HQ 0112441 - Vessel Repair; Heavy Weather; Survey; PRESIDENT TRUMAN, v- 41; Entry No. C27-0067823-1; 19 U.S.C. 1466. - 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 > 1993 HQ Rulings > HQ 0112399 - HQ 0112591 > HQ 0112441

HQ 112441

February 24, 1993

VES-13-18 CO:R:IT:C 112441 JBW

CATEGORY: CARRIER

Deputy Regional Director
Commercial Operations
Pacific Region
1 World Trade Center
Long Beach, CA 90831

RE: Vessel Repair; Heavy Weather; Survey; PRESIDENT TRUMAN, v- 41; Entry No. C27-0067823-1; 19 U.S.C. 1466.

Dear Sir:

This letter is in response to your memorandum that forwards for our review the application for relief filed in conjunction with the above-referenced vessel repair entry.

FACTS:

The record reflects that the subject vessel, the PRESIDENT TRUMAN, arrived at the port of Los Angeles, California, on April 25, 1992. Vessel repair entry, number C27-0067823-1, was filed on April 27, 1992. The entry indicates among other items that the vessel was surveyed while in Japan to ascertain the extent of damages caused by heavy weather encountered by the vessel during its voyage between Seattle, Washington, and Yokohama, Japan. The record demonstrates that the American Bureau of Shipping surveyor found that the vessel required repairs to the shell, frame, and deck. The surveyor, however, found that the vessel was fit to proceed. The vessel returned to San Pedro, California, where permanent repairs were made.

ISSUE:

Whether the cost of a survey performed to ascertain whether repairs are necessary to correct damage resulting from heavy weather is subject to vessel repair duty if the actual repairs were delayed until the vessel returned to the United States. LAW AND ANALYSIS:

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

The Customs Service has held that the costs of surveys undertaken to ascertain the extent of damage sustained by a vessel or whether repairs are deemed necessary are dutiable as part of the repairs that are accomplished. C.I.E. 429/61; C.S.D. 79-2, 13 Cust. B. & Dec. 993 (1979); C.S.D. 79-277, 13 Cust. B. & Dec. 1395, 1396 (1979). The Customs Service has held that inspections not resulting in repairs are not dutiable. Headquarters Ruling Letter 110395, dated September 7, 1989; see American Viking Corp. v. United States, 37 Cust. Ct. 237, 247, C.D. 1830 (1956).

The record reflects that the vessel encountered heavy weather and sustained damage while en route between the United States and Japan. The vessel proceeded to Japan where a surveyor from the American Bureau of Shipping examined the vessel. The surveyor found damages to the vessel that needed repair. The surveyor determined, however, that the vessel was fit to proceed. Permanent repairs were made in San Pedro, California. From the above-cited legal authority, we determine that the cost of the American Bureau of Shipping survey is not subject to duty, for no foreign repairs were made as a result of that inspection.

HOLDING:

The cost of a survey performed to ascertain whether repairs are necessary to correct damage resulting from heavy weather is not subject to vessel repair duty if the actual repairs were delayed until the vessel returned to the United States.

Sincerely,

Acting Chief

Previous Ruling Next Ruling