HQ 0112511 - Harbor Maintenance Fee; User Fee; Public Laws 99-272, 99-662; 19 U.S.C. 58c - United States International Trade Commision Rulings

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HQ 112511

January 27, 1993

VES-5-CO:R:IT:C 112511 GEV

CATEGORY: CARRIER

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

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