HQ 0111019 - U.S. parts; 19 U.S.C. 1466(d)(2); insufficient evidence Vessel: M/V THOMPSON LYKES V-124 - United States International Trade Commision Rulings

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HQ 111019

August 1, 1990

VES-13-18-CO:R:P:C 111019 KVS

CATEGORY: CARRIER

Deputy Assistant Regional Commissioner
Commercial Operations Division
423 Canal Street
New Orleans, LA 90130-2341

RE: U.S. parts; 19 U.S.C. 1466(d)(2); insufficient evidence Vessel: M/V THOMPSON LYKES V-124
Vessel Repair Entry No. C53-0008237-3

Dear Sir:

This is in response to your memorandum of May 1, 1990, which forwards for our consideration an application for relief filed in connection with the THOMPSON LYKES V-124, vessel repair entry no. C53-0008237-3. Our findings are set forth below.

FACTS:

The THOMPSON LYKES, an American-flag vessel, underwent boiler repairs on December 1-2, 1989, at Cristobal, Panama. The vessel arrived in the United States at Houston, Texas, on January 7, 1990. Entry was made on January 9, 1990.

An application for relief was timely filed on March 5, 1990, and seeks relief for duties assessed on the boiler repairs.

LAW AND ANALYSIS:

Title 19, United States Code, section 1466(a) provides, in pertinent part, for payment of duty in the amount of 50 percent ad valorem on the cost of foreign repairs to vessels engaged, intended to engage, or documented under the laws of the United States to engage in the foreign or coastwise trade.

In requesting relief for boiler repairs, the application for relief states,"All material and labor flown in from New Orleans, La. and was of U.S. origin." By this statement, we assume that the applicant requests relief pursuant to 19 U.S.C. 1466(d)(2). (We are compelled to note that this is not the first instance in which applications submitted by this party have not identified a specific basis for relief, and we issue this ruling with the
caveat that no further assumptions will be made on the applicant's behalf).

In rulings regarding the use of foreign labor to install parts of U.S. origin, we held that, inasmuch as we have come to learn of the submission of affidavits which misrepresent place of manufacture, it is our policy to require direct evidence of U.S. manufacture (see Customs Letter Rulings 110743 KVS (dated June 21, 1990 and 110717 KVS (dated June 28, 1990)). Although the application currently before us involves the use of U.S. labor, the same issues of verification arise, and we hereby extend this requirement to situations involving U.S. labor.

The evidence currently before us indicates only that the items used to effect the repairs were purchased in the United States. Indeed, the invoice submitted identifies the party from whom the items were purchased as the "authorized distributors" of certain parts. We are unable to discount the possibility that one or more of the parts utilized were manufactured abroad and imported by U.S. distributors for domestic sale.

Therefore, in the absence of direct evidence indicating manufacture in the U.S., the requirements for remission under 19 U.S.C. 1466(d)(2) have not been met and remission cannot be granted. Accordingly, the cost of the labor and parts is dutiable. The application for relief is denied.

HOLDING:

Where remission of duty is sought pursuant to 19 U.S.C. 1466(d)(2), in the absence of direct evidence of U.S. manufacture, the cost of the parts and labor utilized in effecting repairs is dutiable.

Sincerely,

B. James Fritz

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