Office of the Inspector General Seal


Inspections Division

Inspection of the Cruise
Ship Exemption From
Immigration User Fees

Report Number


September 1999







The Role of User Fees in the Inspection Process

A Legislative History of the Immigration User Fee

The Seaport Inspection Process

The Caribbean Market

The Growth of the Cruise Industry



  1. The exemption from payment of the user fee by cruise ship passengers creates an inequity.
  2. The user fees paid by airline passengers are funding the majority of cruise ship inspections.
  3. The Immigration User Fee Account will be unable to fully fund inspections in Fiscal Year 2000.
  4. The projected growth of the cruise industry will increase demands on INS and affect INS’s ability to provide inspection services.


  1. U.S. citizens on cruise ships are not required to undergo a thorough inspection process.
  2. Non-U.S. citizen passengers frequently have been inspected at U.S. air ports-of-entry prior to boarding the ship.
  3. Cruise passengers present a low risk.
  4. Cruise personnel assist in the inspection process.


Appendix I - Methodology and Scope

Appendix II - The Immigration User Fee Account

* * * * *

September 29, 1999

                                        IMMIGRATION AND NATURALIZATION SERVICE

FROM:                            ROBERT L. ASHBAUGH
                                        ACTING INSPECTOR GENERAL

SUBJECT:                       Inspection of the Cruise Ship Exemption From Immigration
                                        User Fees, Report Number I-99-13

The Office of the Inspector General (OIG), Inspections Division, in response to a request from the Immigration and Naturalization Service (INS), has conducted a review of whether INS is justified in continuing its effort to remove the exemption from payment of the immigration user fee extended to certain cruise ship passengers. Since 1995, INS has sought to remove the exemption, first in proposals for immigration reform legislation and subsequently in annual appropriations requests. To date, INS has been unsuccessful.

Each passenger, unless specifically exempted by law, must pay a $6 immigration user fee for inspection services provided at an air or sea port-of-entry prior to being allowed entry into the United States. The travel agency or commercial carrier that issues the ticket to the passenger collects and remits the user fee for deposit into the Immigration User Fee Account (IUFA). The IUFA provides the sole source of funding for all operational, detention, administrative, and infrastructure costs related to INS inspection operations at air and sea ports-of-entry. IUFA obligations are exceeding receipts, and INS projects the IUFA deficit will reach $54 million by Fiscal Year (FY) 2000.

We conclude that INS is justified in continuing its effort to remove the exemption from user fees for cruise ship passengers who receive an inspection service. In 1990, Congress removed a similar exemption for airline passengers, citing a “fundamental inequity” that prevented the charging of all air passengers equally. It is reasonable for INS to expect payment for inspection services provided, regardless of whether the mode of transportation used by the passenger is an air or sea carrier. Since FY 1994, cruise ship passengers have accounted for 9.48 percent of all INS inspections at air and sea ports-of-entry, yet have contributed 0.59 percent of the fees collected. The growth in the cruise industry and the projected deficit in the IUFA will make it increasingly difficult for INS to cover the costs of providing air and sea inspections while maintaining a level of service acceptable to both INS and the industry.

Weighing against removing the exemption is the likelihood that cruise ship passengers present a low risk of attempted illegal entry. In addition, many non-U.S. citizen passengers will have been inspected upon arrival at air ports-of-entry prior to boarding the cruise ship. Therefore, these passengers have already been deemed eligible to enter the United States. Regardless of the degree of risk, the law requires INS to inspect non-U.S. citizens each time they attempt entry into a U.S. port. Because of this requirement, it is reasonable for INS to expect payment of a user fee for the inspection service it provides.

Removing the exemption for cruise passengers should ultimately serve the interests of both the cruise industry and INS. The additional user fees collected should assist in covering the increasing cost of conducting inspection operations. It is important to note, however, that the removal of the exemption for cruise ship passengers is insufficient to provide INS with a long-term solution to shortages in the IUFA. Therefore, INS must seek additional solutions to address the projected IUFA funding crisis or examine the issues related to the increasing costs of providing inspection services at air and sea ports-of-entry.

We appreciate the cooperation that your staff extended to us as we conducted our review. If you have any suggestions of how we might improve our review process, or if we can provide you with any additional information, please let us know.


cc:   Kathleen Stanley
        Immigration and Naturalization Service

        Vickie L. Sloan
        Departmental Audit Liaison Office