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HQ 113985

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August 1, 1997

ENT-1-01 RR:IT:EC 113985 CC

CATEGORY: ENTRY

Robert E. Corrado
V.P. Import Operations
Compass Forwarding Co., Inc.
159-15 Rockaway Blvd.
Jamaica, NY 11434

RE: Importation and installation of fiber optic cable

Dear Mr. Corrado:

This is in response to your letter Of June 11, 1997, concerning the importation and installation of 3,000 miles of fiber optic cable which you call the Gemini Project. You state that the cable will be used for voice and data transmission from New Jersey to England.

FACTS:

According to your letter, the cable will be imported to New Jersey on a charter vessel from Australia. At the port in New Jersey, the cable will be removed by a special crane and put on a laying vessel, which will be next to it. The laying vessel will then take the cable approximately 35 miles down the coast to Manasquin, New Jersey, where the cable will be installed with approximately 12 miles of cable on land and the balance in the ocean.

You ask about entry procedures for the cable, and, particularly, we have been told by the port, any duty consequences. We note that there was issued recently a ruling concerning the coastwise trade law issues concerning this project, Headquarters Ruling (HQ) 113906, dated April 24, 1997.

ISSUE:

Whether the cable is dutiable.

LAW AND ANALYSIS:

All goods imported into the Customs territory of the United States from outside thereof are subject to duty or exempt thereof as provided for by the Harmonized Tariff Schedule of the United States (HTSUS). General Note 1, HTSUS. The term importation is generally defined as the bringing of goods within the jurisdictional limits of the United States with the intention to unlade them." See C.S.D. 89-39, Henry Hollander Co. v. United States, 22 C.C.P.A. 645, 648 (1935), and United States v. Field & Co., 14 Ct. Cust. App. 406 (1927). Merchandise arriving on a vessel is deemed imported on "the date on which the vessel arrives within the limits of a port in the United States with intent then and there to unlade such merchandise." See United States v. Commodities Export Co., 14 CIT 166, 733 F. Supp. 109 (1990) and 19 CFR ? 101.1.

According to the information provided, the cable is arriving on a vessel that departed from Australia. The vessel will enter a port in New Jersey, and the cable will be unladen onto another vessel. Since the cable arrived on a vessel from a foreign country, the vessel came within a U.S. port limits, and the cable was unladen onto another vessel, clearly an importation has occurred. Consequently, the cable is subject to duty. We have ruled that cable arriving at a U.S. port on a vessel from a foreign country and laden on another vessel for cable laying operations is dutiable. See HQ 111718 of August 12, 1991.

We are unaware of any duty exemption that would apply to the subject cable. The cable, however, could be placed in either a Customs bonded warehouse or a foreign trade zone without payment of duty if the cable is exported. See HQ 224935 of September 17, 1993, and HQ 220924 of June 8, 1989. The portion of the cable from the three mile territorial limit outward would be considered exported. Although 19 U.S.C. ? 1322(a) and 19 CFR ? 10.41(f) allow for a duty exemption for certain undersea international cable as instruments of international traffic, we have found that the exemption does not apply for cable that is first imported on a vessel to the United States. See HQ 223692, dated March 11, 1992.

Also, we note that drawback may be available for the cable. We have found that underwater communications cable is "exported" for drawback purposes when it is laid between the international waters of the United States and a foreign country. See HQ 224935 of September 17, 1993, and C.S.D. 81-167. Therefore, if the cable is laid to the UK, the cable would be considered exported for drawback purposes and drawback would be available.

Finally, you state that at the time of importation, you have over one million dollars worth of parts, equipment, tools of trade, computer, and computer software, which will be returned to the U.K. We would need more information concerning these items before we would be able to comment further.

If you have further questions concerning entry procedures, please address them to the port where you are making entry.

HOLDING:

The cable is imported into the United States and is subject to duty under the HTSUS at the applicable rate.

Sincerely,

Jerry Laderberg
Acting Chief

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