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HQ 116721

September 25, 2006

VES-3-02-RR:BSTC:CCI 116721 rb


Andrew Murphy
Dutch Harbor Services Inc.
P.O. Box 920785
Dutch Harbor, AK 99692

RE: Coastwise transportation; Stevedores; Passenger Vessel Services Act; 46 U.S.C. App. 289

Dear Mr. Murphy:

On September 5, 2006, you electronically transmitted a request that foreign-flagged vessels be allowed to transport stevedores from Dutch Harbor to Akutan, Alaska, under certain circumstances. You indicated in your request that local CBP (Customs and Border Protection) field offices do not have authority to issue decisions in this matter. Our ruling on your request follows.


Akutan, a small island in the State of Alaska, located about 50 miles from Dutch Harbor, cannot support a year-round stevedore labor pool. Thus, weather permitting, stevedores, when needed, are mainly conveyed to Akutan by seaplane. Employing a vessel, such as a small charter boat or fishing vessel, as an alternative means of transportation, can be difficult and dangerous. As a result, stevedore companies would prefer, in such circumstances, to have the much larger foreign-flagged vessel itself, that is to be loaded at Akutan, carry the stevedores from Dutch Harbor, Alaska, to Akutan for this purpose. There would be no charge by the foreign carrier for transporting the stevedores to Akutan and thereafter back to Dutch Harbor.


Whether the transportation of the stevedores by a foreign vessel as described would be in violation of the coastwise passenger statute, 46 U.S.C. App. 289.


The Passenger Vessel Services Act, also known as the coastwise passenger statute, 46 U.S.C. App. 289, provides that no foreign vessel may transport passengers between ports or places in the United States either directly or by way of a foreign port, upon a penalty of $300 for every passenger so transported and landed (see 19 CFR 4.80(b), adjusting the penalty to $300 pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990).

In applying the coastwise laws, Customs (now Customs and Border Protection (CBP)) has ruled that a point in United States territorial waters is considered a point embraced within the coastwise laws; and that the coastwise laws typically apply to points in the territorial sea, defined as the belt, three (3) nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline, in cases where the baseline and coastline differ (T.D. 78-440). Hence, the coastwise laws would embrace “points on a river in the United States” (C.S.D. 84-15), “the internal waters of a State” (ibid.), as well as “points within a harbor” (19 CFR 4.80(a)). This being so, the contemplated transportation in this case from Dutch Harbor to Akutan Island, within the State of Alaska, would be coastwise in nature.

For purposes of section 289 (see 19 CFR 4.80a(a)(5)), a “passenger” is “any person carried on a vessel who is not connected with the operation of such vessel, her navigation, ownership, or business” (19 CFR 4.50(b)). And, in keeping with the protectionist nature of section 289, CBP imposes a strict interpretation as to the meaning of “passenger” under § 4.50(b).

Accordingly, given the clear language of § 4.50(b), “[p]ersons carried on a vessel may be classified as passengers even though they are not carried for hire and though they are employed by or for the benefit of the [vessel] owner or operator” (Headquarters (HQ) ruling 101699, dated November 5, 1975 (as to whether certain personnel employed by a vessel carrier or performing services for the carrier, who were transported aboard the carrier’s vessels, were passengers under section 289)). Toward this end, as explained in HQ 101699: “In accordance with previous Headquarters rulings, workmen, technicians, or observers transported by vessel between ports of the United States are not classified as ‘passengers’ within the meaning of section 4.50(b) and section 289 if they are required to be on board to contribute to the accomplishment of the operation or navigation of the vessel during the voyage or are on board because of a necessary vessel ownership or business interest during the voyage” (emphasis added). Accord, HQ 103410 dated May 5, 1978.

Additionally, in concert with the foregoing, “[p]ersons who are on board a vessel solely to perform functions after the vessel’s arrival at its destination have consistently been held to be passengers within the meaning of section 4.50(b)” (HQ 104260, of October 16, 1979 (emphasis added)). Accord, HQ 103318 of April 5, 1978; HQ 105761 of August 27, 1982.

Consequently, in the present instance, the subject stevedores would be aboard the foreign vessel for reasons unrelated to any business interest of the vessel itself during the voyage from Dutch Harbor to Akutan. Rather, the essential purpose of the stevedores’ coastwise transportation in this regard would be realized after the vessel’s arrival at its destination (Akutan), where the stevedores would disembark and there function as shore-based personnel involved in lading cargo aboard the vessel. As such, the stevedores would quite plainly be transported aboard the foreign vessel in these circumstances as passengers within the meaning of § 4.50(b).

Furthermore, there are no criteria which would render permissible a coastwise transportation by a foreign-flagged vessel where no coastwise-qualified American vessel is available. Pursuant to the Act of December 27, 1950 (64 Stat. 1120; note preceding 46 U.S.C. App. 1), Congress has only authorized the administrative waiver of the restrictions against a foreign vessel engaging in the coastwise trade when deemed necessary in the interest of national defense.

Also, parenthetically, it is observed that CBP Headquarters, Office of Regulations and Rulings, Cargo Security, Carriers, & Immigration Branch (successor to the Entry Procedures and Carriers Branch) is the office solely authorized to issue written decisions (rulings) under section 289 that are legally binding on the agency (see 19 CFR 4.80a(d); and see 19 CFR 177.1(d)(1) and 177.2(a) & (b)(2)(iv)). Notably, this protocol was recently and routinely reiterated as well in HQ 116659 of May 19, 2006.


The requested transportation of the stevedores by a foreign vessel as described herein would be in violation of the coastwise passenger statute, 46 U.S.C. App. 289.


Glen E. Vereb

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