VES-3-02/07-CO:R:IT:C 111628 BEW

Mr. Gary K. Santos
The EMBA Group, Inc.
Post Office Box 1428
Charleston, South Carolina 29402

RE: Coastwise Trade; Passengers; Transportation of Employees, Spouses or Business Guest from One Coastwise Port to Another Coastwise Port on a Foreign-Flag Vessel; 46 U.S.C. App. 289;

Dear Mr. Santos:

This is in response to your letter dated April 8, 1991, requesting a ruling on behalf of Royal Viking Line concerning the application of the Jones Act to a proposed trip from Charleston, South Carolina, to Williamsburg, Virginia, on a foreign flag vessel as set forth below.


In a letter dated April 4, 1991, from Royal Viking Line to you, they state that on April 27, 1991, the ROYAL VIKING SUN will be calling at the port of Charleston, South Carolina. They state they are planning to invite approximately sixty (60) Royal Viking Line employees, their spouses, and various company affiliates to board the vessel on April 27, 1991, at the port of Charleston and sail to Williamsburg, Virginia, where the passengers will disembark from the vessel. They state that the purpose of this trip is to further enhance employee product knowledge. They state the all of the passengers will be sailing as "NON-FARE PAYING PASSENGERS ON COMPANY BUSINESS".


Whether the transportation of passengers on a foreign-flag vessel as described above constitutes a violation of 46 U.S.C. App. 289.


Generally, the coastwise laws (e.g., 46 U.S.C. App. 289 and 883, and 46 U.S.C. 12106 and 12110) prohibit the transportation of merchandise or passengers between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in and documented under the laws of the United States, and owned by persons who are citizens of the United States.

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 penalty of $200 for each passenger so transported and landed.

In its administration of 46 U.S.C. App. 289, the Customs Service has ruled that the carriage of passengers entirely within territorial waters, even though the passengers disembark at their point of embarkation and the vessel touches no other coastwise point, is considered coastwise trade subject to coastwise laws. However, the transportation of passengers to the high seas (i.e., beyond U.S. territorial waters) and back to the point of embarkation, assuming the passengers do not go ashore, even temporarily, at another United States point, often called a "voyage to nowhere", is not considered coastwise trade. It should be noted that the carriage of fishing parties for hire, even if the vessel proceeds beyond territorial waters and returns to the point of the passenger's embarkation, is considered coastwise trade.

For purposes of the coastwise laws, a vessel "passenger" is defined as "... any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business" (Section 4.50(b), Customs Regulations).

With regard to commercial vessels, in a letter dated August 29, 1960 (MA 217.1) Customs has ruled that:

...newspapermen or cruise agents who merely accompany the vessel for publicity purposes and cruise passage sales promotion are not persons connected with the operation, navigation, ownership, or business of the vessel within the meaning of section 4.50(b)

of the Customs Regulations. The activity of the persons involved is only remotely or indirectly connected with the operation, or business of the vessel rather than direct and immediate as is contemplated by the regulations.

In the subject case the ROYAL VIKING SUN is a commercial vessel used in the cruise industry, and the subject persons, are employees, their spouses, and company affiliates. Section 4.80a(b)(1) of the Customs Regulations (19 CFR 4.80a(b)(1) provides that:

If a passenger is on a voyage solely to one or more coastwise ports and the passenger disembarks or goes ashore temporarily at a coastwise port, there is a violation of the coastwise law.

Section 4.50(b) exempts persons connected with the business of a vessel from passenger status.

With regard to the employees of the vessel company, the facts presented are not sufficient to show that they are connected with the actual operation, navigation, ownership, or business of the vessel within the meaning of section 4.50 (b) of the Customs Regulations. While employees who are directly or immediately connected with the vessel's operation, navigation, ownership, or business may be exempt from passenger status under section 4.50(b), employees who are indirectly or remotely connected with the business of the vessel, such as those whose connection with the vessel does not go beyond being employed by the corporation that owns the ship, would not be exempt from passenger status.

The phrase "to further enhance employee product knowledge" explains neither what knowledge it is intended that the employees gain, nor how that knowledge has a nexus with the actual business or operation of the vessel. The same is true of the employees' families and the "company affiliates."


The facts are not sufficient to show that the subject employees of the Royal Viking Line, nor their families, nor company affiliates are directly connected with the operation, navigation, ownership, or business of the vessel. Mere employment by a corporation that is involved in the transportation industry is not tantamount to being engaged in the "business" of a vessel. The request to transport the subject persons is denied; they are considered passengers for the purposes of 46 U.S.C. App. 289.


Stuart P. Seidel
International Trade
Compliance Division Branch