HQ 0223692 - International cable laid under the territorial waters of the United States and brought, or not brought, on shore in the United States; cable first imported then laid under U.S. territorial waters between points in the United States; 19 U.S.C. 1322; 19 C.F.R. 10.41(f) - United States International Trade Commision Rulings

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HQ 223692

March 11, 1992

CON-2-07 CO:R:C:E 223692 C

CATEGORY: ENTRY LIQUIDATION

A.H. Dodeman
President
Margus Co., Inc.
P.O. Box 6126
Bridgewater, NJ 08807

RE: International cable laid under the territorial waters of the United States and brought, or not brought, on shore in the United States; cable first imported then laid under U.S. territorial waters between points in the United States; 19 U.S.C. 1322; 19 C.F.R. 10.41(f)

Dear Mr./Ms. Dodeman:

This responds to your letter of December 27, 1991, requesting a ruling regarding the dutiability of undersea cable laid between points in the United States through both United States territorial waters and international waters. We have reviewed the matter and our response follows.

FACTS:

We understand that fiber optic cable manufactured in Japan will be shipped to the United States to be transferred onto a cable laying vessel and laid under the sea between Carona del Mar and North Torey Pines, California. The cable route will follow a generally westward course from the California coast through U.S. territorial waters to a point off the coast at which it will turn generally southward, continuing through U.S. territorial waters; at approximately half the distance to the southern landing point, the cable route will enter international waters, still continuing in a generally southern direction; at a certain point, the cable route will turn generally eastward toward shore, reentering U.S. territorial waters; the cable will then come ashore at the southern landing point. Thus, the cable will connect the two California points and will lie under both U.S. and international waters. Although distances were not specified, from the map attached to your letter, it appears that the cable route will be laid primarily through and under U.S. territorial waters, with comparatively little of the entire distance laid through and under international waters. That part of the route within international waters runs generally parallel to the U.S. waters boundary and appears to lie only a short distance from it.

You requested a ruling regarding an interpretation of the duty exemption for international cable provided in section 10.41(f) of the Customs Regulations (19 C.F.R. 10.41(f)).

ISSUE:

On the above facts, does the duty exemption for international cable apply; if so, what is the proper duty application?

LAW AND ANALYSIS:

Under 19 U.S.C. 1322(a) (Title 19, United States Code), "[v]ehicles and other instruments of international traffic, of any class specified by the Secretary of the Treasury, shall be excepted from the application of the customs laws to such extent and subject to such terms and conditions as may be prescribed in regulations or instructions of the Secretary." (Emphasis supplied.) Under section 10.41(f) of the Customs Regulations, the following applies to undersea international cable:

International cables laid under the territorial waters of the United States but not brought on shore in the United States shall be admitted without entry or the payment of duty. With respect to international cables laid under the territorial waters of the United States but brought on shore in the United States, only that part of the cable in the United States between the point of entry into the territorial waters of the United States and the first point of support on land in the United States shall be admitted without the payment of duty.

Clearly, neither sentence of the above regulation applies to the instant case. On the facts here, we have merchandise, undersea cable, that is imported into the United States for the purpose of being used in the United States to make a telecommunications connection between two points in the United States. After importation, the cable is loaded onto a cable laying vessel and laid under and through U.S. territorial waters from point in the United States to point in the United States. The first part of the above regulation pertains to situations where undersea cable is laid between two points, neither of which is in the United States, where some part of the cable route traverses the U.S. territorial waters boundary, thus resulting in the cable entering United States territory without being brought on shore. In such an instance, the regulation exempts from entry and payment of duty that part of the cable that enters U.S. territory. The second part of the above regulation pertains to situations where undersea cable is laid between some point outside U.S. territory and a point on shore in the United States. In that instance the entry and duty exemption applies to that part of the cable lying between the U.S. waters boundary and the point at which the cable comes ashore. Duty is payable on the cable lying between the latter point and its remaining length.

The fact that some of the cable, in the instant case, passes through a segment of international waters is irrelevant. In fact, a view of the map might suggest that it is unnecessary, since the cable route runs for a relatively short distance parallel to, and just outside of, the U.S. waters boundary. Even if it is necessary, for reasons unapparent, it has no affect on the dutiability of the cable. The cable is first imported into the United States to clearly be joined to the commerce of the United States. Thus, the regulatory entry and duty exemption is inapplicable.

HOLDING:

The entry and duty exemption for international undersea cable, provided under section 10.41(f) of the Customs Regulations, does not apply to cable that is first imported into the United States and then laid between points in the United States under and through both international and U.S. territorial waters.

If you have any additional questions regarding this or any Customs matter, please contact this office.

Sincerely,

John Durant, Director

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