HQ 111667: Coastwise Trade; Passengers; Travel Agents; 46 U.S.C. App.289

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 111667

                          June 19, 1991

VES-3-07-CO:R:IT:C 111667 GEV

CATEGORY:  Carriers

Mark E. Warren, Esq.
Gibson, Dunn & Crutcher
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036-5306

RE:  Coastwise Trade; Passengers; Travel Agents; 46 U.S.C.  App.
289

Dear Mr. Warren:

     This is in response to your letter dated May 1, 1991 (your
file no. C 72428-00124) requesting a ruling regarding the
interpretation of the coastwise laws as applied to the carriage
of nonpaying travel agents aboard a foreign-flag cruise ship for
the purpose of learning about the vessel in order to sell tickets
on future cruises.  Our ruling on this matter is set forth below.

FACTS:

     Princess Cruises, Inc. ("Princess") is a California
corporation based in Los Angeles.  Princess is a subsidiary of
The Peninsular and Oriental Steam Navigation Company, a United
Kingdom corporation.  The Princess fleet, which sails to 163
ports on six continents, is one of the largest in the world. 
Princess' newest ship, REGAL PRINCESS, is currently undergoing
sea trials after which she will be based in Port Everglades,
Florida for seven day Caribbean cruises.

     Princess will christen the Italian-flag REGAL PRINCESS in
August, 1991.  Following the christening, Princess would like to
have a group of 1400 travel agents on board the ship for a two
day familiarization cruise during August 13-15, 1991.  The travel
agents would embark in Baltimore, Maryland, and disembark in Port
Everglades, Florida.  They would not pay any consideration for
the cruise, but would travel at the expense of Princess in order
that they learn and experience first hand the on board product of
Princess to enable them to better sell and market cruises on the
REGAL PRINCESS.  
                              - 2 -

ISSUE:

     Whether travel agents transported on a foreign-flag vessel
free of charge between United States points for promotional
purposes are "passengers" for purposes of 46 U.S.C. App. 289.

LAW AND ANALYSIS:

     The passenger coastwise law, 46 U.S.C. App. 289, 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.

     The Customs Service has consistently interpreted this
proscription to apply to any vessel except a United States-
built, owned, and properly documented vessel (see 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."  The connection must be direct and immediate, not a
remote or hypothetical connection or a connection related only to
future voyages.

     The Customs Service has long-held that while travel agents
may be tangentially connected with the business of a vessel in
that they may better sell and promote future travel on that
vessel, they are not directly enough connected with the business
of the vessel to be classified as other than passengers as
defined in 19 CFR 4.50(b), whether or not they are charged a
fare. (ruling letters dated April 3, 1958 (MA 216.131) and August
29, 1960 (MA 217.1))  The connection of such persons to the
vessel is questionably closer than their connection to vessels of
other lines which offer cruises to the public.  It should be
noted, however, that travel agents who are employed by the
corporation that owns the vessel and whose duties require an on
board presence (e.g., to assist a specific group of passengers)
would possess a sufficiently direct and immediate nexus to the
vessel's business so as not to be considered passengers for
purposes of section 289.  

     Accordingly, the travel agents in question who would be on
the proposed two day familiarization cruise in order to
experience the subject vessel's state-of-the-art amenities so  - 3 -

that they may promote future travel on the vessel are considered
passengers for purposes of section 289.  Therefore their proposed
transportation from Baltimore to Port Everglades on the REGAL
PRINCESS would be prohibited.

HOLDING:

     Travel agents transported on a foreign-flag vessel free of
charge between United States points for promotional purposes are
"passengers" for purposes of 46 U.S.C. App. 289 therefore such
transportation is prohibited.

                              Sincerely,




                              B. James Fritz
                              Chief