VES-5-CO:R:IT:C 112511 GEV
Donald Harrison, Esq.
Gibson, Dunn & Crutcher
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036-5303
RE: Harbor Maintenance Fee; User Fee; Public Laws 99-272,
99-662; 19 U.S.C. 58c
Dear Mr. Harrison:
This is in response to your letter dated November 6, 1992
(your file no. C 72428-00172), enclosing a memorandum on certain
substantive legal issues raised in the recent Customs Service
audits of Princess Cruises. Our ruling on these issues is set
forth below.
FACTS:
Princess Cruises is a wholly owned indirect subsidiary of
The Peninsular and Oriental Steam Navigation Company (P&O), a
publicly traded company headquartered in London, England that owns
many freight and passenger lines located throughout the world. P&O
was founded more than 150 years ago and is today one of the world's
largest shipping companies.
The ships of the Princess Cruise fleet sail all around the
world. Although the cruise itineraries vary, a typical cruise
involves passengers boarding the cruise ship at a particular port,
stopovers at in-transit ports where some passengers may go ashore,
and a final stop at a port where the passengers disembark and the
cruise ends. The ports of embarkation and disembarkation may be
located in the United States, in a territory or possession of the
United States, or in a foreign country. The proportion of
passengers going ashore at any particular in-transit port would
vary, depending on a variety of circumstances, such as the weather
at the port, the availability of dock space (or whether lightering
would be required for the movement of passengers to shore), and the
interest in the port generally (some passengers prefer to remain
on board to read, dine or relax). The cruises at issue in the
audits typically lasted from 7 to 15 days, and involved from 600
to 1500 passengers per cruise.
In regard to the above cruises, two itineraries of particular
relevance to the Customs audits in question include the
"Vancouver/Whittier" cruises and "Transcanal" cruises. The former
involves embarkation and disembarkation ports of Vancouver, British
Columbia, Canada or Whittier, Alaska, neither of which is
designated in the Customs Regulations as a port subject to the
harbor maintenance fee (HMF). The Vancouver/ Whittier cruises make
brief stopovers at various ports (including Ketchikan and/or Sitka,
Alaska which are HMF ports) where some of the passengers may go
ashore temporarily.
The Transcanal cruise, as its name implies, involves a cruise
that transits the Panama Canal. The westbound version of this
cruise begins in Puerto Rico, where the passengers board the
vessel. The cruise then visits a number of ports in the Caribbean,
and Central and South America, and transits the Canal before
terminating in Acapulco, Mexico. After the passengers disembark
from the cruise in Mexico, they return to the United States,
typically by air carrier. The eastbound version of the Transcanal
cruise is similar, except that the passengers board the cruise in
Acapulco, Mexico, transit the Canal proceeding east, and disembark
from the cruise in San Juan, Puerto Rico.
ISSUES:
1. Whether, after boarding a vessel at a port exempt from
the assessment of HMFs, a passenger who proceeds with the vessel
to a port subject to the assessment of HMFs where he/she
temporarily goes ashore and subsequently gets back on the vessel
is considered to have "disembarked" or "boarded" at that port for
purposes of 19 CFR 24.24(e)(4) so as to incur liability on behalf
of the vessel operator for the payment of a port use fee.
2. What does Customs consider "transportation costs" for
purposes of 19 CFR 24.24(e)(4), and what can the cruise lines
subtract, if anything, from what the passengers paid?
3. Whether the $5 processing fee assessed on passengers
arriving in the Customs territory of the United States aboard a
commercial vessel or aircraft pursuant to 19 CFR 24.22(g)(1) is
applicable to those passengers arriving directly from an exempt
location listed in 19 CFR 24.22(g)(2)(i).
4. Whether the $5 processing fee assessed on passengers
arriving in the Customs territory of the United States aboard a
commercial vessel or aircraft pursuant to 19 CFR 24.22(g)(1) is
applicable to those passengers whose cruise originates in an exempt
location listed in 19 CFR 24.22(g)(2)(i).
