HQ 112511

January 27, 1993

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

CATEGORY: Carriers

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