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HQ 111667

June 19, 1991

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


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.


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.


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.


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.


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.


B. James Fritz

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