LAW AND ANALYSIS:
ISSUE 1
Title 19, Code of Federal Regulations, 24.24(e)(4) provides
in pertinent part:
"Subject to the exemptions and special rules of this
section, when a passenger boards or disembarks a
commercial vessel at a port within the definition of
this section, the operator of that vessel is liable
for the payment of the port use fee." (emphasis added)
Section 24.24(e)(4) was promulgated pursuant to the Water
Resources Development Act of 1986 (Public Law 99-662, 100 Stat.
4082) whose purpose includes the providing of Federal funds for
the maintenance of any channel or harbor in the United States which
is not an inland waterway and is open to public navigation
( 4462(a)(2)(A) of Public Law 99-662, 100 Stat. 4266).
In regard to 24.24(e)(4), neither the statute nor its
legislative history defines the terms "boards" or "disembarks"
cited therein for purposes of assessing the port use fee. (see 100
Stat. 4266-4267, and U.S. Code Congressional and Administrative
News, vol. 6, 99th Congress, Second Session, 1986 at pp. 6706-
6720). It should be emphasized, however, that the fee assessed
pursuant to the aforementioned statute and regulation is for the
use of a port. "Port Use" is defined in the statute as either the
loading of commercial cargo on, or the unloading of commercial
cargo from, a commercial port within the purview of the statute
( 4462(a)(1)(A)(B) of Public Law 99-662, 100 Stat. 4266).
Furthermore, the statute defines "commercial cargo" as "any cargo
transported on a commercial vessel, including passengers
transported for compensation or hire." (emphasis added)
( 4462(a)(3) of Public Law 99-662, 100 Stat. 4267).
In view of the fact that passengers are not typically
characterized as being "loaded" on, or "unloaded" from, a vessel,
Customs, pursuant to its authority to promulgate regulations
necessary to implement the provisions of this statute ( 4462(h) of
Public Law 99-662, 100 Stat. 4269), drafted 24.24(e)(4) to include
the terms "boards" or "disembarks" commensurate with the provisions
for the assessment of HMFs regarding cargo set forth in 24.24(a).
Accordingly, notwithstanding the fact that a passenger may
only temporarily leave a vessel upon its arrival at a port to which
the port use fee applies and get back on the vessel when it sails,
such passenger is considered to "disembark" and/or "embark" for
purposes of 24.24(e)(4) which constitutes "port use" within the
meaning of the statute as discussed above. In fact, it may be
noted that allowing passengers to disembark is the express reason
for use of the port by the vessel. It is also important to note
that although the statute does provide exemptions from the payment
of HMFs for the transportation of various cargoes ( 4462(a)(3)(B),
4462(b)(1)(2), and 4462(d) of Public Law 99-662, 100 Stat. 4267,
4268), including the transportation of passengers by ferry
( 4462(a)(4)(B) of Public Law 99-662, 100 Stat. 4267), no exemption
is provided for pas- sengers such as those in the scenario in
question. Consequently, it is the opinion of the Customs Service
that the operator of the vessel is liable for the payment of port
use fees pursuant to 24.24(e).
It is the position of Princess Cruises that the passengers in
the scenario described above do not "board" or "disembark" at
Ketchikan and/or Sitka, Alaska. While this position is in accord
with the definitions of "embark" and "disembark" set forth in
4.80a(a)(4), Customs Regulations, that regulation was promulgated
pursuant to a different statute (46 U.S.C. App. 289, the "passenger
coastwise law") the purpose of which is not to collect a fee for
the use of a port but rather to prohibit the transportation of
passengers either directly or via a foreign port on any vessel that
is not U.S.-built, owned and documented.
It should be noted that the U.S. Court of International Trade
has upheld Customs disparate interpretation of similar language.
In Tropicana Products, Inc. v. U.S, 789 F.Supp. 1154 at 1158 (CIT
1992) the court stated, "...the criterion of whether goods have
been 'manufactured' serves different purposes under different
statutes..." The court in Tropicana Products also cited National
Juice Products Association v. U.S., n. 14, 628 F.Supp. 978 (CIT
1986) where, in discussing whether the "substantial transformation"
test applied by the courts to country of origin, drawback, and
Generalized System of Preferences should be applied in construing
the term "manufactured" as it is used in 19 U.S.C. 1562 (i.e.,
imported merchandise may not be "manufactured" in a bonded
warehouse prior to its withdrawal therefrom) the court stated,
"...although the language of the tests applied under the three
statutes is similar, the results may differ where differences in
statutory language and purpose are pertinent."
