HQ 109685: 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.

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 109685

                                  November 23, 1988


          VES-3-02 CO:R:P:C  109685 PH

          CATEGORY:  Carriers

          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