCR HQ H268972 WRB
Mr. Patrick Connor
John S. Connor, Inc.
799 Cromwell Park Drive
Suite A
Glen Burnie, MD 21061
RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b).
Dear Mr. Connor:
This is in response to your correspondence of September 18, 2015, in which you inquire about the coastwise transportation of the two individuals mentioned therein aboard the M/V RESPONDER. Our decision follows.
FACTS
The voyage in question involves the transportation of the subject individuals aboard the non-coastwise-qualified M/V RESPONDER (“the vessel”). The individuals will embark the vessel in Baltimore, Maryland, on or about September 22, 2015, and will disembark in Newington, New Hampshire, on or about September 28, 2015. The individuals would be carried onboard to conduct a shipboard payroll audit, including verifying payroll crew ratings against seaman documentation, verifying ship activity type entries in the payroll system and duties assigned, auditing wage payment processes and documentation retention, and processes for sign-off and sign-on, while the vessel is underway.
ISSUE
Whether the individuals described in the FACTS section are “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 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 which provides:
(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 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) of the Customs and Border Protection (“CBP”) Regulations provide:
A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of the vessel, her navigation, ownership, or business.
In the present case, you state that the subject individuals would be carried onboard to conduct a shipboard payroll audit, including verifying payroll crew ratings against seaman documentation, verifying ship activity type entries in the payroll system and duties assigned, auditing wage payment processes and documentation retention, and processes for sign-off and sign-on, while the vessel is underway. 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 C.F.R. § 4.50(b), if they are required to be onboard to contribute to the accomplishment of the operation or navigation of the vessel during the voyage or are onboard because of a necessary vessel ownership or business interest during the voyage. HQ 101699 (Nov. 5, 1975); see HQ 116721 (Sept. 25, 2006)(quoting HQ 101699). Furthermore, the shipboard activities engaged in by such aforementioned individuals while traveling on a non-coastwise-qualified vessel between coastwise ports must be “directly and substantially” related to the operation, navigation, ownership, or business of the vessel itself in order for such individuals to not be considered as passengers under these provisions of law.
In the present case, we find that the proposed activities described in your request would be directly and substantially connected to the operation, navigation, ownership, or business of the vessel and we therefore determine that the subject individuals are not “passengers” within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b). Accordingly, the coastwise transportation of the individuals in question would not be in violation of 46 U.S.C. § 55103.
HOLDING
The individuals described in the FACTS section above 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 would not be in violation of 46 U.S.C. § 55103.
Sincerely,
Lisa L. Burley
Chief/Supervisory Attorney-Advisor
Cargo Security, Carriers and Restricted Merchandise Branch
Office of International Trade, Regulations and Rulings