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HQ 956107

May 10, 1994

CLA-2 CO:R:C:M 956107 RFA


TARIFF NO.: 8907.90.00, 7308.90.90

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).


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.


Are the imported structure parts of a shuttle tanker classifiable as a "vessel" or as "other floating structures" under the HTSUS?


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. . . ."


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.


John Durant, Director
Commercial Rulings Division

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