### Question
Can you define what passive investment means?


### Answer
**Passive investment** is defined as the following in *46 U.S.C. § 12106*:

> an investment in which neither the investor nor any affiliate of such investor is involved in, or has the power to be involved in, the formulation, determination, or direction of any activity or function concerning the management, use, or operation of the asset that is the subject of the investment

#### Citation:
  - *46 U.S.C. § 12106*
  - Heading: **Subtitle II-Vessels and Seamen > Part H-Identification of Vessels > CHAPTER 121-DOCUMENTATION OF VESSELS**

