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HQ H002925

November 8, 2006

VES-3-02-RR:BSTC:CCI H002925 rb


LeVar O. Kennings
Manager, Port Operations
Norwegian Cruise Line
7665 Corporate Center Drive
Miami, FL 33126

RE: Coastwise transportation; Key-accounts representative; Passenger status; 46 U.S.C. App. 289; 19 CFR 4.50(b)

Dear Mr. Kennings:

In your October 24, 2006, letter, you request that an employee of your cruise line, a key-accounts representative, be allowed to travel coastwise aboard your foreign-flagged vessel, M/S NORWEGIAN DAWN, from New York, NY, on November 12, 2006, to Port Canaveral, FL, the port of disembarkation, on November 14, 2006. Our ruling in response to your request follows.


A key-accounts representative employed by a cruise line would be transported aboard its foreign-flagged cruise vessel from New York, NY, on November 12, 2006, to Port Canaveral, FL, on November 14, 2006, where the accounts representative would disembark. The cruise line has stated that the key-accounts representative would be traveling aboard the vessel for the purpose of “escorting a seminar at sea group that will be sailing from New York...This trip specifically will be to educate travel agents and industry professionals about our product during the transit.”


Whether the key-accounts representative would be considered a passenger under 46 U.S.C. App. 289.


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).

Under section 289 (see 19 CFR 4.80a(a)(5)), a “passenger” is any person carried aboard a vessel who is not connected with the operation of the vessel, her navigation, ownership, or business (19 CFR 4.50(b)).

Consistent with the protectionist nature of section 289 (see Headquarters ruling (HQ) 116630, of March 27, 2006), a legal notice published in the June 5, 2002, Customs Bulletin (Vol. 36, No. 23, p.50), imposed a circumscribed construction upon the meaning of the term “passenger.” Under this notice, persons transported on a vessel will be considered passengers unless they are “directly and substantially” connected with the operation, navigation, ownership or business of that vessel itself. See also HQ 110967, of April 12, 1990, explaining that persons on commercial (non-pleasure) vessels are considered passengers unless they enjoy some status which ties them “intimately” to the operation, navigation, ownership or business of the vessel itself. Notably, the June 5, 2002, Customs Bulletin notice “is intended to cover any ruling that pertains to whether persons transported on vessels are considered passengers under 19 CFR 4.50(b)” and section 289 (supra, at p.54) (emphasis added). Thus, the notice would operate to revoke any rulings, whether or not expressly identified therein, that are inconsistent with its position on the meaning of the term “passenger” (ibid., pp. 50, 54).

Cruise Sales Promotion/Publicity; Travel Agents

Initially, by way of background, in Bureau Letter dated April 3, 1958 (MA 216.131), which concerned a meeting of the American Society of Travel Agents aboard a foreign-flagged vessel while moving from New York to Boston, the society suggested that their members making this trip be considered other than passengers, “since the purpose of their trip [was] to see the ship, experience its service, and better equip them to sell the services of the vessel for foreign cruises out of Boston.”

However, as concluded in the April 3, 1958, Bureau Letter, supra, “the fact that the involved transportation of the society members would better educate them for the promotion of foreign tourism would not connect them with the vessel’s operation, navigation, ownership, or business to such an extent as to justify an administrative ruling that the members were not passengers for the purposes of section 289." Accord, HQ 108184, of March 19, 1986 (“while travel agents may be tangentially connected with the business of a vessel, in that they may encourage future travel on that vessel, they are not directly enough connected with the business of the vessel to be classified as other than passengers”); and Bureau Letter of August 29, 1960 (MA 217.1) (finding that newspapermen or cruise agents who travel with a vessel to better equip them for future cruise passage sales promotion were passengers, notwithstanding the assertion that “such sales are basic to the vessel’s business;” such promotional activity was held to be “only remotely or indirectly connected with the operation or business of the vessel [itself] rather than direct and immediate as is contemplated by the regulations”).

Cruise Sales Promotion/Publicity; Cruise Line Employees

Consequently, along these same lines, in HQ 111628, of April 26, 1991, where it was decided that the employees of a major cruise line would be passengers if transported aboard its vessel “to further enhance employee product knowledge,” it was quite implicit therein “that if the employees...were carried aboard [the cruise line’s] vessel to engage in activities related to promoting cruise passage sales, they would likewise be passengers in such circumstances, given that HQ 111628 favorably cited and discussed Bureau Letter dated August 29, 1960, supra, as to newsmen and independent cruise agents in this same regard” (HQ 116668, of July 25, 2006, affirming HQ 116659, of May 19, 2006, in finding that independent contractors and cruise line employees were passengers when attending a “Global Strategy Summit” while being transported coastwise aboard the cruise line’s vessel, where the Summit was a promotional event to strategize on how to sell, market and enhance the overall guest experience on the vessel).

Against this backdrop, therefore, it is equally clear in the instant case that the cruise line’s key-accounts representative would be a passenger when transported aboard its vessel “to educate travel agents and industry professionals about [the cruise line’s] product during the transit,” inasmuch as this employee would be aboard the vessel inextricably in furtherance of the same basic promotional purposes as the travel agents and industry professionals themselves (i.e., to stimulate future cruise passenger sales aboard that vessel, and perhaps others of the same line). While this admittedly fosters the business interests of the cruise line, it does not connect the accounts representative directly and immediately with the business of the vessel itself, as squarely confirmed by the controlling administrative precedent, supra. And this position jibes precisely with the June 5, 2002, Customs Bulletin notice:

[P]ersons transported on a vessel for reasons connected to business interests not directly related to the business of the vessel itself will be considered passengers.*

Supra, at p.54 (emphasis added).

(* For example, the June 5, 2002, notice explicitly revoked HQ 113017, of February 2, 1994; HQ 113017 had maintained that a cruise line executive and three photographers employed by the cruise line were connected with the business of its vessel, and were not passengers, when carried aboard to produce photos for company business purposes (cruise sales staff training). Nevertheless, while the executive’s and employees’ activities in HQ 113017 did assuredly serve the business interests of the cruise line, it did not directly and intimately connect these employees with the business of the vessel itself.)

Finally, General Letter No. 117, dated May 20, 1916, which originally set forth the meaning of the term “passenger” appearing in 19 CFR 4.50(b), is cited as authority for permitting the key-accounts representative to be transported coastwise aboard the vessel. However, this General Letter specifically found that only the officers of the company owning a vessel, and, if a corporate owner, the members of its board of directors, would, by virtue of their positions as such, be connected with the ownership or business of that vessel so as not to be passengers while being carried aboard. The key-accounts representative would not fall within either of these categories.


Under the facts presented, the key-accounts representative would be considered a passenger under 19 CFR 4.50(b) and 46 U.S.C. App. 289. Hence, if the accounts representative should be transported coastwise aboard the cruise line’s foreign-flagged vessel from New York to Port Canaveral, this would violate 46 U.S.C. App. 289.

Similarly, the travel agents and other industry professionals involved in this case would also be passengers under § 4.50(b) and section 289. Accordingly, if the travel agents and industry representatives should be conveyed coastwise from New York to Port Canaveral like the accounts representative, or be otherwise impermissibly carried coastwise under 19 CFR 4.80a(b), such passengers would also have been transported in violation of section 289.


/S/ Glen E. Vereb

Glen E. Vereb

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