HQ 0110966 - Importation of foreign-built, foreign-flag pleasure vessel into the United States - United States International Trade Commision Rulings

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HQ 110966

September 12, 1990

VES-4-02-CO:R:P:C 110966 KVS

CATEGORY: CARRIER

Mr. Edward A. Odishaw
Swinton & Company
Robson Court
1000-840 Howe Street
Vancouver, British Columbia
CANADA V6Z 2MI

RE: Importation of foreign-built, foreign-flag pleasure vessel into the United States

Dear Mr. Odishaw:

This is in response to your letter of March 28, 1990, which requests a ruling regarding the importation of a foreign-built, foreign-flag vessel into the United States. You specifically inquire whether the vessel in question may enter the United States under a cruising license.

FACTS:

You state that you are a Canadian citizen with no residence in the United States, and that you intend to import a vessel into the United States, at either Portland, or Seattle, for commissioning and installations. The vessel is a new 47-foot sailboat that has been manufactured in Finland and will registered either in the British Virgin Islands (under British registry) or in Canada (under Canadian registry). You state that the vessel's intended use is for cruising and racing.

ISSUE:

Whether a foreign-built, foreign-flag pleasure vessel, imported for cruising and racing, may enter the United States under a cruising license.

LAW AND ANALYSIS:

We know of no provision which will allow you to enter the yacht in question under a cruising license. However, 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 non-residents for their own use in pleasure cruising shall be admitted without formal Customs consumption entry or payment of duty. Otherwise, yachts are dutiable under Heading 8903, HTSUSA.

As long as a yacht or pleasure boat is brought into the United States by a non-resident and is not offered for sale or charter to a U.S. resident within one year of arrival, it is not dutiable. It is permissible to sell or charter such a vessel to a non-resident during the one-year period immediately following the vessel's entry into the United States.

Although the vessel may not enter the United States under a cruising license, once the vessel has made entry, it is possible that the vessel may be issued a cruising license at the vessel's first port of arrival. Under 46 U.S.C. 104, Customs is authorized to issue a cruising license, on a reciprocal basis, to a pleasure vessel of a foreign country which exempts such a vessel from all of the requirements described above except the requirement for report of arrival at each United States port and the requirement for vessel entry at the first United States port of arrival from, a foreign port or place. The countries which have established reciprocity with the United States in this regard are listed in the section of the Customs Regulations on yacht privileges and obligations (19 CFR 4.94, copy enclosed). As you may know, both the British Virgin Islands and Canada are listed among those countries.

A cruising license may be issued to a qualifying foreign pleasure vessel on cruises of up to one year but are not to be issued indefinately to a pleasure vessel owned by an alien residing in this country permanently or, at least, for a protracted period of time.

Upon expiration of an existing cruising license, the document is to be surrendered and the vessel will be required to comply with the regular entry and clearance procedures. This means that the master of a vessel must obtain a permit before proceeding to each subsequent United States port and the vessel must clear Customs prior to departing for a foreign port. Also, the master of the vessel must report arrival to Customs at the first and each subsequent United States port immediately.

You may stay in a United States port indefinitely without a cruising license and, for that matter, you may cruise in the United States without a cruising license. In the latter event, however, you would be subject to the requirements in the navigation laws, and the fees associated with those requirements, described above.

If you have any further questions, please do not hesitate to contact this office.

Sincerely,

B. James Fritz

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