MIAMI -- The AFL-CIO, which owned 400 Carnival Corp. shares at the
end of fiscal year 2002, will ask Carnival Corp. shareholders to
vote to change the company's jurisdiction of incorporation from
Panama to the U.S.
The union federation's proposal will be presented at Carnival's
annual meeting in Southampton, England, on June 23.
In a May 14 Carnival Corp. filing, the AFL-CIO said
reincorporating in the U.S. would "improve ... corporate governance
and reassure its investors that they enjoy the necessary legal
The union pointed specifically to recent actions by Tyco Int'l
and Global Crossing, which switched their jurisdiction of
incorporations to offshore locations, which it said "brought
significant attention to the lack of investor protection in these
jurisdictions ... [and] have been strongly criticized by elected
The Carnival board of directors recommended shareholders vote
against the proposal and stated that a change in incorporation
would result in a "very significant decrease in ... after-tax
Cruise lines, with the exception of niche operators like Cruise
West and the now-defunct American Classic Voyages, are incorporated
in foreign countries like Panama, Liberia and Bermuda.
According to U.S. tax laws, companies in qualifying
jurisdictions are exempt from federal income tax on certain U.S.
source income derived from the international operation of ships,
Carnival said in the filing.