In further support of Princess Cruises' position that the HMF
does not apply to stopovers at HMF ports, you cite a letter from
Customs Regional Director of the Regulatory Audit Division in the
Pacific Region, to Mr. Jim Dahline of Princess Cruises (misdated
March 23, 1991, the correct date being April 23, 1991, when the
letter was faxed to Mr. Dahline) in response to Mr. Dahline's
letter of March 14, 1991, which states, in part, "...we have
received word from the Office of Regulations and Rulings that
C.R. 4.80a(4) [sic] applies to your Alaska voyages and no HMF is
due for stopovers (layovers)."
The "word" referenced in the above letter was not a formal
ruling from the Office of Regulations and Rulings (OR&R) on this
issue but merely an informal, preliminary telephone conversation
on April 23, 1991 (the date the letter was faxed to Mr. Dahline)
between the Customs auditor involved and an OR&R staff attorney.
(See 19 CFR 177.1(b) which provides, in pertinent part, that, "Oral
opinions or advice of Customs Service personnel are not binding on
the Customs Service.") A formal ruling on this matter was issued
in an internal memorandum from the Director, OR&R, to the Director,
Office of Regulatory Audit, on April 7, 1992 (ruling no. 112097),
in response to the latter's request. This ruling was communicated
in a letter dated May 18, 1992, to Mr. Timothy R. McElroy, Director
of Financial Accounting, Princess Cruises, from Customs Regional
Director of the Regulatory Audit Division in the Pacific Region.
Mr. McElroy had replaced Mr. Dahline as Customs audit contact.
Accordingly, the premature inclusion of the aforementioned oral
conversation in the letter to Mr. Dahline referenced above did not
represent Customs official position on this matter.
Customs quarterly accounting procedures are also cited in
support of the position that the HMF only applies where the cruise
begins and ends at an HMF port. These procedures are reflected in
19 CFR 24.24(e)(4)(ii), which provides for quarterly payments using
a "Cruise Vessel Summary Sheet" ("CVSS"). It is contended that
since the CVSS requires the cruise line to identify the "Date of
cruise," the "Number of passengers on cruise," and the "Total
eligible charges for passengers on cruise," the HMF is therefore
calculated based on the total passengers on the cruise, which means
it only applies if the cruise begins or ends at an HMF port. It
is the position of Princess Cruises that, assuming arguendo, the
applicability of the HMF to passengers who make a stopover at an
HMF port, even if the cruise begins and ends at non-HMF ports, the
cruise operator would have to record the number of stopover
passengers notwithstanding the fact that there is no place on the
CVSS to record this, nor is there any indication that such records
must be maintained by the cruise operator.
The above argument is partially correct. Absent evidence to
the contrary (e.g. documentation establishing the number of
passengers actually "disembarking" and/or "boarding" the vessel
when it calls at an HMF port) the calculation of the HMF is based
on the total number of passengers on the cruise as is reflected in
the CVSS, Customs Form (CF) 349 ("Harbor Maintenance Fee Quarterly
Summary Report"), and CF 350 ("Harbor Maintenance Fee Amended
Quarterly Summary Report"). However, the fact that there is no
requirement by the cruise operator, nor provision in Customs
accounting procedures, to specify those passengers who actually
"disembark" and/or "board" the vessel at a stopover port to which
the HMF applies does not override the statutory construction
discussed above so as to support Princess Cruises' position that
the HMF only applies when the cruise begins or ends at an HMF port.
Passengers as a matter of course purchase cruise packages where
itineraries list the ports of call, including the stopover ports
in question. In fact, it appears that the primary reason for
stopping at the port is to allow passengers to disembark and visit
the port. Therefore, Customs is entitled to the presumption,
rebuttable upon submission of adequate documentation, that every
passenger travelling on the vessel "disembarks" and/or "boards" at
these stopovers ports within the meaning of 24.24(e)(4) and that
HMFs should be assessed accordingly.
In further support of Princess Cruises' position, you refer
to the terminology employed in Customs "Harbor Maintenance Fee
Audit Report," dated June 25, 1992. Appendix II of this report
includes a schedule of the various Princess Cruises at issue.
