# HQ H019729

November 16, 2007

**VES-3-02-OT:RR:BSTC:CCI** H019729 LLB

**CATEGORY**: Carriers

Mr. Ernie Esparza

Western Overseas Corporation

P.O. Box 90099

Long Beach, California 90809

RE: Coastwise Transportation; 46 U.S.C. § 55103; 19 C.F.R. § 4.50(b);
employee; investor; HQ H008510 (Mar. 22, 2007); HQ H008513 (Mar. 23,
2007); HQ H010696 (May 9, 2007); HQ H010662 (May 9, 2007); HQ H013452
(June 29, 2007); HQ H013701 (July 10, 2007)

Dear Mr. Esparza:

This letter is in response to your correspondence dated November 12 and
15, 2007, on behalf of your client Hyundai Merchant Marine (America),
Inc. (HMM). In your correspondence, you inquire about the coastwise
transportation of a shipping company employee and a credit appraiser
aboard the HYUNDAI HIGHNESS. Our decision follows.

## FACTS

The voyage in question involves the transportation of the subject
individuals, an employee of HMM and a credit appraiser aboard the
non-coastwise-qualified HYUNDAI HIGHNESS (the "vessel") from Long Beach,
California to Oakland, California. The individuals are expected to
embark in Long Beach on November 18, 2007 and disembark in Oakland on
November 19, 2007. The HMM employee will be transported aboard the
vessel to escort the credit appraiser, who will be transported for the
purpose of being "briefed on \[HMM\] terminal operations to include
expectations for the upcoming ILWU negotiations, strike contingency
plans, and terminal development \[ . . . and\] will review \[HMM\]
vessel operations with the intent of evaluating the general condition of
the vessel and crew."

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## ISSUE

Whether the individuals described in the FACTS section above 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. [See]{.underline} 33 C.F.R. §
2.22(a)(2). The coastwise law applicable to the carriage of passengers
is found in 46 U.S.C. § 55103[^1] 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 traffic;
>
> \(2\) 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.

The Customs and Border Protection ("CBP") Regulations, promulgated under
the authority of 46 U.S.C. § 55103, 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.

19 C.F.R. § 4.50(b).

In HQ H008510 (Mar. 22, 2007) and HQ H008513 (Mar. 23, 2007), CBP held
that shipping agency trainees transported aboard a vessel "to
observ\[e\] daily life on a vessel and gain\[\] better insight about
what their colleagues \[that\] work\[\] on a vessel actually do" or
"observe what goes on during a vessel's voyage" were passengers within
the meaning of 46 U.S.C. § 55103 insofar as the trainees were not
"directly and substantially" [^2] connected with the operation,
navigation, ownership or business of the vessel itself.
[See]{.underline} [also]{.underline}, e.g., HQ H010696 (May 9, 2007) and
HQ H010662 (May 9, 2007) (shipping agencies' human resources manager and
ship broker's trainee); HQ H013452 (June 29, 2007) (stevedore); HQ
H013701 (July 10, 2007) (customer service auditors and sales
representatives); H0118186 (Oct. 11, 2007) (shoreside operations
assistant).

Similarly, in the present case, you propose to transport a credit
appraiser to be briefed on \[HMM\] terminal operations to include
expectations for the upcoming ILWU negotiations, strike contingency
plans, and terminal development \[ . . . and\] will review \[HMM\]
vessel operations with the intent of evaluating the general condition of
the vessel and crew." First, the briefing relating to terminal
operations and development does not connect the subject individual
"directly and substantially" with the operation, navigation, ownership
or business of the vessel itself.

Second, although familiarizing a credit appraiser with vessel operations
may foster the business of the shipping company, it does not connect
this individual directly and substantially with the business of the
vessel *itself.* To the extent that the subject individual would not
have been engaged in any shipboard activities while traveling on the
foreign vessel between coastwise ports, that would be "directly and
substantially" related to the operation, navigation, or business of the
vessel itself, such individual would be considered a passenger within
the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b).

Last we note, the HMM employee who will be merely escorting the credit
appraiser, does not connect such individual directly and substantially
with the operation, navigation, ownership or business of the vessel
itself, as such this individual would also be considered a passenger
within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. § 4.50(b).

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## HOLDING

The HMM employee and the credit appraiser, as described above, are
"passengers" within the meaning of 46 U.S.C. § 55103 and 19 C.F.R. §
4.50(b). Therefore, the coastwise transportation of those individuals
would be in violation of 46 U.S.C. § 55103.

Sincerely,

Glen E. Vereb

Chief

Cargo Security, Carriers and Immigration Branch

[^1]: Recodified by Pub. L. 109-304, enacted on October 6, 2006.

[^2]: [See]{.underline} HQ 116721, [supra]{.underline};
    [and]{.underline} [see]{.underline} HQ 116659 (May 19, 2006)
    (referencing the "direct and substantial" test).