HQ 0223874 - Ruling request concerning claim for drawback on parts used to manufacture an icebreaker; 19 U.S.C. 1313(j); 19 CFR 191.141; 19 CFR 101.1(k). - United States International Trade Commision Rulings

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HQ 223874

October 9, 1992

DRA-2-02 CO:R:C:E 223874 TLS

CATEGORY: ENTRY

Mr. Charlie Comeaux
Edison Chouest Offshore, Inc.
P.O. Box 309
Galliano, Louisiana 70354

RE: Ruling request concerning claim for drawback on parts used to manufacture an icebreaker; 19 U.S.C. 1313(j); 19 CFR 191.141; 19 CFR 101.1(k).

Dear Mr. Comeaux:

Your letter of April 2, 1992 has been received by this office for consideration along with your subsequent submission of June 15, 1992. We have considered the information submitted as well as the telephone call of October 6, 1992, and our decision follows.

FACTS:

You imported various parts into the United States which will be used to construct an icebreaking research vessel. The parts were entered through 14 different consumption entries from June 20, 1990 to February 5, 1992. The vessel was completed in early 1992 and departed from Louisiana destined for the Antarctic. The icebreaker will operate year-round in that region of the world. It is under a 10-year charter to Antarctic Support Association.

The vessel is to be based in Chile during its assignment. The owner of the vessel states that it will not be returned to the United States for any reason. The ship has a life expectancy of 20 years.

ISSUE:

Whether drawback may be claimed on imported parts used to manufacture a vessel that will leave the Customs territory and never return.

LAW AND ANALYSIS:

Under 19 U.S.C. 1313(g), the materials for construction and equipment of vessels built for foreigners may be claimed for drawback purposes, notwithstanding the fact that the vessels may not have been exported within the strict meaning of the term. This is also implemented by 19 CFR 191.111.

"Exportation" has been defined as "a severance of goods from the mass of things belonging to this country with an intention of uniting them with the mass of things belonging to some foreign country. United States v. The National Sugar Refining Co., 39 C.C.P.A. 96, 100 (1951). In this case, while the vessel will be docked and based in Chile between assignments, it will not be formally entered into Chilean Customs territory, according to the owner. Clearly, there is no intent to unite the vessel with the mass of things belonging to Chile, or any other country for that matter. Such is not required to find exportation in this case pursuant to section 313(g), however.

Section 313(g) requires that the vessel be built for foreign account and ownership. The manufacturer is a domestic company that plans to retain ownership of the vessel and lease it to research organizations. There is no indication from the manufacturer (who would also be the exporter) that ownership will transfer to a foreign concern at some point. More importantly, a domestic company will retain ownership at least at the point the vessel will leave the Customs territory, exported or not. Therefore, the requirements of 19 U.S.C. 1313(g) have not been met in this case and the manufacturer of the vessel is not eligible for drawback as a result.

HOLDING:

Unless a vessel is made for foreign account and ownership there is no eligibility for drawback under 19 U.S.C. 1313(g) even if the vessel is sent outside of U.S. waters.

Sincerely,

John Durant, Director

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