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HQ 110871

July 27, 1990

VES-13-18-CO:R:P:C 110871 KVS


Chief, Technical Branch
Commercial Operations Division
1 World Trade Center
Suite 705
Long Beach, CA 90831

RE: Survey; inspection; requirements of governmental entity or classification society; segregation of dutiable and non- dutiable items
Vessel: GREEN BAY V-17
Vessel Repair Entry No. 718-0000391-6

Dear Sir:

This is in response to your memorandum of February 21, 1990, which forwards for our consideration an Application for Relief filed in connection with the GREEN BAY V-17, vessel repair entry no. 718-0000391-6. Our findings are set forth below.


The GREEN BAY underwent foreign shipyard operations in Yokosuka, Japan, from October 6-9, 1989. The vessel arrived in the United States on October 22, 1989, at Portland, Oregon. The application for relief currently under consideration was filed January 22, 1990. Although the records before us do not give any indication that an extension was ever requested by the applicant, we are told that an extension in excess of 30 days was granted by the Vessel Repair Liquidation Unit in San Francisco due to "special circumstances which warranted the extra time."

Apparently, the transmittal of the entry from Portland was delayed and the San Francisco Vessel Repair Liquidation Unit did not receive it December 3, 1989. To avoid prejudice to the vessel owner, the applicant was given until January 22, 1990, (32 days after the time limitation provided in the regulations) to file an application. In the future, we would prefer that decisions involving such procedural irregularities be referred to Headquarters.

In regard to the relief requested by the applicant, one item has been submitted for our review.


Whether the foreign shipyard operations undertaken on the subject vessel are dutiable under 19 U.S.C. 1466.


Title 19, United States Code, section 1466(a), provides in pertinent part for payment of duty in the amount of 50 percent ad valorem on the cost of foreign repairs to vessels documented under the laws of the United States to engage in the foreign or coastwise trade, or vessels intended to be employed in such trade.

Customs has held, however, that surveys undertaken to meet the specific requirements of a governmental entity, classification society, insurance carrier, etc., are not dutiable, even if dutiable repairs were effected as a result of the survey. (See C.I.E. 429/61; C.S.D. 79-277).

In the application under consideration, the applicant alleges that the survey undertaken in Japan was performed pursuant to U.S. Coast Guard regulations. The documents submitted by the applicant however, contain neither a copy of a Coast Guard report indicating that a survey was completed according to USCG requirements, nor a copy of a Coast Guard invoice billing the owner for the cost of the survey. Thus, we are unable to determine whether the Coast Guard performed a survey and, if a survey was performed, whether the survey was conducted pursuant to the specific requirements of the Coast Guards.

The only documentation submitted that makes reference to the contested survey is Maritime Engineering (Kobe office) shipyard invoice #IB-1821, which states as part of its description, "supplied missing gears." No other information concerning the gears has been furnished by the applicant. Thus, it would appear that repairs were performed in conjuction with the alleged Coast Guard survey. The invoice does not segregate the cost of repairs made from the cost of the survey allegedly performed by the Coast Guard pursuant to its specific requirements.

The Customs Service has held that where items are not segregated or separately shown but are lumped together, duty will be assessed on the entire cost even though certain items may be non-dutiable (see C.I.E. 565/55. C.I.E. 1325/58, C.D. 1836).


1). Where an applicant submits no evidence which indicates that a survey was performed pursuant to the specific requirements of a governmental entity, classification society, insurance carrier, etc., and repairs were performed, the cost of that survey is dutiable.

2). In the absence of the segregation of the cost of dutiable repairs from the cost of an inspection, which may or may not be dutiable, duty will be assessed on the entire cost of the item.


B. James Fritz

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