VES-5-CO:R:IT:C 111707 LLB
Mr. Bruce Mitchell
President, S. De Freest and Co., Inc.
606 Fort Street
Honolulu, Hawaii 96813
RE: Vessel entry and clearance; Government-chartered vessels;
Military Sealift Command; Tonnage tax and light money
Dear Mr. Mitchell:
Reference is made to your letter of May 16, 1991, in which
you ask that we rule upon the extent that statutory vessel entry
and clearance requirements are applicable to privately owned
commercial vessels operated pursuant to charter to the United
States Government.
FACTS:
The Military Sealift Command (MSC), an element of the
Department of the Navy, chartered numerous privately-owned United
States-flag vessels for the carriage of military cargoes during
the pendency of Operation Desert Storm in the Middle East. The
question has arisen whether these vessels, operated by civilian
crews and carrying military cargoes, are subject to vessel entry
and clearance requirements. Included in the file before us is a
copy of a Customs Circular dated November 29, 1976 (Circular
VES-11-R:CD:C) which provides that 18 named vessels operated by
the MSC under private contract are exempt from the assessment of
tonnage taxes as well as from the presentation of a Certificate
of Financial Responsibility (Oil Pollution Certificate) prior to
clearing from a port in the United States. The cited circular
does provide, however, that such vessels are otherwise required
to report arrival, enter, and clear in the normal manner.
ISSUE:
Whether civilian United States-flag commercial vessels
operating under contract to the Department of the Navy and
carrying only military cargoes, are required to comply with all
normally applicable vessel and entry procedures.
LAW AND ANALYSIS:
Section 1433, title 19, United States Code, provides that
every vessel arriving in the United States from a foreign place
must report its arrival immediately. The Customs Service
considers an American vessel which comes to rest in or engages in
an activity in foreign waters to have been in a foreign place for
purposes of section 1433. The Customs Service considers that an
American vessel has not been in a foreign place for purposes of
section 1433 if it merely passes through foreign waters during
the course of a voyage. (Customs Ruling 109442, April 28, 1988).
In light of the above-cited interpretation, absent a
government-vessel exemption from the reporting requirement, the
subject vessels are considered to be required to report upon
arrival in the United States from voyages on which the vessel has
come to rest or engaged in any activities in foreign territorial
waters, other than merely traversing those waters.
Section 4.5, Customs Regulations (19 CFR 4.5), provides that
no report of arrival or vessel entry shall be required for
vessels owned or controlled by the United States or its
agencies:
... if such vessel (1) is manned wholly by
members of the uniformed services of the
United States, by personnel in the civil
service of the United States, or by both, and
(2) is transporting only property of the
United States or passengers travelling on
official business of the United States ...
In this case, the vessels in question are operated by civilian
contract crews.
When a vessel is required to enter (and when no exception
from entry is provided under 19 U.S.C. 1441), it is required that
all merchandise aboard be manifested in accord with section 431,
Tariff Act of 1930, as amended (19 U.S.C. 1431), and section 4.7,
Customs Regulations (19 CFR 4.7). The manifest is required to be
available for presentation to Customs upon arrival.
The exemption from the assessment of tonnage taxes and light
money in the cited Customs Circular document is based upon
section 4.21(b)(4), Customs Regulations (19 CFR 4.21(b)(4)),
which provides an exemption for vessels operated or managed by
the United States Government and not carrying merchandise for
trade purposes. This is a less stringent provision than the
statutory provision which exempts certain vessels from the need
to make formal entry.
HOLDING:
The result of all the foregoing is that civilian commercial
vessels operated by civilian crews pursuant to contractual
agreements with the United States Government must comply with all
normally applicable report of arrival, entry, and clearance
procedures. These requirements are not altered merely because of
such contract agreements or because of military cargoes. The
only Customs requirement which is not enforced in such cases is
the collection of tonnage tax and light money.
Pollution Certificates are a requirement of the United
States Coast Guard which Customs enforces on behalf of that
agency. For our purposes, we will consider that the exemption
stated in the cited Customs Circular is specific to the oil
tanker vessels which were under consideration at the time that
document was drafted and, absent notification to the contrary
from the Coast Guard, we will continue to require all other
vessels to maintain such certification.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch