H310686

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H310686 August 10, 2020 VES-3-02-OT:RR:BSTC:CCR HQ H310686 AMW CATEGORY: Carriers Mr. Jeffrey T. Lawrence, Esq. Mr. Joshua P. Stein, Esq. Cozen O’Connor P.C. 1200 19th St., NW Washington, DC 20036 RE: Coastwise Transportation of Passengers; 46 U.S.C. § 55103; 19 C.F.R. §§ 4.50(b) and 4.80a Dear Messrs. Lawrence and Stein: This letter is in response to your April 14, 2020 ruling request and subsequent follow-up information provided to this office in which you inquire as to whether the transportation of certain individuals onboard a non-coastwise-qualified vessel in United States territorial water would constitute a violation of the Passenger Vessel Services Act (“PVSA”), 46 U.S.C. § 55103. Our ruling is set forth below. FACTS Your client, 51 Minds Entertainment (“51 Minds”) is a U.S.-based television production company that produces non-scripted reality shows, including “Below Deck Sailing Yacht,” which is broadcast on the Bravo television network. You state that 51 Minds proposes to charter the M/V PARSIFAL III (the “vessel”), a U.K. flagged, 180-foot sailing yacht to serve as a set for an upcoming season of “Below Deck Sailing Yacht.” As with previous seasons, the program will be shot primarily aboard the vessel, which will be equipped with sound and recording equipment, over the course of approximately six weeks. Your request outlines three distinct groups of individuals who will be carried onboard the vessel during the course of the filming: The vessel’s crew: Comprised of the vessel’s captain, chief engineer, bosun (i.e., the individual responsible for maintaining the vessel’s exterior and supervising the deckhands), deckhands, chief stewardess, stewardesses, and a chef. You state that, in addition to manning and crewing the vessel, these individuals will appear as on-screen talent for the “Below Deck Sailing Yacht” program. These individuals are qualified vessel crew, but are also selected following screen testing and auditions. Television production crew and technicians: You have provided a list of 42 individual positions who will be transported onboard the vessel for the purposes of producing and filming the subject program. These individuals include the program’s producers, director of photography, story team, production team, camera and audio recorder operators, lighting technicians, network executives, and production co-executives. Yacht guests: Described as “talent/yacht guests,” this category includes those individuals traveling as guests onboard the vessel. Similar to the vessel’s crew, these individuals will be selected by 51 Minds and the Bravo network to appear as guests on-board the vessel while it cruises, usually in groups of six at a time. Each guest will execute a talent agreement. In exchange for appearing on the program, 51 Minds will provide each guest with air travel to and from a voyage’s embarkation and disembarkation points as well as all lodging before and after the voyage. In addition, 51 Minds will pay a portion of the cost to charter the vessel for each guest, allowing each group of guests to charter the vessel at a discounted rate. You have provided the itineraries for seven separate voyages, which will occur between [ ]. In four of these voyages, the guests will embark the vessel at [ ], travel to two intervening U.S. points, and disembark at [ ]. In two voyages, guests will embark the vessel at [ ] travel to two intervening U.S. points, and return to [ ] to disembark. Finally, in one voyage, guests will embark the vessel at [ ], travel to two intervening U.S. points, and proceed to disembark at [ ]. At no point will the vessel call at a foreign port or leave U.S. waters. ISSUE Whether transportation of individuals as described in the FACTS section would constitute a violation of the PVSA, 46 U.S.C. § 55103 and 19 CFR § 4.50(b). LAW AND ANALYSIS Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. Such a vessel, after it has obtained a coastwise endorsement from the U.S. Coast Guard, is said to be “coastwise qualified.” The coastwise laws generally apply to points in the territorial sea, which is defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline. The coastwise law applicable to the carriage of passengers is found at 46 U.S.C. § 55103 which provides: (a) In General. Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not transport passengers between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel- (1) is wholly owned by citizens of the United States for purposes of engaging in coastwise trade; and (2) has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement. (b) Penalty. The penalty for violating subsection (a) is $300 for each passenger transported and landed. Section 4.50(b) of the CBP Regulations provides: A passenger within the meaning of this part is any person carried on a vessel who is not connected with the operation of the vessel, her navigation, ownership, or business. Section 4.80a of the CBP Regulations provides: (a) For the purposes of this section, the following terms will have the meaning set forth below: (4) Embark means a passenger boarding a vessel for the duration of a specific voyage and disembark means a passenger leaving a vessel at the conclusion of a specific voyage. The terms embark and disembark are not applicable to a passenger going ashore temporarily at a coastwise port who reboards the vessel and departs with it on sailing from the port. Section 4.80(b)(2) of the CBP Regulations further provides: The penalty imposed for the unlawful transportation of passengers between coastwise points is $300 for each passenger so transported and landed on or before November 2, 2015, and $812 for each passenger transported and landed after November 2, 2015 (46 U.S.C. § 55103, as adjusted by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015). With respect to vessel chartering, CBP has consistently held that a vessel chartered under a bona fide bareboat charter and used only for pleasure purposes is not considered to be used in coastwise trade. A vessel chartered under a charter arrangement other than a bareboat charter (e.g., a time or voyage charter) and used in coastwise transportation, however, would subject the owner of a vessel to penalties under 46 U.S.C. § 55103 unless the vessel is coastwise-qualified. A non-coastwise-qualified vessel chartered under a bareboat charter would also violate the coastwise laws if the bareboat charterer used it in the coastwise trade (e.g., to transport passengers (other than bona fide guests) between coastwise points or entirely within territorial waters). See HQ 109638 (July 22, 1988); HQ 112120 (May 26, 1992); and HQ H024222 (Mar. 19, 2008). In this case, the information provided indicates that the vessel will engage in coastwise trade. Although you have not provided a complete agreement sufficient to demonstrate that the charter is a bona fide bareboat charter, the facts demonstrate that the vessel will not be used purely for pleasure purposes, and coastwise transportation will be provided. As such, the applicable question becomes whether the transported individuals constitute “passengers” as analyzed below. In the present case, you state that the non-coastwise-qualified vessel will transport individuals entirely within the territorial sea. CBP has