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HQ 112379


September 10, 1992

VES-5-08-CO:R:IT:C 112379 GFM

CATEGORY: CARRIER

Mr. R. Short
Thornley & Pitt, Inc.
48 Gold Street
San Francisco CA 94133

RE: User Fees; U.S. Government Owned Vessels; MARAD; 19 U.S.C. 58c(a)(1)

Dear Mr. Short:

This is in response to your letter dated July 10, 1992, requesting exemption from the statutorily mandated user fee of $397.00 assessed upon arrival of commercial vessels weighing 100 net tons or more. Our ruling is set forth below.

FACTS:

Claimant represents both the U.S.A. S/T CHESAPEAKE and the U.S.A. S.S. CAPE JUBY. Both vessels are owned by the United States and, under the auspices of the Secretary of Transportation acting through the Maritime Administration, have been chartered by the Military Sea Lift Command. The Maritime Administration has appointed American Foreign Shipping Co. as its agent. The S/T CHESAPEAKE arrived at San Francisco, California, on August 4, 1991, whereupon a user fee of $397.00 was paid on its behalf by claimant. The S.S. CAPE JUBY arrived at San Francisco, California, on March 30, 1991, whereupon a user fee of $397.00 was paid on its behalf by claimant. Claimant now objects to these charges and seeks a ruling regarding the applicability of the user fee statute to these vessels.

ISSUE:

Whether the subject vessels are considered non-commercial vessels exempting them from the user fees imposed by 19 U.S.C. LAW AND ANALYSIS:

Title 19, United States Code, section 58c(a)(1), provides for the assessment of a $397.00 user fee upon the arrival of a commercial vessel of 100 net tons or more. The statute does not provide an exemption for commercial vessels simply because they are operated by a government entity. Customs has determined, however, that a vessel owned by or under the complete control of the United States, not carrying passengers or merchandise in trade, is not a commercial vessel for purposes of 19 U.S.C.

In the present case, the subject vessels are exempt from the user fees established in 19 U.S.C. 58c(a)(1) in that they are not commercial vessels for purposes of that statute. The submitted documents indicate that the vessel's operation and movements were subject to the complete discretion of the U.S. Navy. The S/T CHESAPEAKE undertook repairs necessary to its efficient operation and the S.S. JUBY was involved in the transportation of military explosives. These activities signify that the vessels were under the control of the United States. Additionally, there is no indication in the submitted documentation that the subject vessels were used to carry passengers or merchandise in trade. Thus, in accord with prior Customs Service determinations, the vessels under consideration are not commercial vessels as that term is used in 19 U.S.C. 58c(a)(1), and are exempt from payment of the attendant $397.00 user fee.

HOLDING:

The above discussed MARAD-operated, U.S. Government-owned vessels used for the purpose of supporting operations of the Department of the Navy are not considered commercial vessels as that term is used in 19 U.S.C. 58c(a)(1) and are therefore exempted from the attendant $397.00 user fee.

Sincerely,

B. James Fritz

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