Aside from the majority revenue generated by U.S. passengers, cruise lines are independent of the U.S. economy. Even though nearly 75 percent of passengers are U.S. citizens, “cruise line corporations and their ships are not traditionally American-owned or registered …” (Tomlinson, 2007)
Cruise line companies are not concerned about increasing minimum wage, rising insurance premiums, or higher corporate taxes. Cruise lines escape federal taxes and labor laws by registering their corporations and vessels in foreign countries [such as] Panama, Liberia, and the Bahamas. In fact, employees of cruise lines are often mistreated due to lackadaisical labor laws. Worst of all, employees will find little to no recourse pursuing litigation. Likewise, a U.S. citizen passenger faces the same predicament.
A vessel’s country of registration is commonly referred to as the “flag of convenience” (FOC). Flagging a ship under a foreign flag for the convenience of the cruise line is nothing new, nor is it rare. The majority of cruise ships today are registered to Panama, Liberia, or the Bahamas. It is important to pay close attention as many vessels within the same fleet are often registered to different countries. Carnival Corporation, for example, has flagged their cruise vessel Celebration under Panama and Destiny under the Bahamas. Cruise lines often avoid drawing attention to the FOC of by using the term “headquartered in Miami, Florida.” It is important to understand that while the majority of these cruise lines have their headquarters in Miami, they are not registered in the U.S. Thus, U.S. laws do not apply and passengers are at the mercy of maritime law.