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Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Proposed Rules
If the cruise line has not yet paid or contractually committed any passenger deposits for such items to the thirdparty provider, the cruise line may refund them to the passenger. However, if these funds have been paid or contractually committed to such thirdparty providers, the cruise line will have paid, or will have to pay, those funds to the third-party provider on behalf of the passengers. CLIA states that passengers may be entitled to seek funds directly from such third parties.
CLIA believes that statutory law and current Commission regulations support its interpretation that UPR is limited to the passenger vessel transportation only and does not extend to other goods and services for which passengers may make advance payments to the cruise line.
CLIA also notes that most cruise passengers are offered cancellation insurance arrangements, or other means of protecting such third-party refunds, at time of booking.

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6. Publishing Information on How To Obtain Refunds The Fact Finding 30 Interim Report recommended the Commission mandate that: 1 PVOs provide on their websites clear instructions on how passengers may obtain refunds; and 2 PVOs submit current website addresses for their refund instructions to the Commission for publication on the Commissions website.22 The ANPRM
envisioned that this recommendation could be implemented by: 1 Revising the Form FMC131, Application for Certificate of Financial Responsibility, to require PVOs to provide the uniform resource locator URL for their refund instructions; and 2 amending 540.4
to require PVOs to amend their application if the URL changes. The Commission requested comment on this potential change.
C. Passenger Cancellations In addition to recommendations related to passenger refunds in the event of nonperformance of transportation, the Fact Finding 30 Interim Report also proposed that the Commission amend its regulations to ensure PVO financial responsibility in the event passengers cancel their booking with a PVO prior to or following certain governmental orders or declarations. Specifically, the Fact Finding 30 Interim Report recommended that: 1 A passenger be entitled to a refund if they cancel their booking no more than 60 days prior to a governmental order or declaration that results in the PVO canceling the voyage or delaying boarding of passengers by 22 Fact
Finding 30 Interim Report at 12.

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more than 24 hours; and 2 a passenger be entitled to a future cruise credit if they cancel their booking following the declaration of a public health emergency and the voyage occurs as scheduled.
The ANPRM requested comments on the recommendation regarding passenger refunds when the passenger cancels their booking, and the voyage is subsequently canceled as a result of governmental orders or declarations.
The ANPRM also requested comments on the recommendation regarding the provision of future cruise credit when the passenger cancels their booking following declaration of a public health emergency, but the voyage occurs as scheduled.
Summary of Comments Cruise Lines International Association CLIA
CLIA commented on the provision of the proposed rule which entitles passengers to a full refund when the passenger themselves canceled their booking within 60 days prior to a governmental order or declaration and the commensurate cancelled or delayed sailing so-called lookback refunds. It is CLIAs recommendation that the proposed rule should apply only in cases of:
i A declaration by the Secretary of Health and Human Services of a nationwide Public Health Emergency that ii Results from events that were public knowledge prior to the passengers cancellation.

CLIA maintains the correct standard for the type of emergency that would trigger the rulemaking is a federal nationwide Public Health Emergency declaration which affects most or all of the country and the cruise industry, such as the COVID19 pandemic. CLIA
also distinguishes an emergency such as the current pandemic, which was slowdeveloping and uncertain, from a local or regional event such as storm, which may develop quickly. Cruise line cancellations in the case of a local event give rise to a refund for passengers who were booked on the scheduled sailing, but do not lead to anticipatory passenger cancellations as much as 60
days before the sailing date. CLIA also asserts that state and local authorities have jurisdiction over only localized or regional situations that tend to be more limited in geographic scope, such as a highway obstruction that temporarily disrupts traffic to a cruise port. CLIA
believes that the inclusion of emergencies that do not at some point directly require cancellation would allow subjective interpretations as to
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whether the passengers were acting reasonably when they cancelled bookings due to the advent of the situation. Further, CLIA believes this would create incentives for passengers who had terminated bookings for personal reasons to try to capitalize on later cancellation rationales that had no bearing on their decision to cancel.
CLIA also believes that declarations from international organizations should not qualify as governmental declarations for this provision. CLIA contends that cruise lines are not likely to cancel U.S.
sailings based on a multinational organizations warnings unless the U.S.
government also decides to issue an order. Further, even if a foreign government took action to prevent embarking passengers at U.S. ports from calling in their jurisdiction, cruise lines could change their itineraries or omit foreign calls, and this would not likely result in either cancellation of the sailing or anticipatory passenger cancellations.
Passenger Vessel Association PVA
PVA asks the Commission to refrain from imposing a refund policy to include a situation in which a passenger voluntarily cancels a booking following the declaration of a public health emergency, but the voyage nevertheless occurs as scheduled. PVA believes that the proposed rule would go beyond the problem of nonperformance of transportation, as in this case there is no nonperformance of transportation as envisioned by 46 U.S.C. 44102. PVA
further poses the question of by whom is the public health emergency to be declared whether a federal, state, or local official. PVA maintains that this type of situation is best handled in the context of the commercial relationship between the cruise operator and the customer. PVA states that while the vessel operator may wish to provide a refund or cruise credit as a matter of company policy, it should not be required to do so by the Commission.
PVA also requests the Commission to make clear that the term public health emergency includes only events such as the coronavirus pandemic, in which the gathering of persons on a vessel has the potential to worsen the emergency.
IV. Discussion & NPRM Proposal A. Definition of Nonperformance The Commission believes that adding a definition for nonperformance to 46
CFR part 540 would provide clarity to passengers, PVOs, and the participating financial institutions as to when nonperformance has occurred. The Commission has also taken into
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