Included in Attachment 3 to counsel's memorandum is page 1 of
Appendix II. This schedule refers to individual Princess Cruises
voyages and identifies these by the "embarking port," the
"disembarking port," and the "in-transit port." The "embarking
port" is the port at which the cruise began, the "disembarking
port" is the port at which the cruise ended, and the "in-transit
port" is a stopover port where some passengers may have gone ashore
temporarily. It is contended that these references are consistent
with the normal usage of the terms "embarking" and "disembarking"
referenced in the HMF regulations. Consequently, it is alleged
that they further support the proposition that a passenger "boards
or disembarks a commercial vessel at a port within the definition
of this section" for purposes of the HMF only when the port is the
origination or termination of the cruise, not when it is an "in-
transit" port during the cruise.
In response to the above contention, it should be noted that
the aforementioned Appendix II is Customs version of Exhibit A to
the same report which was prepared and provided by Princess
Cruises. It is their representation and use of terms. The Customs
auditor auditing Exhibit A produced Appendix II by merely adding
the column of "in-transit" port names to indicate use of HMF
designated ports. These audit notations do not reflect Customs
position on the statutory construction discussed above. Finally,
Princess Cruises maintains that their construction of the HMF
statute and regulations is consistent with the views of other
major cruise lines and consequently should be adopted by Customs.
While the cruise industry may be in accord on this matter, their
position, although a factor to be considered, is not dispositive
as to the final resolution.
ISSUE 2
Title 19, Code of Federal Regulations, 24.24(e)(4) provides
in pertinent part:
"Subject to the exemptions and special rules of this
section, when a passenger boards or disembarks a
commercial vessel at a port within the definition of
this section, the operator of that vessel is liable
for the payment of the port use fee. The fee is to
be based upon the value of the actual charge for
transportation paid by the passenger or on the
prevailing charge for comparable service if no actual
charge is paid..." (emphasis added)
Section 24.24(e)(4) was promulgated pursuant to the Water
Resources Development Act of 1986 (see 4462(a)(5)(B) of Public
Law 99-662, 100 Stat. 4267). A review of both the statute and its
legislative history yields no further clarification as to what
specific expenditures constitute the transportation costs in
question. In this regard it should be noted that the language
contained in both is verbatim ("...'value' means the actual charge
paid for such service, or the prevailing charge for comparable
service if no actual charge is paid..."). (see 100 Stat. 4267, and
U.S. Code Congressional and Administrative News, vol. 6, 99th
Congress, Second Session, 1986 at p. 6712)
In view of the lack of guidance from the authority cited
above, we look to the plain meaning of the statutory language.
The American Heritage Dictionary, Second College Edition, defines
"actual" as "existing in fact or reality." In this regard it
should be noted that the legislative history of Public Law 99-662
provides in part that, "The port user charges...are to be
administered and enforced by the U.S. Customs Service." (see
U.S. Code Congressional and Administrative News, vol. 6, 99th
Congress, Second Session, 1986 at p. 6707) It is apparent,
therefore, that Customs is accorded a degree of latitude in the
assessment of port use charges pursuant to 24.24(e)(4).
In calculating the "value of the actual charge for
transportation paid by the passenger" for purposes of 24.24(e)(4),
it was Customs position that this should include those expenditures
which comprise the normal fare the cruise line would charge a
passenger for a particular trip, including any travel agent's
commission and those transportation and lodging costs included in
the overall cruise package in bringing the passenger to and from
the port of embarkation, provided the passenger actually availed
himself of such transportation and lodging. (Customs ruling no.
