VES-13-18 CO:R:IT:C 111619 JBW
Deputy Assistant Regional Commissioner
Commercial Operations
c/o Regional Commissioner
New Orleans, LA 70130-2341
RE: Vessel Repair; Spare Parts; 19 U.S.C. 1466(h); M/V LAWRENCE
GIANELLA; Entry No. C53-0012163-5.
Dear Sir:
This letter is in response to your memorandum dated March
28, 1991, which forwards for our review the application for
relief filed in conjunction with the above-referenced vessel
repair entry.
FACTS:
The record reflects that the subject vessel, the M/V
LAWRENCE GIANELLA, arrived at the port of Houston, Texas, on
November 30, 1990. Vessel repair entry, number C53-0012163-5,
was filed on the same day as entry and was marked incomplete. A
completed entry and an application for relief was filed on
January 24, 1991. The entry indicates that a variety of repairs
were performed in different foreign shipyards. The applicant
seeks relief for spare parts used in these repairs that were
either manufactured in the United States or were imported into
the United States, duty-paid.
ISSUE:
Whether parts used in the repairs of the vessel are
dutiable, if such parts are documented to be of United States
origin or to have been imported into the United States, duty-
paid.
LAW AND ANALYSIS:
Title 19, United States Code, section 1466, provides for
payment of duty in the amount 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 engage in such trade.
The vessel repair statute exempts from duty spare repair
parts or materials that have been manufactured in the United
States or entered the United States duty-paid and are used aboard
a cargo vessel engaged in foreign or coasting trade. 19 U.S.C.
1466(h). For purposes of this section, where a part is
purchased from a party unrelated to the vessel owner, a United
States bill of sale constitutes sufficient evidence to
demonstrate that the part was either manufactured in the United
States or entered in the United States, duty-paid. In cases in
which the vessel operator or a related party has acted as the
importer of foreign materials, or where materials were imported
at the request of the vessel operator for later use by the
operator, the vessel repair entry will identify the port of entry
and the consumption entry number for each part installed on the
ship which has not previously been entered on a Customs Form 226.
We have reviewed the invoices included in the application
and have determined that the invoices for which the applicant
seeks relief meet the above-described evidentiary requirements
for duty exemption. The application for relief should be
approved in full.
HOLDING:
The parts used in the repairs of the vessel are not subject
to duty if such parts are documented to be of United States
origin or to have been imported into the United States, duty-
paid. We have reviewed the invoices included in the application
and have determined that the invoices for which the applicant
seeks relief meet the evidentiary requirements for duty
exemption.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch