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HQ 229725





April 2, 2003

LIQ-15 RR:CR:DR
229725 MK

Sam D. Delich
Flynn, Delich & Wise
One California Street, Suite 350
San Francisco, California 94111

RE: Commercial Vessels Passenger User Fees

Dear Mr. Delich:

This is in response to your letter dated November 12, 2002, wherein you express concern as to the interpretation of the Commercial Vessels Passenger User Fees statute and regulation; 19 USCS § 58c and 19 CFR 24.22. We have considered your request and have made the following decision.

FACTS:

You are concerned with passenger user fees for two vessels. The passengers on the first vessel originate travel in Mexico and ultimately disembark in Florida. The passengers on the second vessel originate travel in the Bahamas and ultimately disembark in Mexico, and arrive in San Diego, California by bus. You state that although both vessels dock in non-exempt areas along the travel route, no new passengers embark in those non-exempt areas, and the vessel retains the passports of any of their original passengers who choose to leave the vessel temporarily for any brief amount of time. You believe therefore that both vessels fall within 19 USCS § 58c (b)(A)(i)(I) and that the $1.75 passenger fee should apply.

ISSUE:

Whether the $1.75 passenger fee, 19 USC §58c (a)(5)(B), only applies if a vessel’s journey is limited to the designated exempt areas listed in 19 USC §58c (b)(A), or whether a vessel may dock in non-exempt areas in route as long as the vessel embarks from an exempt area?

LAW & ANALYSIS:

Specifically:

19 USCS § 58c (Supp. 2002)
Schedule of Fees
In addition to any other fee authorized by law, the Secretary of the Treasury shall charge and collect the following fees for the provision of customs services in connection with the following:

5. (A) Subject to subparagraph (B), 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)(i) of this section), $5.

(B) For the arrival of each passenger aboard a commercial vessel from a place referred to in subsection (b)(1)(A)(i) of this section, $1.75.

Limitations on Fees

(1)(A) Except as provided in subsection (a)(5)(B) of this section, no fee may be charged under subsection (a) of this section for customs services provided in connection with-
the arrival of any passenger whose journey (I) originated in
Canada,
Mexico, a territory or possession of the United States, or any adjacent island (within the meaning of sec. 101(b)(5) of the Immigration and Nationalization Act (8 USC 1101(b)(5))), or (II) originated in the United States and was limited to- (aa) Canada,
(bb) Mexico,
(cc) Territories and possessions of the United States , and (dd) such adjacent islands;

It is your position that the point of origin for a voyage is the determining factor in assessing the application of passenger fees. However, you state that in the past, Customs agents have represented that the standard $1.75 (and not the $5.00) per passenger user fee shall be applied only to a passenger’s journey that is “limited to” the designed “formerly exempt areas.” This would not include journeys that originate and embark passengers in Mexico and the Bahamas and ultimately disembark “arriving” passengers in the United States, with port calls at non-exempt areas during their voyages, such as in your specific situation. We must first apply a plain language reading of the statute to the details of these journeys.

The court in Nippon Steel Corp. v. United States, No. 02-153, slip op. at 17 (C.I.T. Dec. 24, 2002) stated that, “It is well settled that ‘in all statutory construction cases, we begin with the language of the statute.’ Barnhart, Comm’r of Soc. Sec. V. Signmon Coal Co., Inc., 534 U.S. 438, 450 (2002). ‘We have stated time and again that courts must presume that a legislature says in a statute what it means and means in a statute what it says there. When the words of a statute are unambiguous, then this first canon is also the last: ‘judicial inquiry is complete.’’ Id. at 461-62 (citing Conn. Nat. Bank v. Germain, 503 U.S. 249, 253-54 (1992). Thus, the court must determine ‘whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case.’ Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997), quoted in Barnhart, 534 U.S. at 450; see also Francis J. McCaffrey, Statutory Construction 4 (1953) (“A statute has a single meaning when its terms are plain and free from ambiguity, and do not admit of another meaning by the context.” (citing People v. Schoonmaker, 63 Barb. 44 (N.Y. Gen. Term 1871)).

In this instance, the statute 19 U.S.C. 58c (a)(5)(A) is read subject to 58c (a)(5)(B). §58c(a)(5)(B) then refers to 58c(b)(1)(A)(i), which includes vessels originating in Mexico. Since the voyages in question embark in Mexico, 58c(5)(b)(1)(A)(i) applies and therefore the vessel qualifies for the exception to the 58c(5)(A) passenger fee of $5.00. According to 58c(a)(5)(B) the arrival of each passenger can be subject to only $1.75.

You cite 19 C.F.R. 24.22 to clarify the definition and use of “originates in” used in the statute.

19 CFR 24.22 Fee for certain services.

(g) Fee for arrival of passengers aboard commercial vessels and commercial aircraft.

Fee. Except as provided in paragraph (g)(2) of this section:

(ii) Commencing on October 1, 1997, a fee of $5 shall be collected and remitted to Customs for services provided in connection with arrival of each passenger aboard a commercial vessel or commercial aircraft from a place outside the United States.

Exceptions. The fee specified in paragraph (g)(1) of this section shall not apply to the following categories of arriving passengers:

(i)(A) Except during the period from January 1, 1994 through September 30, 1997, persons whose journey:

Originates in Canada, Mexico, a territory or possession of the United States, or any adjacent island; or

Originates in the United States and is limited to Canada, Mexico, territories and possessions of the United States, and adjacent islands.

(B) For purposes of paragraph (g)(2)(i)(A) and paragraph (g)(3) of this section, a journey, which may encompass multiple destinations and more than one mode of transportation, shall be deemed to originate in the location where the person’s travel begins under cover of a transaction which includes the issuance of a ticket or travel document for transportation into the customs territory of the United States. In addition territories and possessions include all the islands in the Caribbean Sea, the Bahamas (emphasis added)

The term “from” in 19 U.S.C. 58c(a)(5) and the term “originate” in 19 U.S.C. 58c(b)(1)(A) must be synonymous to permit the fee limitations of paragraph (b) to apply to the fees otherwise imposed by paragraph (a). The entire context of a statute must be considered and every effort made to give full force and effect to all of the language. Sturn, A Manual of Customs Law, pg 165 (1974 ed.) and cases cited therein. The term “originate” is not defined in the statute. However, Customs promulgated 19 CFR 24.22(g)(2)(i)(B) which defined originate to mean the place where the voyage to the U.S. began even if the vessel stopped at multiple destinations en route to the arrival in the U.S.

This having been established, in the case of the first vessel, the passenger need only arrive aboard a vessel originating its journey from a place listed in subsection (b)(1)(A)(i), which Mexico is, to be limited to the $1.75 passenger user fee listed in 58c(a)(5)(B).

The second vessel, for which the passengers originate travel and embark from the Bahamas and ultimately disembark in Mexico but have a connecting bus transfer to San Diego, does not fall within the reach of the statute. The statute applies for “arrival of passengers aboard commercial vessels and commercial aircrafts.” 19 CFR 24.22(a)(1) defines the term “vessel” as “every description of watercraft or other contrivance used or capable of being used as a means of transportation on water but does not include any aircraft.” 19 CFR 24.22(a)(2) defines “arrival” as “arrival at a port of entry in the customs territory of the United States or at any place services by any such port of entry.” The passengers are taking a “vessel” into Mexico, which by definition is not “arriving” into the U.S. and by entering on a bus into California, they are “arriving” not by a “vessel.” The statute is therefore not applicable to the passengers on the second vessel.

HOLDING:

The $1.75 passenger fee, 19 USC § 58c(a)(5)(B), applies even if a vessel’s journey includes dockings in non-exempt areas as long as the vessel ultimately arrives in a U.S. territory.

Sincerely,

Myles B. Harmon, Director

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