CLA-2 CO:R:C:M 956107 RFA
Mr. E. Alex Blanton
Dyer, Ellis, Joseph & Mills
Watergate-Suite 1000
600 New Hampshire, Avenue, N.W.
Washington, D.C. 20037
RE: Parts of Shuttle Tankers; Forebody; Midbody; Stern with
Vessel House; Stern without Vessel House; Other Floating
Structures; Structure of Iron or Steel; Unassembled Goods;
GRI 2(a)
Dear Mr. Blanton:
This is in response to your letter, dated March 10, 1994, on
behalf of Avondale Industries, Inc. ("Avondale"), requesting the
tariff classification of shuttle tanker parts under the
Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The merchandise will consist of one of the following
structures to be incorporated into a shuttle tanker which will be
built by Avondale: a forebody; a midbody; a stern with a vessel
house; a stern without a vessel house; and a vessel house as a
separate article. The "forebody" contains the cargo compartments
plus the bow and does not include the stern. The "stern"
contains the engine, vessel supply and bunker compartments, cargo
pumps, and, ordinarily, also includes the vessel house. The
"vessel house" is the structure that includes the wheel house,
crew's quarters, ship control systems, cargo control system (such
as the pump controls), exhaust stack, radar towers and lifesaving
equipment (such as lifeboats). A "midbody" (or midsection) is
just the cargo compartments without a bow or a stern. Neither a
forebody nor a midbody is, by itself, able to handle cargo
because the cargo pumps are located in the stern.
According to the information provided, if the foreign
shipyard builds either a forebody or a midbody, the structure
will be towed afloat to the United States. While the stern (with
or without a vessel house) will float, it will probably not be
possible to make it safe for towage on the high seas. Therefore,
if the foreign shipyard builds the stern, it will probably be
transported to the United States on another vessel. The vessel
house by itself will not float and would need to be transported
by a similar method. None of the forebody, midbody, stern (with
or without a vessel house), or the vessel house itself will have
the capability of independent navigation, and each will have a
negligible ability, if any, to generate power for its own use.
ISSUE:
Are the imported structure parts of a shuttle tanker
classifiable as a "vessel" or as "other floating structures"
under the HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in
accordance with the General Rules of Interpretation (GRI's),
taken in order. GRI 1 provides that classification shall be
determined according to the terms of the headings and any
relative section or chapter notes.
Finished tankers are provided for, eo nomine, under
subheading 8901.20.00, HTSUS, which provides for: "[c]ruise
ships, excursion boats, ferry boats, cargo ships, barges and
similar vessels for the transport of persons or goods: [t]ankers
. . . ." However, according to the information provided, the
subject merchandise will be imported into the United States as
individual components which will not have the essential character
of a tanker. The individual components will be incorporated with
other components in order to build shuttle tankers in the United
States.
The structures cannot be considered a "vessel", entitled to
duty-free treatment because they are not a means of
transportation, but articles of commerce. See United States v.
Bethlehem Steel Co., 53 CCPA 142, 152, C.A.D. 891 (1966), cert.
denied, 386 U.S. 912, reh'g denied, 386 U.S. 987 (1967); Todd
Shipyards Corp. v. United States, 9 CIT 464, 466 (1985); Vancor
Steamship Corp. v. United States, 76 Cust. Ct. 4, 8, C.D. 4627
(1976). Because the forebodies and midbodies were not vessels,
the courts have consistently held that they were classifiable
under item 696.60 of the Tariff Schedules of the United States
(TSUS), which provided for buoys, beacons, landing stages,
cofferdams, rafts, and other floating structures. Id.
Congress has indicated that earlier rulings must not be
disregarded in applying the Harmonized Code. The conference
report to the Omnibus Trade Bill states that on a case-by-case
basis prior decisions should be considered instructive in
interpreting the HTSUS, particularly where the nomenclature
previously interpreted in those decisions remains unchanged and
no dissimilar interpretation is required by the text of the
HTSUS. H.Rep No. 100-576, 100th Cong., 2D Sess. 548 (1988) at
550.
The description for forebodies and midbodies under item
696.60, TSUS, does not materially differ from subheading
8907.90.00, HTSUS, which provides for other floating structures.
Therefore, we find that forebodies and midbodies are classifiable
under subheading 8907.90.00, HTSUS, which provides for: "[o]ther
floating structures (for example, rafts, tanks, cofferdams,
landing-stages, buoys and beacons): [o]ther. . . ."
After studying the submitted schematics, we find that the
stern with or without the vessel house, is similar to the
forebody and midbody in that it is a floating structure.
Therefore, the stern with or without the vessel house, is
classifiable under subheading 8907.90.00, HTSUS.
You also claim that if a stern and a vessel house are
entered unassembled, it would remain classified under the same
provision based upon GRI 2(a). GRI 2(a) provides that "any
reference in a heading to an article shall be taken to include a
reference to that article incomplete or unfinished, provided
that, as presented, the incomplete or unfinished article has the
essential character of the complete or finished article." We
find that the stern entered with the vessel house unattached
meets the criteria of GRI 2(a) and is therefore, classifiable
under subheading 8907.90.00, HTSUS.
In your submission, you also state that a vessel house will
be entered separately. Even though the vessel house contains
many subassemblies, materials and substances, you indicate that
it is principally an article in which the chief value is steel.
We find that the vessel house, when imported separately, is
classifiable under subheading 7308.90.90, HTSUS, which provides
for: "[s]tructures . . . and parts of structures . . . of iron or
steel . . . : [o]ther: [o]ther. . . ."
HOLDING:
The forebodies, midbodies, and sterns with or without vessel
houses, entered separately, are classifiable under subheading
8907.90.00, HTSUS, which provides for other floating structures.
Based upon GRI 2(a), sterns with vessel houses unattached, are
classifiable under subheading 8907.90.00, HTSUS. The general,
column one rate of duty is 3.8 percent ad valorem.
The vessel houses, entered separately, are classifiable
under subheading 7308.90.90, HTSUS, which provides for other
structures of iron or steel. The general, column one rate of
duty is 5.7 percent ad valorem.
Sincerely,
John Durant, Director
Commercial Rulings Division