Passive Investment Law and Legal Definition

According to 46 CFR 68.55 [Shipping; Chapter I -- Coast Guard, Department of Homeland Security; Subchapter G -- Documentation and Measurement of Vessels; Part 68 -- Documentation of Vessels: Exceptions to Coastwise Qualification; Subpart C -- Vessels with a Coastwise Endorsement Issued on or After August 9, 2004, that are Demised Chartered to Coastwise Qualified Citizens], passive investment means “an investment in which neither the investor nor any affiliate of the investor is involved in, or has the power to be involved in, the formulation, determination, or direction of any activity or function concerning the use, operation, or management of the asset that is the subject of the investment.”