United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1992 HQ Rulings > HQ 0110731 - HQ 0110894 > HQ 0110866

Previous Ruling Next Ruling

HQ 110866

July 31, 1990

VES-13-18-CO:R:P:C 110866 LLB


Deputy Assistant Regional Commissioner
Commercial Operations Division
ATTN: Vessel Repair Liquidation Unit
New Orleans, Louisiana 70130

RE: Vessel Repair; Protest; Late Filing of Invoice; Late Entry; Vessel SEISMIC EXPLORER; Entry No. C14-0006361-1

Dear Madam:

Reference is made to your memorandum of February 14, 1990, by which you forward for our consideration the protest filed by the Whitehall Corporation (protest number 1401-89-000167) in regard to the above-captioned vessel repair entry.


The vessel arrived in the port of Norfolk, Virginia, on September 21, 1987. A vessel repair entry was filed but was not properly signed or dated. The entry reflects that "NO BOND" is written in block 19 of the entry form, the space reserved for recordation of the name of the principal and surety. It is reported that the vessel operator indicated at the time that the vessel qualified for clearance without the necessity of posting a bond under the provisions of section 4.14(b)(2)(i), Customs Regulations (19 CFR 4.14(b)(2)(i)), the regulation concerning government owned or chartered vessels (apparently neither being the case).

No formal application for relief was ever submitted, the only colorable plea being a bald statement on the bottom of the vessel repair entry, "Repairs furnished by U.S.A. Personnel using U.S.A. Parts." The entry remained open until April 28, 1989, at which time it was liquidated without benefit of shipyard invoices. The invoices were submitted on June 20, 1989, two months after liquidation and nearly two years after arrival of the vessel. The liquidation is protested on the grounds that since seventeen months lapsed between entry and liquidation, Customs failed to satisfy the time limits prescribed in section 4.14(e), Customs Regulations (19 CFR 4.14(e), thus sending the message that the matter was considered closed.


Whether the protest of liquidation of vessel repair duties under consideration states a claim upon which relief may be granted.


Section 1466 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 foreign or coastwise trade, or vessels intended to engage in such trade.

The Customs Regulations provide that entry of all foreign repair costs and equipment expenditures shall be made within five working days after arrival in the United States. Some confusion exists over the actual entry date in this case, with block 16c. of the entry document being dated September 21, 1981 [sic], yet with no date or signature appearing in the required block 25 of the form. Block 18, reserved for Customs use only, shows a date of November 19, 1987, as the entry date, some two months after the vessel arrival date. The protest form (CF 19), which is signed by counsel for the protestant, shows the entry date to be November 19, 1987. We will, therefore, consider this to be the correct entry date and note that the entry was delinquent by some fifty-five days.

As previously noted, the regulations provide that government owned or leased vessels need not post a bond to secure duties which may be owing prior to departing the first port of arrival. Apparently the representation of government ownership or lease was made by the vessel operator in this case, although no substantiation of such relationship with the government can be found in the record of this case.

The Customs Regulations provide at section 4.14(d)(1) (19 CFR 4.14(d)(1)), that although applications for relief need not be submitted in any particular format, it is necessary that such allege that an item or a repair expense is not subject to duty under either paragraph (a) or (c) of section 4.14. Further, the application shall certify that all foreign expenditures made within one year of the application date have been declared. The provision goes on to state that the application shall be filed at either the same port at which the entry was filed, or with the appropriate vessel repair liquidation unit. This provision shows clearly that the application is a separate submission from the entry. Further, juxtaposition of the facts with the regulatory requirements in this case reveals a multitude of deficiencies, even if the bald statement on the entry form were to be considered an application for relief.

The protestant, as previously stated, relies in whole upon section 4.14(e), Customs Regulations (19 CFR 4.14(e)) to support this protest. That section provides that if cost evidence is available and notice is received that no application for relief will be filed, the entry shall be promptly liquidated. Of course, neither of these conditions were present in this case, with no invoices having been submitted prior to liquidation and no indication regarding application having been made. The regulations provide further that in all other cases in which cost evidence is available, the entry may be liquidated 60 days after arrival. This language is permissive and not mandatory. There is no obligation on the part of Customs to liquidate a vessel repair entry within 60 days of arrival, especially in cases where invoices are withheld by the vessel operator. The fact that an entry remains open and unliquidated should certainly not be taken as an indication that the matter of the entry is concluded with nothing further required of an operator by Customs. In fact, logically speaking, quite the opposite interpretation may be indicated.

All of this notwithstanding, the question of the validity of the protest remains. The right to protest the liquidation of an entry is provided in section 514, Tariff Act of 1930, as amended (19 U.S.C. 1514). Even though no pre-liquidation prayer for relief might be submitted, there is a statutory right to seek refund of duties assessed under subsection (a) of the vessel repair statute (19 U.S.C. 1466(a)), and a section 1514 protest seeking such refund must be considered on its merits. The failure to submit a timely and/or defective Application for Relief under the Customs Regulations is tantamount to the failure to seek pre-liquidation relief from duties. Therefore, this protest will be considered.

Section 1514(c)(1) (19 U.S.C. 1514(c)(1)), provides, in pertinent part:

A protest of a decision under subsection (a) of this section shall be filed in writing with the appropriate customs officer designated in regulations prescribed by the Secretary, setting forth distinctly and specifically each decision described in subsection (a) of this section as to which protest is made; each category of merchandise affected by each such decision as to which protest is made; and the nature of each objection and reasons therefor.

In this case there is no distinct and specific objection raised to the decision to liquidate the items as entered. Neither is any category of merchandise affected by each liquidation decision made a subject of this protest, nor is the nature of each objection, with reasons stated, mentioned. As such, we find the protest to be without merit.

The presence of prepenalty considerations is mentioned in the memorandum transmitting this matter to us. We believe, considering all of the previously mentioned failures, misstatements and deficiencies in the entry process, that such action is well justified.


Upon thorough consideration of the facts analyzed in connection with the applicable law and regulations, we have determined that he protest is not meritorious and should be denied. Further, we find ample reason to refer this matter for issuance of a prepenalty notice.


B. James Fritz

Previous Ruling Next Ruling