543896, dated May 13, 1987) This position was reiterated in an
internal memorandum from the Director, International Trade
Compliance Division, OR&R, to the Director, User Fee Task Force,
dated October 7, 1991 (ruling no. 111598)
Upon further review of this matter, Customs remains of the
opinion that the "transportation costs" for passengers of cruise
vessels includes all "embarkation-to-disembarkation" costs as
reflected on passenger tickets, including commissions paid to
travel agents, port taxes, charges for pilotage, U.S. Customs and
U.S. Immigration and Naturalization services, wharfage, and any
"suite amenities" provided they are contracted and paid for prior
to the commencement of the voyage (i.e., included in the cost of
the ticket). However, after numerous discussions with represen-
tatives of the cruise industry, Customs is now of the opinion that
the costs of land-based lodging and connecting air trans- portation
are not to be included in Customs calculation of the transportation
costs under consideration regardless of whether a passenger avails
himself of such transportation and lodging. Although this position
represents a divergence from ruling no. 543896 cited above, Customs
believes this revised position constitutes an equitable resolution
of this matter taking into consideration both the concerns of the
cruise industry and Customs responsibility in administering the
port use fee. This position was communicated to Mr. John T. Estes,
President, International Council of Cruise Lines, in letters dated
June 12 and October 6, 1992, from Mr. Charles W. Winwood, Assistant
Commissioner, Office of Inspection and Control.
Parenthetically, we note that Mr. Estes, in a letter dated
July 15, 1991, to Mr. Matthew Krimski, Office of Regulatory Audit,
proposed a method of apportionment between costs directly related
to the navigation of the vessel and those not so related, in the
calculation of port use fees. In support of this position Mr.
Estes cited House Conference Report No. 99-1013, at p. 229 (see
U.S. Code Congressional and Administrative News, vol. 6, 99th
Congress, Second Session, 1986, at p. 6741) which provides, in
part, that "Passenger vessels also are subject to the charge, with
value generally determined by reference to the prices paid by the
passengers for their transportation." To the contrary, this cite
merely bolsters Customs position in this matter as discussed above.
Finally, Princess Cruises maintains that their method of
calculating the HMF for cruise passengers is consistent with the
views of other major cruise lines and consequently should be
adopted by Customs. As stated in our discussion of Issue 1 above,
the cruise industry's position on this or any other particular
issue pending before Customs, although a factor to be considered,
is not dispositive as to the final resolution.
ISSUES 3 and 4
Title 19, Code of Federal Regulations, 24.22(g)(1) provides,
in pertinent part:
"Except as set forth in this paragraph, each
passenger requiring Customs processing who is
aboard a commercial vessel or commercial air-
craft which arrives in the customs territory
of the U.S. from a place outside thereof, shall
be assessed a fee in the amount of $5 for the
processing."
Section 24.22(g)(1) was promulgated pursuant to 13031 of the
Consolidated Omnibus Reconciliation Act of 1985 (the COBRA, Public
Law 99-272, 100 Stat. 82) codified at 19 U.S.C. 58c, whose purpose,
as clearly stated in the statute and the above regula- tion, was
to provide a schedule of fees for the provision of various Customs
services.
The exceptions referenced in 24.22(g)(1) are set forth in
24.22(g)(2) (also promulgated pursuant to 13031 of the COBRA).
Of particular relevance to Princess Cruises (specifically regarding
their Transcanal cruises and some cruises that arrive back into the
United States) is the exemption from the assessment of the $5 fee
set forth in 24.22(g)(2)(i) which provides that the fee shall not
be assessed for the following:
"Persons whose journey originates in Canada,
Mexico, a territory or possession of the U.S.,
or any adjacent island. The U.S. territories
and possessions include American Samoa, Guam,
the Northern Mariana Islands, Puerto Rico and
the U.S. Virgin Islands. The adjacent islands
include all of the islands in the Caribbean Sea,
the Bahamas, Bermuda, St. Pierre, Miquelon, and
the Turks and Caicos Islands." (emphasis added)
It is the position of Princess Cruises that the $5 fee should
not be assessed to either: (1) cruise passengers arriving back in
the United States whose last cruise stop prior to arrival is a
place listed in 24.22(g)(2)(i) (which includes Mexico and Puerto
Rico); or (2) cruise passengers whose cruises "originated in" one
of the places listed in 24.22(g)(2)(i) (again including Mexico and
Puerto Rico). Upon further review of 19 U.S.C. 58c (the statute
from which 24.22 was promulgated) as set forth below, Customs is
not in accord with this position.
