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HQ 229922

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August 21, 2003

RR:CR:DR: 229922 MK

CATEGORY: LIQ-15

Bureau of Customs and Border Protection
Office of Field Operations
301 E. Ocean
Long Beach, CA 90802
Attn: Inspector Keith Perteet

RE: User Fees, Ambermar LTD, 19 U.S.C. 58c(a)(1); 19 U.S.C. 58c(a)(8)

Dear Inspector Perteet:

The above-referenced inquiry has been forwarded to this office. We have considered the inquiry of Ambermar LTD and your office.

Our decision follows.

FACTS:

An oil tanker, owned by Ambermar LTD (“Ambermar”), embarked from Mazanillo, Mexico with oil. It then docks in Long Beach, California where it pays $100 in user fees and discharges some of its oil. It then embarks from Long Beach and proceeds to San Francisco where it docks, pays another $100 user fee, and discharges the remainder of its cargo.

The tanker then takes on new bulk cargo in San Francisco and proceeds to Long Beach where it docks and takes on more cargo before embarking for Mexico.

ISSUE:

What user fee is owed at each docking?

LAW & ANALYSIS:

The relevant language of the user fees statute, 19 U.S.C. 58c states “the Secretary of the Treasury shall charge and collect for the arrival of a commercial vessel of 100 net tons or more, $397.” (19 U.S.C. 58c(a)(1)). However the statute does have a specific provision, at 58c(a)(8), which states that “for the arrival of a barge or other bulk carrier from Canada or Mexico, [the charge shall be] $100.”

The relevant regulation, 19 CFR 24.22(b)(2)(i), lays out the specific law in this instance:

A processing fee of $100 shall be tendered upon arrival of any barge or other bulk carrier which arrives from Canada or Mexico either in ballast or transporting only cargo laden in Canada or Mexico. The fee shall be collected for each arrival regardless of the number of arrivals taking place in the course of a single voyage.

To comply with this statute and the implementing regulations there are four essential elements: there must be an arrival, the vessel must be a barge or bulk carrier, it must arrive from Canada or Mexico, and it must only be transporting cargo laden in Canada or Mexico, or arrive in ballast from Canada or Mexico.

Arrival

Section 58c(c) defines “arrival” as the “arrival at a port of entry in the customs territory of the United States.” The same subsection references the General Note Two of the Harmonized Tariff Schedule of the United States. General Note Two provides “customs territory of the United States” as including only the States, the District of Columbia and Puerto Rico. A more specific and comprehensive definition can be found at 19 CFR 24.22(a)(2) where “arrival” means “arrival at a port of entry in the customs territory of the United States or at any place serviced by any such port of entry.”

Long Beach and San Francisco are both within the customs territory of the United States. Each time therefore, that the vessel docked in either place, the vessel is considered to have “arrived” for the purposes of this analysis.

Bulk Carrier

19 CFR 24.22 (b)(2)(i) also defines “barge or other bulk carrier” as “any vessel, other than a ferry, which is not self- propelled or which transports fungible goods that are not packaged in any form.”

In this instance, because the vessel is transporting petroleum, which is a fungible good for the purposes of 19 CFR 24.22(b)(2)(i), the vessel is a barge or bulk carrier.

Arrive from Canada or Mexico in ballast or transporting only cargo laden in Canada or Mexico

The journey originated in Mexico and therefore the first docking at Long Beach is a permissible arrival under 24.22(b)((2)(i) because at this point the ship can only be transporting Mexican cargo.

The second docking, in San Francisco, is also an allowable arrival under 24.22(b)(2)(i) because the vessel is again transporting only cargo laden in Mexico. Had more cargo been laden during the Long Beach docking, this would not have been an allowable arrival under 24.22(b)(2)(i) and the $397 user fee, under 19 U.S.C. 58c(a)(1), would apply.

According to the facts, all the Mexican origin cargo is unladen at the port of San Francisco, and other cargo is laden on the vessel. Therefore, at the second Long Beach docking the exemption provided by 19 U.S.C. 58c(b)(5)(C) and 19 CFR 24.22(b)(2)(i) cannot be applied. This third docking makes the vessel liable for the $397 fee provided by 19 U.S.C. 58c(a)(1).

HOLDING

A $100 user fee must be paid at the first docking in Long Beach and at the docking in San Francisco, and a $397 user fee must be paid at the second Long Beach docking.

Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.treas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles Harmon, Director

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