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HQ 112165

May 21, 1992

VES-13-18-CO:R:IT:C 112165 MLR

CATEGORY: CARRIER

Capt. Harry Rogers
Interocean Management Corporation
#3 Parkway, Suite 1300
Philadelphia, PA 19102

RE: Declaration and Entry of Foreign Vessel Repairs

Dear Sir:

Reference is made to your facsimile of March 31, 1992, regarding the declaration and entry of foreign vessel repairs.

FACTS:

The U.S. flag tanker S.S. UST PACIFIC (Official # 613131) is expected to arrive at the S.W. Pass lighterage position on April 6, 1992. The vessel has not been in U.S. waters for 12 years. While abroad the vessel underwent repairs.

ISSUE:

Whether the foreign vessel repairs performed upon the S.S. UST PACIFIC must be entered and declared although the vessel remains outside the three mile limit while discharging its cargo.

LAW AND ANALYSIS:

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 so employed.

Customs has held that the LOOP, for purposes of the vessel repair statute, is not a United States port. Headquarters Ruling 112012. The LOOP is located 20 mile offshore and is considered a "deepwater port" as defined in title 33 United States Code, section 1502(10) (Deepwater Port Act of 1974; Pub. L. 93-627). The laws of the U.S., generally, are made applicable to deepwater ports by section 1518(a)(1) of the Act, but the "Customs laws" are specifically made inapplicable under section 1518(d). Dispositive of the point is the language of section 1644(b) of title 19, United States Code {19 U.S.C. 1644(b)}, wherein it is stated:

For purposes of section 1518(d) of title 33, the term "customs laws administered by the Secretary of the Treasury" shall mean [Chapter 4 of title 19, United States Code] and any other provision of law classified to [title 19, United States Code].

Therefore, calls at the LOOP facility or at points on the high seas overlying the outer Continental Shelf (within the jurisdictional coverage of the laws administered by Customs for limited purposes and under limited circumstances) will not trigger the necessity to declare and enter foreign repairs made to United States-flag vessels.

Also, for your information, the vessel repair statute provides in subsection (e) {19 U.S.C. 1466(e)}, that when a vessel covered by the vessel repair statute:

...arrives in a port of the United States two years or more after its last departure from a port in the United States, the duties imposed by [section 1466] shall apply only with respect to... [purchases and repairs] made during the first six months after the last departure of such vessel from a port of the United States.

Repairs made during the first six months of an absence from the United States lasting at least two years are subject to duty. Those made more than six months after last leaving the United States on continuous absences of at least two years are not subject to duty. Keep in mind, however, that all are required to be declared upon first arrival in this country.

HOLDING:

The foreign vessel repairs performed upon the S.S. UST PACIFIC need not be declared not entered because the vessel will remain outside the three mile limit while discharging its cargo.

Sincerely,

B. James Fritz
Chief

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