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December 13, 2007

Mr. Glen E. Vereb

Border Security Regulations Branch

Office of International Trade

Customs and Border Protection

1300 Pennsylvania Avenue, NW, (Mint Annex)

Washington, DC 20229

Dear Mr. Vereb:

On behalf of the 24 member lines of the Cruise Lines International
Association (CLIA), our 16,500 Travel Agent members and 85 corporate
executive partners, I am writing to request clarification of the
proposed interpretation of the Passenger Vessel Services Act and its
criteria as laid out in the Bureau of Customs and Border Protection's
*Hawaiian Coastwise Cruises* (Docket No. USCBP-2007-0098).

Due to the lack of clarity in the proposed interpretation, we
respectfully request an additional 30 days beyond the publication of a
clarification to respond.

This issue is of great importance to the membership of CLIA and the
350,000 Americans whose livelihoods depend upon this industry. The
industry produced a \$35.7 billion economic benefit to the U.S. economy
in 2006 and carried a record 9.3 million Americans on cruise vacations.
Not only does your interpretation have the potential to greatly impact
the U.S. economy, but also to adversely affect our North and Central
American neighbors as well as the Caribbean island nations.

The proposed interpretation would represent a major change in existing
U.S. policy regarding the permissible itineraries for cruise ships
sailing in or out of U.S. ports. Not only is this major change in policy
targeted only at one industry, but it is proposed in a summary fashion
in which the interpretation has been adopted without sufficient due
process such as notice and opportunity for public comment as well as a
reasonable economic impact analysis.

***Request for clarification in the interpretation***

The title of the proposed interpretation as well as much of the
discussion focuses upon U.S. flag coastwise vessels operating in the
Hawaiian Islands and the competition provided by internationally flagged
carriers in this trade. However, Section VI of the proposed
interpretation appears to conflict with itself and the rest of the text
of the notice.

*Hawaiian Coastwise Cruises*

Docket No. USCBP-2007-0098

Beginning with the words "Specifically, CBP interprets a voyage to be
'solely to one or more coastwise ports..." the proposal appears to
encompass *any* voyage beginning and ending at a U.S. port. Even if the
interpretation is intended to affect only West Coast/Hawaiian
Island/Ensenada, Mexico itineraries, the economic impact of the
interpretation is still of an unprecedented size, particularly to those
U.S. ports and states affected. For example, vessels currently
homeported in Los Angeles or San Diego generate up to \$2,000,000 in
economic benefit per cruise itinerary for the home port. Individual
cruise ship port-of-call visits to the Hawaiian islands produce several
hundred thousand dollars in economic benefit to the islands per port
call. If the current proposal applies only to Hawaiian and Ensenada
itineraries, the ports of Los Angeles and San Diego as well as a number
of Hawaiian Island ports would lose these revenues, not to mention the
jobs and business generated for longshore workers, transportation
providers, restaurants and hotels, theme parks, attractions and all
sorts of local retailers.

If the interpretation is to affect every cruise itinerary beginning and
ending at a U.S. port, the economic impact of this proposed rule would
be staggering, implicating every cruise port and itinerary in the U. S.
Currently, there are very few port calls of 48 hours duration on any
cruise to or from the U.S., and the only regularly scheduled voyages
that meet this criteria are cruises beginning and ending at U.S. east
coast ports and calling at Bermuda (for 48 hours). Moreover, there are
several regularly scheduled voyages from U.S. ports that are only 72 to
96 hours in total duration. It would be impossible to schedule 48 hour
port calls into such an itinerary. Many 7 day cruises have 3 or 4
foreign port calls scheduled within the seven day itinerary. These port
calls can encompass as little as 5 hours in port. Within the cruise
industry, generally port calls do not last more than 12 hours, even for
those vessels who might be calling on their home port, embarking and
disembarking passengers and re-provisioning the ships. The establishment
of a 48 hour port call requirement would be completely arbitrary,
without regulatory precedent and would disrupt virtually *every* U.S
itinerary. The result would be substantial hardship to many destinations
that are economically dependent upon this industry.