Title 19, United States Code, 58c(a)(5), provides for the
assessment of fees associated with passengers as follows:
"For the arrival of each passenger aboard a
commercial vessel or commercial aircraft from
a place outside the United States (other than
a place referred to in subsection (b)(1)(A) of
this section), $5." (emphasis added)
Title 19, United States Code, 58c(b)(1)(A), provides for the
limitation on the assessment of the above fees as follows:
(b) Limitation on fees
(1) "No fee may be charged under subsection (a)
of this section for customs services provided in
connection with --
(A) the arrival of any passenger whose journey--
(i) originated in--
(I) Canada,
(II) Mexico,
(III) a territory or possession of the
United States, or
(IV) any adjacent island (within the
meaning of 1101(b)(5) of Title 8,
or
(ii) originated in the United States and was
limited to--
(I) Canada,
(II) Mexico,
(III) territories and possessions of the
United States, and
(IV) such adjacent islands;
(emphasis added)
With regard to 19 U.S.C. 58c(a)(5) which provides for the
assessment of the fee, we believe that it must be read in
conjunction with subsection (b)(1)(A) of the statute which limits
the applicability of the fee not in terms of direct arrivals from
those locations listed therein, but in terms of journeys
originating in those locations. To apply the "other than..."
language within the parentheses of subsection (a)(5) in the manner
suggested in your submission could lead to anomalous and improper
results. For example, under this suggested interpretation no fee
would have to be collected from a traveler who flies from Paris,
France to Martinique and thence to the United States because the
arrival in the United States would be from an "adjacent island"
referred to in subsection (b)(1)(A). We believe that such a result
clearly was not intended by Congress and would be inconsistent not
only with the plain wording of the statute but also with the result
reached by proper application of subsection (b)(1)(A) as further
explained below. Accordingly, in order to give proper effect to
the statute in its entirety, it is Customs position that the "other
than..." language within the parentheses of subsection (a)(5)
operates only as a cross-reference to subsection (b)(1)(A) which
must be looked to for the substantively operative fee exemption in
this regard.
As noted above, the two fee exemption provisions in subsection
(b)(1)(A) are set forth with reference to where the "journey" of
the arriving passenger "originated" (i.e., under subsection (i)
thereof the journey simply must originate in Canada, Mexico, a
territory or possession of the United States, or any adjacent
island (the "exempt locations"), and under subsection (ii) thereof
the journey must originate in the United States but with further
qualification that the journey must be limited to the named exempt
locations). In a case involving a traveler who embarks on a cruise
which terminates in the United States, it is Customs position that
at a minimum the entire cruise itinerary must be considered the
"journey" for purposes of subsection (b)(1)(A) for the following
reasons: (1) subsection (ii) thereof clearly contemplates a
journey involving more than one stage or leg (i.e., the journey
must encompass a departure from, and return to, the United States
with an intermediate stop in one exempt location and could include
stops in more than one exempt location); and (2) if only the last
leg of a cruise were to constitute a journey, subsection (i)
thereof could be used to nullify the intended effect of the
limitation in subsection (ii). Thus, in a case where a cruise
originates in the United States and includes a stop in a non-
exempt location and a final stop in the U.S. Virgin Islands prior
to arrival back in the United States, the fees would have to be
collected because the journey does not meet the standard for
exemption under subsection (b)(1)(A)(ii) (i.e., the journey
originated in the United States and was not limited to an exempt
location). On the other hand, if a cruise originates in an exempt
location and arrives in the United States after multiple
intermediate stops which include a non-exempt location, no fees
would have to be collected because the journey in this case is
covered by the terms of subsection (b)(1)(A)(i).
However, Customs is of the opinion that the term "journey" as
used in subsection (b)(1)(A) may encompass more than merely a
cruise under certain factual circumstances, with the result that
the place where the cruise originated may not always control the
application of the two fee exemption provisions contained in that
statutory provision. In this regard, 19 U.S.C. 58c(d)(1) requires,
inter alia, (1) that the $5 fee prescribed under subsection (a)(5)
be collected by "[e]ach person that issues a document or ticket to
an individual for transportation by a commercial vessel or
commercial aircraft into the Customs territory of the United
States" and (2) that such collection take place "at the time the
document or ticket is issued." Since collection of the fee is
dependent on, and must take place at the same time as, issuance of
the ticket or travel document which results in the passenger's
arrival in the United States, the term "journey" must include all
stages of an itinerary under circumstances where travel is sold,
and one or more tickets or travel documents are issued by one party
(including related parties) covering multiple destinations and/or
covering multiple or different modes of transportation.
