Cruise Lines to Post All Reported Crimes, Rockefeller Vows to Close Tax ?Loophole? Jul 24th 2013, 17:57
The three largest cruise companies will voluntarily post all crimes reported on their ships starting Aug. 1 and going back to the third quarter of 2010, Royal Caribbean International President and CEO Adam Goldstein said in a U.S. Senate committee hearing on July 24. Currently, shipboard crime statistics only list cases that are closed by the FBI, a system that industry critics contend under-reports incidents and doesn’t accurately reflect the problem.
The hearing covered a wide-ranging list of topics, including recent ship incidents such as the Carnival Triumph’s February engine room fire and loss of power, but closed with a vow by Sen. Jay Rockefeller to introduce legislation this week to correct what he views as a failure for cruise lines to pay their fare share of taxes.
“The cruise industry uses a loophole in our tax code to avoid paying its fair share of corporate income taxes,” said Rockefeller, chairman of the Senate’s commerce, science and transportation committee. Addressing Goldstein and Carnival Cruise Lines President and CEO Gerald Cahill, Rockefeller said his staff reviewed seven years of SEC filings and determined that their “collective corporate income tax rate comes to about 1.3 percent.”
“Because you flag your ships in other countries and maintain the fiction that you earn most of your income outside of U.S. territory, you do not pay your fair share of taxes in this country,” Rockefeller said. “I am working on legislation to close this loophole.”
Relating to the crime reporting issue, cruise lines that will report all allegations include Royal Caribbean and its sister companies Celebrity Cruises and Azamara Club Cruises, all Carnival Corp. brands (including Carnival Cruise Lines, Princess Cruises and Holland America Line), and Norwegian Cruise Line. The companies confirmed that their websites will begin posting the information but also will continue to include a link to the U.S. Coast Guard site that just lists the cases that have been closed.
“In the spirit of transparency, the three largest cruise lines — making up over 85 percent of the cruise industry — voluntarily agreed to expand that reporting … regardless of whether an investigation was opened or closed,” Goldstein said in his opening statement.
Rockefeller, a vocal critic of the cruise industry, on July 23 introduced a bill that would give the Department of Transportation oversight of the cruise industry and act as the lead federal agency for cruise consumer protection, similar to the role it has in aviation.
Among those testifying was Rear Admiral Joseph Servidio, the assistant commandant for prevention and policy for the U.S. Coast Guard, who said “deficiencies” were found on the Carnival Triumph during a two-day inspection before it re-entered service in Galveston in June. Some fire detectors and sprinklers were not working properly, but the problems were rectified the next day and the Triumph was able to depart as scheduled on June 13.
Senators also questioned whether the new Cruise Passenger Bill of Rights dovetails with the “fine print” on individual lines’ ticket contracts. Goldstein said cruise lines did want to quickly promote the new Bill of Rights in May and most are now working to “modify” the ticket contracts so they “harmonize” with the Bill of Rights. Adopting the Bill of Rights is a condition of membership in the Cruise Lines International Association, he said.
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