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HQ 114992

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March 28, 2000

INS-2-RR:IT:EC 114992 GEV

CATEGORY: CARRIER

Anne-Gwinn Duval
Staff Attorney
Bollinger Shipyards Lockport, L.L.C.
8365 Hwy. 308 South
Post Office Box 250
Lockport, Louisiana 70374-0250

RE: Vessel Entry and Clearance; Fees; 19 U.S.C. § 1434; 46 U.S.C. App. § 91

Dear Ms. Duval:

This is in response to your letter dated March 8, 2000, requesting a ruling pertaining to the assessment by the U.S. Customs Service of fees pertaining to vessel entry and clearance. Your request is apparently in furtherance of our response to a prior inquiry from you (Customs information letter 114917, dated January 13, 2000), albeit a separate transaction. Our ruling on this matter is set forth below.

FACTS:

Bollinger Shipyards Lockport, L.L.C. is building a derrick barge for the U.S. Army (BD No. 4) which is expected to be delivered in late June of 2000. Prior to delivery of the barge, a crane will be erected onto the barge and an anchor test will be performed in the Gulf of Mexico. For erection of the crane, the barge will have to be towed from Lockport, Louisiana (where it is built) to Slidell, Louisiana where the crane company is located.

To maximize time and efficiency, Bollinger will have the anchor test performed while the barge is en route to Slidell, since the test requires a depth of 900 feet and will need to be conducted in the Gulf of

Mexico. The anchor test is expected to take approximately one full day to perform, and will require the presence of four (4) Bollinger personnel, the Supervisor of Shipbuilding from the Government, an ABS inspector, as well as a vendor representative (hereinafter referred to as the “testing crew”).

The most convenient port from which to send the testing crew is the port of Venice, Louisiana. Bollinger plans to hire a crewboat from a facility in Venice to transport the testing crew to the barge. The crewboat will meet the derrick barge, which will be kept in place with a towline, at about 25 nautical miles from the port of Venice. The testing crew will merely go aboard the derrick barge for the performance of the anchor test, and upon conclusion of the test, will reboard the crewboat to return to the port of Venice. The crewboat will be a U.S.-flagged vessel and will not deliver or receive merchandise or passengers while outside the territorial sea, nor will it visit a hovering vessel.

ISSUE:

Whether a U.S-flagged crewboat is liable for Customs vessel entry and clearance fees when it transports a testing crew from a U.S. port to a point on the high seas beyond U.S. territorial waters to conduct an anchor test on a derrick barge, and subsequently returns with the testing crew to the same U.S. port at the conclusion of the test.

LAW AND ANALYSIS:

The laws governing the requirements of the U.S. Customs Service with respect to the entry and clearance of vessels are found at 19 U.S.C. § 1434 and 46 U.S.C. App. § 91, respectively. The applicable Customs Regulations promulgated pursuant thereto are set forth in 19 CFR §§ 4.3 and 4.60, respectively. The navigation fees associated with such services are assessed pursuant to 19 CFR § 4.98. (See also Treasury Decision (T.D.) 85-70)

With respect to U.S.-flagged vessels, § 4.3(a)(4) provides, in pertinent part, that formal entry is required when the vessel “has delivered or received merchandise or passengers while outside the territorial sea.” Similar language is found in § 4.60(a)(4) which provides, in pertinent part, that such vessels must obtain clearance from Customs if “departing for points outside the territorial sea toreceive merchandise or passengers while outside the territorial sea,”

In regard to the U.S.-flagged crewboat under consideration, the transportation of the testing crew to and from the barge located outside the territorial sea does not constitute delivering or receiving passengers as contemplated by the above-cited authority. Consequently, since the vessel is not required to enter or clear Customs under this scenario, it is not required to pay the navigation fees associated with such services.

HOLDING:

A U.S-flagged crewboat is not liable for Customs vessel entry and clearance fees when it transports a testing crew from a U.S. port to a point on the high seas beyond U.S. territorial waters to conduct an anchor test on a derrick barge, and subsequently returns with the testing crew to the same U.S. port at the conclusion of the test.

Sincerely,

Acting Chief

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