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 > 1995 HQ Rulings > HQ 086011 - HQ 112849 > HQ 112800

Previous Ruling Next Ruling
HQ 112800





November 15, 1994

VES-3-CO:R:IT:C 112800 LLB

CATEGORY: CARRIER

Mr. T.W. Kennard, President
B.A. McKenzie & Company, Inc.
813 Pacific Avenue
Tacoma, Washington 98402

RE: Vessel entry and clearance; Fisheries; Guam; Vessel repair declaration and entry; Two year rule; Foreign territory; High seas; United States-flag fishing vessel

Dear Mr. McKenzie:

You have written requesting guidance on several issues concerning the operation of a United States-flag tuna fishing vessel. Your questions involve the entry and clearance laws, the fisheries laws, and the vessel repair statute. We will recount the facts presented in your letter and proceed to answer the issues addressed.

FACTS:

Several operating scenarios are presented for consideration, all involving the use of a United States-documented fishing vessel. There are three geographical focus points presented, which are San Diego, California, Guam or American Samoa, and New Zealand. There are seven sailing itineraries presented, which are as follows:

1. The vessel would depart San Diego and proceed to the high seas to fish commercially. The vessel would return to San Diego to off-load its own catch of fish.

2. The vessel would depart San Diego and proceed to the high seas to fish commercially. The vessel would then proceed to Guam to off-load its own catch of fish. The vessel would continue to make fishing voyages out of and returning to Guam over a period of 14 months, each time off-loading in Guam. After 14 months, the vessel would return to San Diego, presumably in ballast.

3. The vessel would engage in the same itinerary as described in number 2, above, except that the period of its service after departing from San Diego would be more than 24 months.

4. The vessel would engage in the same itinerary as described in number 2, above, except that after repeatedly departing from and returning to Guam to off-load catches the vessel would sail to New Zealand to enter a drydock, this occurring within 6 months of departure from San Diego. After the shipyard work is completed the vessel would return to Guam for more fishing, ultimately returning to San Diego before the expiration of 24 months from the date it initially departed from there.

5. The vessel would engage in the same itinerary as described in number 4, above, except that the period of its absence since departing from San Diego would be longer than 24 months.

6. The vessel would engage in the same itinerary as described in number 4, above, except that arrival in New Zealand would occur more than 6 months after the vessel departs from San Diego, and arrival in San Diego is less that 24 months from the date of departure from there.

7. The vessel would engage in the same it.inerary as described in number 4, above, except that arrival in New Zealand would be more than 6 months after departure from San Diego, and arrival in San Diego would occur more that 24 months after the date of departure from that port.

ISSUE:

The issues for consideration are whether the vessel entry and clearance statutes are applicable to any of the proposals, whether a Customs Form 226 must be presented (either as a declaration or an entry) in connection with any of the voyages, and whether the vessel's logs must be available for Customs inspection upon entry of the vessel in the United States.

LAW AND ANALYSIS:

Vessels of the United States are required to enter under section 434, Tariff Act of 1930, as amended (19 U.S.C. 1434), and to clear under section 4197 of the Revised Statutes of the United States (46 U.S.C. App. 91), when arriving from or departing for a foreign port or place. There is no requirement that a United States-documented vessel clear for or enter upon return from a voyage solely to the high seas unless a hovering vessel is visited during the voyage.

The phrase "foreign port or place" is not defined in the Customs or navigation laws. There is a definition of the term "United States" in the Customs laws which we adopt. Section 401(h), Tariff Act of 1930, as amended (19 U.S.C. 1401(h)), states that the United States, "...includes all Territories and possessions of the United States except the Virgin Islands, American Samoa, Wake Island, Midway Island, Kingman Reef, Johnston Island, and the island of Guam." Guam and American Samoa are, therefore, considered to be foreign ports or places for purposes of the issues raised in this ruling.

Since Guam and American Samoa are considered foreign ports or places, it would be necessary for a vessel departing the United States and intending to call at those locations to obtain a clearance from Customs. Likewise, it would be necessary for a vessel arriving from either of those locations to formally enter with Customs. These requirements are not affected by the actual or intended duration of a vessel's absence from the United States.

Part of the vessel entry process for American-flag vessels involves the submission of a Customs Form 226. This is a dual use form and may be submitted either as a vessel repair declaration or a vessel repair entry. As a part of the formal entry package, the master of a U.S. vessel is required to include a Form 226, submitted as a declaration. This submission is required to be made as a negative declaration if no foreign shipyard work was performed (see section 4.7(d)(1)(ii), Customs Regulations (19 CFR 4.7(d)(1)(ii)). The vessel repair statute itself, section 466, Tariff Act of 1930, as amended (19 U.S.C. 1466(e)(1)), provides that for American-flag vessels which return to the United States two years or longer after last leaving, the only purchases which are subject to duty are those for repairs, parts, materials, and equipment made during the first six months of the extended absence, and those made for fish nets and netting at any time during the absence. Although it is necessary to file a declaration for all purchases made during the absence, only those items purchased within the time limitations described above are required to be reported on a Form 226 submitted as an entry.

In light of the preceding discussion, it is possible to summarize our findings as applied to the seven numbered scenarios as follows:

1. In the first scenario, the vessel would not be required to clear when going to the high seas to fish. The vessel would not be required to enter upon return from the high seas, since as a U.S.-documented fishing vessel its own catch is considered a product of the American fisheries and not unentered foreign merchandise. There are, of course, no vessel repair implications.

2. In the second scenario, the vessel would be required to clear for Guam via the high seas upon departure from San Diego. Likewise, entry would be required upon its return, and a negative vessel repair declaration should be filed with Customs

3. In the third scenario, the findings applicable to number 2, above, should be employed.

4. In the fourth scenario, the vessel would be required to clear upon departure from and enter upon return to San Diego. A vessel repair declaration as well as an entry would be required. All purchases would be required to be reported, and all would potentially be liable for duty under the statute.

5. In the fifth scenario, the vessel would be required to clear and enter when leaving and returning to San Diego. A vessel repair declaration would be required to cover the entire period of the voyage, but the follow-up vessel repair entry would be required to cover only those purchases occurring during the first six months of the voyage.

6. In the sixth scenario, the vessel would be required to clear and enter when leaving and returning to San Diego. A vessel repair declaration would be required to cover the entire voyage, and an entry would be required with potential liability for duty extending to all purchases since the voyage was of less than 24 months duration.

7. In the seventh scenario, the vessel would be required to clear and enter when leaving and returning to San Diego. A vessel repair declaration would be required to cover the entire voyage, and an entry would be required to be accompanied by vessel log copies establishing an absence of longer that two years with no repairs occurring within the first six months of the extended absence from the United States.

HOLDING:

Following a thorough review of the questions posed in light of the applicable law and precedents, we have determined that the laws regarding clearance, entry, and vessel repair liability have varying applicability in the matter under consideration. Our findings are reflected in the Law and Analysis portion of this ruling.

Sincerely,

Arthur P. Schifflin
Chief
Carrier Rulings Branch

Previous Ruling Next Ruling