Cruise ships are registered abroad but they didn’t seek a US bailout
The claim: Did cruise ship companies ask for a bailout even though they register their ships in foreign countries to avoid paying U.S. income taxes?
A Facebook meme states cruise ship companies were seeking “financial assistance” from the U.S. government and that they were doing so even as their ships sail under the flags of other countries “all to avoid paying U.S. taxes.”
The meme stated, for example, that the Walt Disney Co.’s vessels operate under the Bahamian flag, while Celebrity Cruises sail under the Maltese flag and Carnival ships fly the Panamanian flag.
Digging into the claim
The meme correctly states that the major U.S. cruise lines have registered their vessels in foreign countries. Disney’s corporate website doesn’t specifically state where there ships are registered, but media reports, including an editorial in the Racine, Wisconsin, Journal Times cited the Bahamas as their registry. Carnival’s ships are registered in Panama. Celebrity Cruises is owned by Royal Caribbean, which sails under the Liberian flag.
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And, yes, by sailing under a foreign flag, meaning the ships are registered in other countries, means the cruise companies are, in legal terms, foreign companies and not required to pay the U.S. corporate tax rate of 21%.
What about the ask for “financial assistance”?
The claim in the meme apparently refers to various appropriations by Congress, and signed by President Donald Trump, to assist companies and employees suffering financial hardship as a result of the nationwide coronavirus economic shutdown.
Those dollars went to a variety of U.S. corporations, from airlines to restaurant chains. But the March 27 CARES Act economic stimulus package, plus subsequent appropriations, excluded cruise lines, which were ineligible for either grants or loans through these programs.
More: Disney Cruise Line, Cunard Line cancel sailings well into the fall due to coronavirus
There was discussion about including the cruise lines in the stimulus and aid legislation. However, media reports, including those in the Palm Beach Post, noted speculation that, to be eligible for U.S. government assistance programs, the cruise companies would need to agree to pay U.S. taxes and perhaps accept more stringent environmental regulations.
Neither came to fruition. The Cruise Line Industry Association, which is the industry trade group, steadfastly said its member companies had not asked for federal or public assistance.
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But Carnival Cruises did receive $6 billion in a backdoor deal after the Federal Reserve announced plans to buy “unlimited” bonds to free up capital for lenders to invest in companies crumbling under corporate debt, such as Carnival.
Carnival was able to raise the capital by issuing a combination of bonds and equity that would have previously lacked buyers. Other cruise companies have also accessed money from the capital markets and other financial entities. However, they have also warned investors that their financial futures are uncertain even after they resume cruise operations this summer.
Our ruling: Partly false
Yes, cruise companies register their ships in foreign countries to avoid paying U.S. corporate taxes. But they did not receive a direct government bailout as part of the pandemic corporate assistance money approved by Congress. They did not publicly ask for a bailout. And it is not even clear that they privately asked for one. Based on our research, we rate this claim as PARTLY FALSE.
Our fact-check sources
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This article originally appeared on USA TODAY: Fact check: Cruise ship companies didn’t seek a US COVID-19 bailout