HQ 0111298 - Vessel repair; Equipment purchases; Six-month rule; Jack-up drill rig; Entry No. M89-0900741-0; Application for Relief; Vessel ADRIATIC VIII, V-1 - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1992 HQ Rulings > HQ 0111117 - HQ 0111331 > HQ 0111298

HQ 111298

March 4,1991

VES-13-18-CO:R:IT:C 111298 LLB

CATEGORY: CARRIER

Chief, Technical Branch
Commercial Operations
Pacific Region
One World Trade Center
Long Beach, California 90731

RE: Vessel repair; Equipment purchases; Six-month rule; Jack-up drill rig; Entry No. M89-0900741-0; Application for Relief; Vessel ADRIATIC VIII, V-1

Dear Sir:

Reference is made to your memorandum of September 4, 1990, which forwards for our consideration the Application for Relief from vessel repair duties filed by Global Marine Drilling Company of Anchorage, Alaska, concerning the above-captioned vessel repair entry.

FACTS:

The vessel ADRIATIC VIII left the construction yard as a new vessel on March 31, 1983, and remained continuously outside the United States until the time it arrived in the port of Anchorage, Alaska, on June 6, 1990, and filed the vessel repair entry presently under consideration.

ISSUE:

Whether materials purchased prior to but delivered or installed after the expiration of the six-month period commencing on March 31, 1983, may qualify for remission of vessel repair duties assessed in the present case.

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 documented under the laws of the United States to engage in the foreign or coastwise trade, or vessels intended to be employed in such trade.

The vessel repair statute provides in subsection (e) (19 U.S.C. 1466(e)), that when a vessel covered by the vessel repair statute:
...arrives in a port of the United States two years or more after its last departure from a port in the United States, the duties imposed by [section 1466] shall apply only with respect to... [purchases and repairs] made during the first six months after the last departure of such vessel from a port of the United States.

In this case, the vessel arrived in the U.S. for the first time and cannot meet the literal requirement of having previously departed from the United States. The intent of the provision is that duty be collected on repairs to vessels which may have been taken abroad for the purpose of obtaining foreign repairs, thus the six-month limitation on dutiability during periods of extended absence from the United States. The fact that a U.S.-flag vessel has not previously been in the U.S. should not, however, act to deny the benefit of the six-month duty cap. In the present case, the date of first entry of the newly constructed vessel into service is the date on which we consider the statutory six-month period to have begun for duty purposes.

In this case, relief is sought concerning six purchases for which the operator issued purchase orders prior to September 31, 1983, the six month anniversary of the initial entry into service by the vessel. Subsection (e) of the statute applies vessel repair duty to repair parts purchased or repairs made during the first six months of an extended absence. The statutory language is read disjunctively to apply, as the situation dictates, to either purchases or installations. (Customs Ruling Letter 109300, July 1, 1988).

HOLDING:

Following a thorough review of the facts in this matter, and after an analysis of the law and relevant precedents, we have determined that the Application should be denied for the reason that the purchases under consideration were made within the first six months of the relevant time period under section 1466(e).

Sincerely,

B. James Fritz

Previous Ruling Next Ruling