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HQ 114888

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December 15, 1999
VES-13-18-RR:IT:EC 114888 GOB

CATEGORY: CARRIER

Port Director of Customs
Attn.: Vessel Repair Liquidation Unit, Room 107 P.O. Box 2450
San Francisco, CA 94126

RE: 19 U.S.C. 1466; APL PHILIPPINES, V-29; Vessel Repair Entry No. 110- 7995907-5; Petition

Dear Madam:

This ruling is in response to your memorandum of October 28, 1999, which forwarded the petition submitted by American Ship Management, LLC (“petitioner”) with respect to the above-referenced vessel repair entry.

FACTS:

The APL PHILIPPINES (the “vessel”), a U.S.-flag vessel of which the petitioner is operating agent, arrived at the port of Seattle on April 16, 1999. The subject vessel repair entry was subsequently filed. The vessel underwent certain foreign shipyard work in China and Singapore.

By letter of August 26, 1999, your office handled the application for relief with respect to the subject entry.

ISSUE:

Whether the subject items are dutiable pursuant to 19 U.S.C. 1466(a)?

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, and equipment purchased in a foreign country for, 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.

Item 101 - Drydocking and General Services. This item represents drydock costs and general services costs which are to be prorated between dutiable and nondutiable costs in accord with our oft-stated position.

Item 301 - Sea Valve. The petitioner states that this is a nondutiable inspection item. The invoice reflects an inspection and includes the following language: “ABS & USCG Inspection. No Repairs ... Any repairs required as a result of this inspection will be accomplished on a separate item.” The invoice provides as follows: “The following list of sea valves opened up, cleaned, lapped, ground in seat and lid and overhauled. Inspection performed by ABS, USCG and owner representatives.” (Emphasis supplied.)

After a consideration of the documentation, we find that this item is dutiable based upon the language of the invoice which indicates maintenance and an overhaul. If, in a protest, the petitioner can provide a signed statement from a representative of the shipyard describing the work on this item, and if that work does not include maintenance and an overhaul, relief will be granted at that stage.

Item 301.1 - Overboard Valve. The petitioner claims that this item qualifies for treatment under 19 U.S.C. 1466(h)(3). However, the invoice includes the pressure testing of the valve, and the cost of that work is not broken-out or segregated on the invoice. Accordingly, we find that this item is dutiable.

Item 316 - Life Boat Falls Renewal and Load Test.

The petitioner claims that this item is a mandatory SOLAS requirement and that “[t]he replaced falls were not in need of repair or renewal.”

While the invoice reflects an “ABS and USCG and SULAS [sic] Inspection,” it also reflects the renewal of the fall wires, which indicates a dutiable repair. The cost of this item is not itemized between the renewal/repair work and other work. Accordingly, we find this item to be dutiable.

HOLDING:

As detailed above, the petition is denied.

Sincerely,

Jerry Laderberg


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