Coast Guard Saves Carnival Over and Over—for Free
Oh, and the cruise line is exempt from paying a ton of taxes
By Kate Seamons, Newser Staff
Posted Mar 18, 2013 1:37 PM CDT
A passenger displays a message as he rides a bus from the cruise terminal in Mobile, Ala., Thursday, Feb. 14, 2013.   (AP Photo/John David Mercer)

(Newser) – As if excrement-coated floors weren't outrageous enough, Quartz takes a look at another of Carnival Cruise's dirty secrets: Though it's exempt from a slew of taxes thanks to the fact that it's incorporated in Panama, it's gotten millions of dollars of assistance from the US Coast Guard in recent years. Sen. Jay Rockefeller last week sent a letter to Carnival's CEO in which he expressed his "serious concerns" about February's "nightmarish" Triumph stranding, and outlined how the Coast Guard and American taxpayer have continually had to come to the cruise line's rescue.

"In just the past five years I am aware of 90 serious events that have occurred on your cruise ships," he writes, before outlining the costs of just a few of them:

He asks: "Given that you reportedly pay little or nothing in federal taxes, do you intend to reimburse the Coast Guard and the Navy for the cost of responding" to the above? Rockefeller wants an answer by April 1. He's not the only senator who's peeved. Chuck Schumer today called for a cruise ship passenger bill of rights, akin to the one that exists for air travelers, reports CBS New York. Under it, ships would have to pledge to supply things such as backup power and sanitary conditions, and pony up full refunds if "failures" occur.

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Showing 3 of 21 comments
slrv99
Mar 19, 2013 2:12 PM CDT
The reason why cruise lines incorporate in foreign countries is because of a stupid outdated law called the Jones Act (passed in 1920). They are not trying to avoid taxes as most suggest (they still pay taxes in whatever country they are registered in, so either way they pay). Given the chance all would probably gladly flag their ships in the United States. The Jones Act was meant to protect America workers in the shipping industry, but all it did was ship the jobs elsewhere especially for passenger service. The Jones act requires that ships that are flagged with the U.S. flag be built in the U.S. and be crewed by U.S. residents. Unfortunately U.S workers are pretty much Lazy and won't do these types of jobs like clean cabins and do ship maintenance etc. U.S. ship builders can't build passenger ships like the Italians, Germans or the Norwegians where most passenger ships are built. It's a sad fact but it is a fact. Just look at Norwegian Cruise Lines Hawaii product. Because it doesn't have a foreign port (which it would need to circumvent the Jones act) the ship is flagged with the U.S. flag was built in the U.S. and is crewed by U.S. Citizens. By far it's the worst cruise experience out there, and the service by U.S citizens is horrible compared to foreign workers on foreign flagged ships - it's just not the cruise experience that us lazy Americans expect. U.S Citizens and vacationers expect great service, but for some reason we can't provide it. To put a good product out there the cruise lines have been forced to register and higher foreign workers. All foreign flagged cruise lines that port in U.S. ports are subject to Coast Guard and DOT rules and restrictions. They routinely have Coast Guard maintenance and safety inspections. The system is broken but it's not all the cruise lines fault. If they want to compete for the U.S. vacationer their hands are tied because of an outdated law that was passed in 1920.
Cat-Lover
Mar 19, 2013 9:59 AM CDT
I am responsible to cover third party damage, passengers in my car and myself, for any auto accident in which I am involved. For that I buy insurance and without insurance I would have no help, no one to pay for medical care, damage repair or towing. Without such insurance, I have nothing and must take care of all related expenses by myself. That same requirement for insurance or self-insurance must apply to anyone else (same principle for Obamacare: We are responsible for ourselves). Thus, if a ship is adrift or in peril, the ship must pay for their needs, those of their passengers and recouperation, and if they don't, they're left on their own to resolve their problem.
backpath2
Mar 19, 2013 7:06 AM CDT
Foreign flagged cruise ships which dock at U.S. ports ought to be subject to U.S. Coast Guard safety regulations. If cruise lines do not wish to comply, their vessels should not be allowed to enter U.S. waters.