HQ 0112958 - Vessel Repair; 19 U.S.C. 1466; Petition; Survey; Casualty; Entry No. C46-0016902-2; M/V NOSAC RANGER - United States International Trade Commision Rulings

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HQ 112958

January 5, 1994

VES-13-18 CO:R:IT:C 112958 GOB

CATEGORY: CARRIER

Chief, Residual Liquidation and Protest Branch New York Region
Six World Trade Center
New York, New York 10048-0945

RE: Vessel Repair; 19 U.S.C. 1466; Petition; Survey; Casualty; Entry No. C46-0016902-2; M/V NOSAC RANGER

Dear Sir:

This is in response to your memorandum dated November 19, 1993, which forwarded the petition submitted in connection with the above-referenced vessel repair entry.

FACTS:

The record reflects the following. The M/V NOSAC RANGER (the "vessel") is owned by Car Carrier, Inc. The petition was submitted by the vessel operator, Pacific-Gulf Marine, Inc. ("petitioner"). The vessel arrived at the port of Newark, New Jersey on May 8, 1993. A vessel repair entry, submitted on the same date, declared a damage survey which was completed in Antwerp, Belgium on April 29, 1993.

Petitioner's Claims

The petitioner states that no foreign repairs resulted from the survey, i.e., the survey was not followed by foreign repairs inasmuch as the vessel returned directly to the United States after the survey. It contends that Customs has ruled that inspection and survey fees are not dutiable unless the inspection and survey is integrally and directly connected with the process of making foreign repairs.

The petitioner has submitted a letter dated September 15, 1993 from the Chief, Inspections Department of the U.S. Coast Guard, which states in part:

...because these repairs were overseen by the vessel's class society we did not find it necessary to send an inspector to Belgium or issue a permit to proceed.

After reviewing the class society report it is my opinion that these repairs were necessary to keep the vessel in a seaworthy condition.

By letter of October 1, 1993, your office denied the application for relief.

ISSUES:

Whether the cost of the survey is dutiable pursuant to 19 U.S.C. 1466.

LAW AND ANALYSIS:

19 U.S.C. 1466 provides for the payment of duty at a rate 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 be employed in such trade.

The record indicates that on April 28, 1993 the vessel suffered damage after it struck the lock wall in the Boudewijns lock at the port of Antwerp, Belgium. On April 29, 1993, a damage survey was performed. The survey recommended that the damage be repaired before July 31, 1993. On April 29, 1993, the vessel left Antwerp; it arrived in the United States on May 8, 1993.

After a consideration of the record, we find that the cost of the survey is not dutiable because it is not an "expense of repairs made in a foreign country" within the meaning of 19 U.S.C. 1466(a). The cost of the survey is not an expense of repairs made in a foreign country because there were no foreign repairs; the repairs were accomplished in the United States.

HOLDING:

The cost of the survey is not dutiable pursuant to 19 U.S.C. 1466.

Sincerely,

Stuart P. Seidel
Director, International

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