An example of applying Customs interpretation of the term
"journey" as discussed above is as follows. If a traveler
purchased a travel package in New York City from a travel agent
and the transportation document(s) or ticket(s) issued by that
travel agent covered air transportation from New York City to San
Juan, Puerto Rico and a one week cruise out of San Juan with stops
in the U.S. Virgin Islands, Antigua, Martinique, Grenada, and
Caracas, Venezuela before returning to San Juan and return air
travel to New York City, the travel agent would not be exempt from
having to collect the fee because the journey originated in the
United States (i.e., New York City) as provided in the exemption
set forth in subsection (b)(1)(A)(ii), and the journey also
included Caracas, Venezuela. Thus the journey was not limited to
the specified locations as further required by that statutory
provision. On the other hand, if that same traveler obtained from
the travel agent in New York City only the air transportation to
and from San Juan and subsequently purchased the same cruise
itinerary directly from the cruise line while in San Juan, neither
the travel agent in New York City nor the cruise line in San Juan
would be expected to collect the $5 fee because (1) the airline
ticket issued by the travel agent did not cover transportation into
the Customs territory of the United States, and (2) although the
cruise would be considered a "journey" for purposes of the
passenger fee provisions because the issuance of the cruise
transportation document results in an arrival within the Customs
territory of the United States (i.e., in Puerto Rico), that journey
also originated in Puerto Rico and thus falls within the fee
exemption set forth in subsection (b)(1)(A)(i).
Finally, we are asked to render an interpretation of 8 U.S.C.
1356(d) and (e)(1) which respectively provide for the assessment
of, and exemption from, a $5 fee in connection with passenger
inspection services provided by the U.S. Immigration and
Naturalization Service. Notwithstanding similar language appearing
in both 8 U.S.C. 1356 and 19 U.S.C. 58c, Customs declines to render
an interpretation of any statute administered by another Federal
agency.
HOLDINGS:
1. After boarding a vessel at a port exempt from the
assessment of HMFs, a passenger who proceeds with the vessel to a
port subject to the assessment of HMFs where he/she temporarily
goes ashore and subsequently gets back on the vessel is considered
to have "disembarked" and "boarded" at that port for purposes of
19 CFR 24.24(e)(4) so as to incur liability on behalf of the vessel
operator for the payment of a port use fee.
2. For the purpose of calculating port use fees pursuant to
24.24(e)(4), Customs Regulations, Customs considers the "value of
the actual charge for transportation paid by the passenger" to
include all items which would be included in the normal fare the
cruise line would charge a passenger for a particular voyage.
These "embarkation-to-disembarkation" costs would include travel
agents' commissions, port taxes, charges for pilotage, U.S. Customs
and U.S. Immigration and Naturalization services, wharfage, and any
"suite amenities" provided these costs are contracted and paid for
prior to the commencement of the voyage (i.e., included in the cost
of the ticket). However, the costs of land-based lodging and
connecting air transportation are not included in these
"embarkation-to-disembarkation" costs.
3. The $5 processing fee assessed on passengers arriving in
the Customs territory of the United States aboard a commercial
vessel or aircraft pursuant to 19 CFR 24.22(g)(1) is applicable to
a passenger arriving directly from an exempt location listed in 19
CFR 24.22(g)(2), unless the passenger's journey either originated
in an exempt location listed therein or originated in the United
States and was limited to the exempt locations listed therein.
4. In the case of a travel itinerary which starts at and
returns to a point within the United States and involves multiple
or different modes of transportation including a cruise which stops
in a location which is not an exempt location specified in 19 CFR
24.22(g)(2)(i), the $5 processing fee assessed on passengers
arriving in the Customs territory of the United States aboard a
commercial vessel or aircraft pursuant to 19 CFR 24.22(g)(1) is
applicable to a passenger even though the cruise portion of such
itinerary originated in one of those exempt locations, unless the
cruise constitutes a separate journey by virtue of the fact that
the ticket or travel document covering the cruise portion of the
travel was issued and paid for as a separate transaction unrelated
to the other stages of the travel itinerary.
Sincerely,
Stuart P. Seidel
Director, International Trade