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"Beyond those 24 nautical miles lie the high seas, where national laws have no authority"

That's not really the case. A nation's EEZ (exclusive economic zone) extends at least 200 miles, within which a nation has certain rights to regulate economic activities. The flag country has jurisdiction over the ship at all times. And, the flag country can make whatever arrangements they want with other powers. For instance, it's routine for the US Coast Guard to stop ships travelling in "international waters" because it has agreements with, eg, the government of Panama that it may do so.

http://en.wikipedia.org/wiki/United_Nations_Convention_on_th...

> most [cruise ships] are registered under flags of convenience for tax purposes

I wonder why countries allow this. For example, by withholding (dis)embarkation services from vessels known to be flouting the local tax system. It's one thing to travel around the world on a ship registered in Panama. It's another to book a one-night hotel stay on a ship which never leaves radio distance of your home, yet claims no tie to your country.

See the Jones act http://en.wikipedia.org/wiki/Merchant_Marine_Act_of_1920 which forbids this. Means that cruise ships can't go from one U.S. port to another. http://www.cruiselawnews.com/2011/09/articles/flags-of-conve...
The Jones act is for cargo. The equivalent for passenger ships (including cruise liners) is the Passenger Vessel Services Act[1], and it has a number of exemptions carved out for popular cruise routes.

For example, http://cruise.expedia.com/Itinerary5.aspx?item=849031 is a foreign-built foreign-flagged ship that departs from San Francisco, docks in Los Angeles, and has a final destination of Miami. This is permitted because the itinerary includes a port outside of North America.

Plus, the PSVA is implemented as a monetary fine. There are cruise lines that will let passengers violate PSVA for an additional fee.

[1] https://en.wikipedia.org/wiki/Passenger_Vessel_Services_Act_...

foreign cruise ships
Yes, non-U.S.-flagged, which is almost all cruise ships.
It may be a majority but that's only for tax reasons. A lot more ships would be locally-flagged if they weren't using it as a loophole.
I used to live 30km(18 miles) away from a border with another EU country - I could get in my car and within half an hour be in a completely different country, where gambling, prostitution and drugs(to an extent) were legal(but they are not in mine). Because of the Schoengen zone there are no passport checks, getting across the border to a casino or a brothel was no more difficult than going to a supermarket. No tax paid in my home country either. I see those ships in the same way.
I would wager it's because they have much bigger things to worry about than a (comparatively) small population of well-heeled folks who want to go get drunk, gamble, and get laid for a night or two. If it ever becomes a Problem(tm) such that the state feels like they're losing significant sums of revenue, I'd wager there would be a crackdown.