HQ 0109766 - Exemption from Customs user fees - United States International Trade Commision Rulings

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HQ 109766

October 19, 1988

VES-5-8-CO:R:P:C 109766 KMF

CATEGORY: CARRIER

Mr. David A. Romasco
Sea-Based Aerostat Program
G.E. Government Services
Range Projects Manufacturing
360 East Drive
Melbourne, FL 32904

RE: Exemption from Customs user fees

Dear Mr. Romasco:

This is in response to your letter dated September 21, 1988, in which you request that we exempt your vessels from the Customs user fees. You state that the vessels are under contract with the United States Coast Guard (Contract No. DTCG23-85-C- 20045) to furnish a specialized vessel and some crew and technicians for the purposes of assisting in the interdiction of drug smuggling. You state further that under the terms and conditions of the contract, the vessel's operation and movements are entirely at the discretion of the Coast Guard. We have contacted the Coast Guard and verified the above information.

The Customs user fees were set forth as a part of the Consolidated Omnibus Budget Reconciliation Act (COBRA). A fee of $397 is assessed on the arrival of a commercial vessel of 100 net tons or more. 19 U.S.C.{58c(a)(1).

The law does not provide an exemption for commercial vessels simply because they are operated by a government entity. See Customs Ruling Letters VES-5-8-CO:R:CD:C 108470 JM (Jul. 15, 1986) and VES-5-08-CO:R:CD:C 108653 JM (Nov. 7, 1986). Customs has determined, however, that a vessel owned by or under the complete control of the United States, not carrying passengers or merchandise in trade, is not a commercial vessel as that term is used in the COBRA.

Under the contract you describe, the vessel is exempt from the user fees established in 19 U.S.C. {58a. It is not a

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commercial vessel for purposes of that statute. Though G.E. crew and technicians remain on board the vessel, the vessel operation and movements are at the discretion of the Coast Guard. Consequently, the vessel is under the control of the United States. Furthermore, under the contract you describe, in which the vessel is used in assisting in the interdiction of drug smuggling, the vessel is not carrying passengers or merchandise in trade. Thus, in accord with Customs determinations, in the limited fact pattern described above, the vessel is not a commercial vessel as that term is used in the COBRA, and is not required to pay user fees.

Sincerely,

B. James Fritz
Chief

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