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HQ 116264





July 30, 2004

VES-3-18-RR:IT:EC 116264 GOB

CATEGORY: CARRIER

Chief, Vessel Repair Unit
U.S. Customs and Border Protection
423 Canal Street
New Orleans, LA 70130

RE: 19 U.S.C. 1466; Vessel Repair Entry MX9-0040011-1; Protest 2002-04-100625; SEA-LAND DEFENDER, Voyage 0402

Dear Sir:

This is in response to your memorandum of June 18, 2004, forwarding for our review the protest filed by U.S. Ship Management, Inc. (“protestant”) with respect to Vessel Repair Entry MX9-0040011-1. Our ruling follows.

FACTS:

The SEA-LAND DEFENDER (the “vessel”) is a U.S.-flag vessel which incurred foreign shipyard costs in Asia. The vessel arrived in the port of Los Angeles on January 21, 2004. A vessel repair entry was timely filed.

By letter of April 30, 2004, your office granted in part and denied in part the application for relief with respect to the subject entry. The items for which your office denied relief are the subject of this protest – lashing bars, turnbuckles, and twistlocks for hatch cover (item five); and 40 foot lashing gear flat rack (item six).

ISSUE:

Whether the costs for which the protestant seeks relief are dutiable under 19 U.S.C. § 1466.

LAW AND ANALYSIS:

Title 19, United States Code, §1466 (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 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.

Title 19, United States Code, § 1322 (19 U.S.C. 1322(a)) provides in pertinent part, that “[v]ehicles and other instruments of international traffic, , shall be excepted from the application of the customs laws to such extent and subject to such terms and conditions as may be prescribed in regulations or instructions ”

The U.S. Customs and Border Protection (CBP) Regulations issued under the authority of 19 U.S.C. 1322 are contained in 19 CFR 10.41a. 19 CFR 10.41a(a)(1) designates lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics as instruments for international traffic.

Section 10.41a(a)(1) also authorizes the Commissioner of CBP to designate as instruments of international traffic such additional articles or classes of articles as he shall find should be so designated. Instruments so designated may be released without entry or the payment of duty, subject to the provisions of 19 CFR 10.41a.

To qualify as an instrument of international traffic within the meaning of 19 U.S.C. 1322(a) and 19 CFR 10.41a, an article must be used as a container or holder. Further, the article must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. See e.g. Headquarters decisions 108084, 108658, 109665, and 109702.

In HQ 115161 dated November 2, 2000, Customs determined that certain lashing gear, used as components of a securing system for the transportation of containers aboard vessels, were instruments of international traffic within the meaning of 19 U.S.C. 1322(a) and 19 CFR 10.41a so as to be exempt from entry and the payment of duty pursuant to 19 U.S.C. 1466. In HQ 115161, Customs stated that “ ‘Lashing Gear’ is a group description of all loose and fixed hardware used onboard a container to tie down the freight containers carried by [a] ship.” Buffers USA, was stated to be the importer of record in HQ 115161. Buffers USA, Inc. is the party who supplied the items which are the subject of this protest.

In HQ 115161 Customs cited T.D. 82-147 where it designated certain twist-lock stackers as instruments of international traffic. Customs stated that “[t]wist-lock stackers are used by steamship operators to secure containers to the deck of a vessel and to other stacked containers. They are used to align steamship containers vertically by either attaching them to the deck of the vessel or container to container.” (See also HQ 112627 dated May 18, 1993, which held that lashing rods which are components of a securing system for transporting containers aboard vessels are instruments of international traffic.)

After a consideration of the items which are the subject of this protest, we find that, pursuant to HQ 115161, HQ 112627 and T.D. 82-147, they qualify as instruments of international traffic pursuant to 19 U.S.C. 1322 and 19 CFR 10.41a.

HOLDING:

The subject items are instruments of international traffic pursuant to 19 U.S.C. 1322 and 19 CFR 10.41a. They are therefore exempt from entry and the payment of duty.

You are instructed to GRANT the protest.

In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Glen E. Vereb
Chief
Entry Procedures and Carriers Branch

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