HQ 112554: User Fee; 19 U.S.C. 58c

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 112554

                        January 27, 1993

VES-5-CO:R:IT:C 112554 GEV

CATEGORY:  Carriers

Tompkins & Davidson
Counselors at Law
One Astor Plaza
1515 Broadway
43rd Floor
New York, New York 10036

RE:  User Fee; 19 U.S.C. 58c

Dear Sirs:

     This is in response to your letter dated December 4, 1992, on
behalf of your client, Chandris, Inc. ("Chandris"), requesting
Customs interpretation of 19 U.S.C. 58c regarding the application
of, and exceptions to, the $5.00 passenger fee for the arrival of
each passenger aboard a commercial vessel or commercial aircraft
from a place outside the United States.  Our ruling on this matter
is set forth below.

FACTS:

     Chandris, located in Miami, Florida, operates as an agency
for the booking of travel aboard various foreign-flag commercial
cruise line ships.  Chandris offers numerous different cruise line
itineraries (including various package programs) which include
origination from and travel to various countries.  Included in such
passenger itinerary cruise travel are passengers who board (i.e.,
the point at which travel on the ship originates) Chandris' ships
at the islands of St. Thomas, Martinique and Curacao, and perhaps
other islands in the Caribbean Sea.  All passengers who board at
the aforementioned locations are, except on very rare occasions,
residents of such U.S. territories or possessions, or adjacent
islands.  For purposes of this ruling we are assuming that each
such cruise terminates in the Customs territory of the United
States.
                              - 2 -

ISSUE:

     Whether the $5.00 processing fee assessed on passengers
arriving in the Customs territory of the United States aboard a
commercial vessel or aircraft pursuant to 19 U.S.C. 58c(a)(5) is
applicable to those passengers whose journeys originate in an
exempt location listed 19 U.S.C. 58c(b)(1)(A).

LAW AND ANALYSIS:

     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 Chandris 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 Chandris' position that the $5.00 fee is not applicable
to passengers who are residents of U.S. territories or possessions,
or adjacent islands (e.g., St. Thomas, Martinique, Curacao, etc.)
and board a cruise vessel at those locations.  Chandris contends
that these passengers' journeys originate at  - 3 -

locations exempt pursuant to the above authority thus rendering
inapplicable the $5.00 fee.  Upon further review of 19 U.S.C. 58c
(the statute from which  24.22 was promulgated) as set forth below,
Customs is in accord with the basic premise of 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."      

     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)                     
                              

                              - 4 -

     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 construe these two 
subsections otherwise could lead to anomalous and improper results. 
For example, if the "other than..." language within the parentheses
of subsection (a)(5) is not construed as stated above (e.g., mere
arrival from an exempted location listed in subsection (b)(1)(A)
suffices to exempt the fee) 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 exempted
location).  On the other hand,- 5 -

if, as is the case with the Chandris passengers under
consideration, a cruise originates in an exempt location 
(e.g., Martinique, St. Thomas, or Curacao) 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 notes 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 

                              - 6 -

"journey" for purposes of the passenger fee provisions because the
issuance of the cruise transportation document results in an 
arrival in the Customs territory of the United States (i.e., Puerto
Rico), that journey also originated in Puerto Rico and thus falls
within the fee exemption set forth in subsection (b)(1)(A)(i).

     Parenthetically, we note references in your submission to 8
U.S.C. 1356(d) and (e)(1) (and regulations promulgated pursuant
thereto in title 8, Code of Federal Regulations) 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.

HOLDING:

     The $5.00 processing fee assessed on passengers arriving in
the Customs territory of the United States aboard a commercial
vessel or aircraft pursuant to 19 U.S.C. 58c(a)(5) is not
applicable to those passengers whose journeys originate in an
exempt location listed in 19 CFR 24.22(g)(2)(i).
                                                                 
     Accordingly, in a case involving a cruise which terminates in
the Customs territory of the United States, the $5.00 fee is not
applicable to a passenger booked on a cruise by Chandris who boards
a Chandris cruise ship at any exempt location which would be
considered the origination point of the passenger's journey unless
such boarding does not represent the origination point of the
passenger's travel itinerary and such itinerary origination point
is other than one of the exempt locations.

                              Sincerely,




                              Stuart P. Seidel
                              Director, International Trade