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HQ 111928

November 20, 1991

VES-13-18-CO:R:IT:C 111928 LLB

CATEGORY: CARRIER

Mr. T.W. Kennard
B.A. McKenzie & Co., Inc.
813 Pacific Avenue
Tacoma, Washington 98402

RE: Vessel repair; Fishing vessel; Breakdown at sea; No permit to touch and trade issued

Dear Mr. Kennard:

Reference is amde to your letter, received by facsimile transmission on October 2, 1991, concerning the applicability of the vessel repair statute (19 U.S.C. 1466(a)) to unanticipated repairs made in a foreign shipyard to a United States-documented fishing vessel.

FACTS:

You report that the fishing vessel KRISTY, an albacore catching vessel, departed the port of Newport, Oregon, on August 20, 1991, bound for fishing grounds in the North Pacific. The vessel's reduction gear broke on August 31, 1991, leaving the vessel dead in the water. The vessel was towed to the nearest port, Queen Charlotte City, British Columbia, Canada, in order to be repaired. The repairs were completed on September 7, 1991, and the vessel returned to fishing until September 29, 1991, at which time it first reentered the United States at the port of Westport, Washington.

ISSUE:

The question posed is whether, given the circumstances, the provisions of the vessel repair statute are applicable.

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.

While not documented for either the foreign or the coastwise trade, a fishing vessel is deemed to be in trade when it departs the United States with the intent to proceed to a foreign port or place for the purpose of obtaining repairs or shipyard services, or purchasing vessel equipment. When such is the case, a fishing vessel must follow the procedures described in section 4.15, Customs Regulations (19 CFR 4.15). In such circumstances, a vessel repair entry is required to be filed and the surrender of the permit to touch and trade is mandated.

HOLDING:

Since a fishing vessel which obtains unexpected repairs after departing the United States and while engaged in fishing operations is neither documented for the named trades nor deemed to have departed the United States in trade, there is no duty liability for the value of such foreign shipyard services.

Sincerely,

James Fritz
Chief
Carrier Rulings Branch

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