If the interpretation is limited to itineraries in which a foreign
registered vessel touches more than one U.S. port, it would still serve
to limit U.S. port calls because of the 48 hour foreign port call
criteria, as well as the requirement that more than 50 % of the port
call time be spent in foreign ports. Many U.S. ports have invested
heavily in infrastructure improvements in port facilities and shoreside
attractions to make themselves attractive ports of call on international
itineraries. To limit their ability to attract cruise ships because of a
perceived influence on the Hawaiian islands trade would cause the loss
of many thousands of jobs in the U.S. economy and at ports that are
thousands of miles removed from Hawaii.

Unfortunately this proposed interpretation could be read in any of the
three ways delineated above with varying impacts on the U.S. economy,
this industry and 350,000 Americans whose jobs are dependent upon the
industry.

While the methodology proposed by this interpretation may be appropriate
for a limited impact policy change, the proposed interpretation fails to
make clear that it is to be of limited impact. Furthermore, it is not
clear how CBP could avoid the precedent-

*Hawaiian Coastwise Cruises*

Docket No. USCBP-2007-0098

setting impact of such an interpretation. Therefore, in this request we
seek clarification of the interpretation so that all may be assured of
the limited scope of the interpretation. Alternatively, we seek a
withdrawal of the rule and re-issuance as a substantive policy change to
existing Customs guidance as contained in Revenue rulings and the Code
of Federal Regulations. If it is not a limited policy interpretation, it
is a substantive change in regulation which should receive full and
complete consideration under the Administrative Procedure Act, 5 U.S.
Code 553 and be subject to a regulatory flexibility analysis as required
by the Regulatory Flexibility Act (RFA). 

We request that CBP withdraw the interpretation in order to give the
affected parties time to attempt to resolve the immediate issue which
prompted its issuance. If CBP feels that it must develop criteria to
determine the parameters of a legitimate foreign port call under the
Passenger Vessel Services Act, we encourage CBP to use a negotiated
rulemaking approach, to consider current industry standards and
practices, and to propose reasonable amendments to the regulations after
notice and comment under the Administrative Procedures Act.

***Detrimental Reliance on previously published CBP Guidance***

Cruise lines publish their intended itineraries up to 24 months in
advance of scheduled performance. When the itineraries are published,
the cruise lines immediately begin selling the cruises to the public
therefore 2009 itineraries have already been booked based upon published
itineraries and guidance contained in CBP revenue rulings. While CBP did
serve notice of concerns with the duration of certain foreign port calls
to Ensenada Mexico in August of this year, this notice did not in any
way describe concerns with all foreign port calls or even hint that 48
hour port calls were to be required in foreign ports. If this
interpretation is finalized as affecting all foreign port calls on U.S.
itineraries or even limited to those itineraries at which a non-U.S.
flag vessel touches more than one U.S. port, then most if not all U.S.
itineraries and cruise ports will be adversely affected. All cruises
booked from the effective date of the interpretation would have to be
evaluated for compliance with the interpretation, and modified according
to the final interpretation. Upon modification, cruise passengers would
have to be notified of the changes, and contracts with ports and vendors
throughout the U.S. would have to be renegotiated or cancelled. All of
these changes would serve to disrupt the entire North American market
due to a perceived need to protect U.S. flag passenger ships in only one
limited market, Hawaii. Such an impact on a major industry should be
carefully considered through a formal rulemaking process with careful
balancing of all of the interests involved.

***Balancing of Interests***

The entire membership of CLIA is very sympathetic to the potential loss
of U.S. maritime jobs that the re-flagging of NCL America ships
represents, and believes that delivering a cost competitive vacation
product is in the interest of the American public at large. Some 350,000
Americans depend on this industry for their livelihoods. Radical changes
to existing policies and precedents that have previously approved brief
port calls on foreign voyages requires careful consideration. This
industry provides substantial economic benefit to the U.S. economy. The
imposition of radical measures

*Hawaiian Coastwise Cruises*

Docket No. USCBP-2007-0098

intended to protect 2,200 American jobs at the potential expense of tens
of thousands American jobs is not good policy making, especially when
the radical changes are based upon flawed analysis.

To conclude, CLIA respectfully requests that your agency provide written
clarification of the intended scope of this proposed interpretation, and
an adequate opportunity for all of the affected public to comment. In
the absence of a written clarification, we would request withdrawal of
the notice and use of the normal federal rulemaking process so that a
careful economic analysis can be conducted.

> Sincerely,

![](media/image2.png){width="2.4180555555555556in" height="0.96875in"}

> J. Michael Crye
>
> Executive Vice President