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Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules nonperformance occurs unless the ticket contract or other passenger vessel operator policy allows a longer period of time for such requests.

The Commission could include this provision in part 540 and require that the financial responsibility instrument specify the time period for passengers to file refund requests.
Summary of Comments No comments were received which specifically address the submission of refund requests.
3. Deadline for Refund Payment Under the Financial Instrument Commission regulations do not currently specify a time period within which passengers must receive a refund under a PVO financial responsibility instrument. The Fact Finding 30 Interim Report recommended that the Commission specify two different timeframes for payment depending on whether nonperformance was due to a governmental order or declaration: 1
When nonperformance is due to a governmental order or declaration, full refund payments must be made within 180 days after the passenger requests a refund; and 2 in all other cases, full refund payments must be made within 60 days after the passenger requests a refund.18 The Interim Report also recommended that a refund payment be deemed timely notwithstanding that the passenger may not immediately have access to the funds due to the rules and processes of any third party services provider.19
The Commission requested comment on prescribing a deadline for payment of refunds from financial responsibility instruments providers as a general matter. The ANPRM proposed two different timeframes for payment depending on whether nonperformance is due to a governmental order or declaration, and the ANPRM adopted the deadlines recommended in the Interim Report 180 days when there is a governmental order or declaration; 60
days in all other cases.

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Summary of Comments Passenger Vessel Association PVA
It is PVAs position that the Commissions proposed bifurcated time frame for refunds, which varies depending on the reason for the cancellation, is potentially confusing and unfair. PVA poses the question of how the regulation would be applied in the case of a governmental order to cancel sailings that applies to some Finding Interim Report at 11.
at 12.

PVOs that are regulated by the Commission, but not all. PVA states that in such a case, smaller PVOs, that may not be subject to a No Sail Order but that voluntarily choose to cancel a cruise in the interest of passenger and crew health and safety, would have to provide requested refunds in a shorter time period than larger PVOs. PVA
believes this is an unfair policy distinction and recommends that a period of payment of the refund be no more than 180 days after the customers claim is submitted, no matter the reason for the nonperformance of transportation.
Should the Commission choose to retain a specific refund process in the event of nonperformance due to a governmental order or declaration, PVA
maintains that it should be very precise as to what triggers this process.
PVA believes that, as a general rule, states, counties, and municipalities have no or very limited authority over vessel safety and navigation. PVA therefore recommends that only orders and declarations from federal agencies with clear maritime authority be specified as the triggering events for the refund process.

for water transportation and all other accommodations, services, and facilities relating thereto not yet performed; this includes port fees and taxes paid, but excludes such items as airfare, hotel accommodations, and tour excursions.21
The Fact Finding 30 Interim Report recommended the Commission specify that refund payments must include all fees, including ancillary fees, paid to the PVO by the passenger. The Commission requested comment on whether to expand the definition of unearned passenger revenue and the scope of the ancillary fees to be included in any revised definition. The Fact Finding 30
Interim Report discusses the following types of ancillary charges paid by passengers to PVOs prior to sailing:
Gratuities, shore excursions, pre-cruise onboard purchases, port fees, and taxes.
Of these, the current definition of unearned passenger revenue expressly includes port fees and taxes and excludes excursions. The Interim Report does not discuss refunds for airfare or hotel accommodation.
To facilitate comment, the Commission included the following draft definition in the ANPRM:

4. Form of Refund Payment Under the Financial Instrument Commission regulations do not specify in what form refund payments must be made under PVO financial responsibility instruments.
The Fact Finding 30 Interim Report recommended the Commission specify that refund payments must be made in the same manner as the passengers original payment, e.g., check, electronic funds transfer, or credit card chargeback.20 The ANPRM requested comments on the recommendation.

Summary of Comments
Summary of Comments No comments were received which specifically address the form of refunds.
However, it is the Commissions experience that financial instrument providers will not likely be able to provide refunds in the same manner as the passengers original payment. The Commission understands refunds provided by financial instruments are typically in the form of checks that are mailed to the passenger.
5. Defining Unearned Passenger Revenue Commission regulations provide that the PVO financial responsibility instruments must provide coverage for unearned passenger revenue, which is defined as passenger revenue received
Unearned passenger revenue means that passenger revenue received for water transportation and all other related accommodations, services, and facilities relating thereto not yet performed; this includes port fees, taxes, and all ancillary fees remitted to the passenger vessel operator by the passenger.

Cruise Lines International Association CLIA
CLIA urges the Commission to clarify that unearned passenger revenue UPR should include cruise passage fare and related cruise lines goods and services amounts collected by the cruise line, such as port charges and taxes, prepaid on-board purchases, gratuities, and shore excursions at the cruise lines own or affiliated destinations. CLIA argues that UPR should not include deposits for airfare, non-affiliated shore excursions or other third party provider costs for which the cruise line is not still holding the passengers deposit or is contractually obligated to pay such deposit to a third-party provider.
CLIA maintains that if a cruise line contracts with an airline, shore hotel resort, attraction or other unaffiliated arms length third party services provider, the cruise line would be acting as an agent for the passenger in booking such accommodations or activities for the passengers benefit.

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