HQ 0111434 - Foreign-flag Yacht; Importation; Cruising license; HTSUSA; 46 U.S.C. App. 104 - United States International Trade Commision Rulings

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HQ 111434

January 3, 1991

VES-4-01-CO:R:IT:C 111434 GEV

CATEGORY: CARRIER

Mark J. Buhler, Esq.
Holland & Knight
800 North Magnolia Avenue
P.O. Box 1526
Orlando, Florida 32802

RE: Foreign-flag Yacht; Importation; Cruising license; HTSUSA; 46 U.S.C. App. 104

Dear Mr. Buhler:

This is in response to your letter dated December 3, 1990 (your ref: file no. 33776-1) requesting a ruling as to whether your client's foreign-flag yacht would be exempt from duty if and when it should visit the United States. Our ruling on this matter is set forth below.

FACTS:

Mi Gaea Limited, a company incorporated in the Island of Jersey, Channel Islands, proposes to temporarily enter its British-flag yacht, the MI GAEA, into the United States as part of a long shakedown cruise that would involve a voyage from Antibes, France, to South Florida, then on to the West Indies, and returning to Antibes several months later. The vessel would remain in Florida for up to three or four months during which time the vessel would undergo various repairs and be used for pleasure cruising. After this time the vessel would depart for the West Indies to continue the shakedown cruise and would eventually return to its permanent berth at Antibes, France, in late spring, 1991.

ISSUE:

Whether the entry of a foreign-flag yacht into the United States for three of four months for the purposes of repairs and pleasure cruising constitutes an importation resulting in the assessment of duty under the Harmonized Tariff Schedule of the United States Annotated.

LAW AND ANALYSIS:

According to Additional U.S. Note 1, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), vessels brought into the Customs territory of the United States by nonresidents thereof for their own use in pleasure cruising shall be admitted without formal Customs consumption entry or payment of duty.

As long as a yacht or pleasure boat is brought into the United States by a nonresident and is not offered for sale or charter to a U.S. resident, it is not dutiable. It is permissible to sell or charter such a vessel to a non-resident. If, however, the yacht is offered for sale or lease to a resident of the United States, a consumption entry must be filed.

You should know that section 4.94, Customs Regulations (19 CFR 4.94) concerns the issuance of cruising licenses which exempt foreign yachts from formal entry and clearance procedures (e.g., filing manifests, obtaining permits to proceed and exemptions from the payment of tonnage tax and entry and clearance fees) at United States ports. Section 4.94 was promulgated pursuant to title 46, United States Code Appendix, section 104 (46 U.S.C. App. 104) which authorizes the issuance of cruising licenses to pleasure vessels of countries which extend reciprocal privileges to United States vessels. Great Britain is on the list of countries appearing in section 4.94(b) whose yachts may be issued cruising licenses. The length of the cruising license is usually dependent upon the description of the vessel's cruise within United States waters; however, pursuant to section 4.94(c) in the discretion of the customs district director it may remain in force for a period of up to one year from the date of its issuance.

HOLDING:

The entry of a foreign-flag yacht into the United States for three or four months for the purpose of repairs and pleasure cruising does not constitute an importation resulting in the assessment of duty under the HTSUSA.

Sincerely,

B. James Fritz

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