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 > 2002 HQ Rulings > HQ 115630 - HQ 228011 > HQ 115690

Previous Ruling Next Ruling
HQ 115690

August 19, 2002

VES-13-18-RR:IT:EC 115690 GEV


Supervisory Liquidator
Residual Liquidation and Protest Branch
U.S. Customs Service
1210 Corbin Street
3rd Floor
Elizabeth, New Jersey 07201

RE: Vessel Repair Entry No. 514-3006162-5; COURIER; V-309; Modifications; Asbestos Removal; 19 U.S.C. § 1466

Dear Madame:

This is in response to your memorandum dated May 20, 2002, which forwarded a petition for review of your office’s decision on an application for relief from vessel repair duties assessed pursuant to 19 U.S.C. § 1466. Our ruling on this matter is set forth below.


The COURIER is a U.S.-flag vessel owned by Marine Transport Corporation (“MTC”). Subsequent to the completion of foreign shipyard work, the vessel arrived in Perth Amboy, New Jersey, on March 12, 2001. A vessel repair entry was timely filed.

An application for relief with supporting documentation was timely filed. By letter dated February 13, 2002, your office granted in part and denied in part the aforementioned application. Pursuant to an authorized extension of time, a petition for review of this decision was timely filed seeking relief for 18 items alleged to be nondutiable modifications. .


Whether the work in question for which the petitioner seeks relief constitutes modifications to the subject vessel and is therefore nondutiable under 19 U.S.C. § 1466.


Title 19, United States Code, § 1466(a) (19 U.S.C. § 1466(a)), provides in pertinent part for the payment of an ad valorem duty of 50 percent of the cost of “equipments, or any part thereof, including boats, purchased for, or the repair parts or materials to be used, or the expenses of repairs made in a foreign country upon a vessel documented under the laws of the United States”

In its application of the vessel repair statute, Customs has held that modifications, alterations, or additions to the hull and fittings of a vessel are not subject to vessel repair duties. The identification of work constituting modifications vis-à-vis work constituting repairs has evolved from judicial and administrative precedent. (See Otte v. United States, 7 Ct. Cust. Appls. 166, T.D. 36489 (1916); United States v. Admiral Oriental Line et al., 18 C.C.P.A. 137, T.D. 44359 (1930); and Customs Bulletin and Decisions, Vol. 31, Number 40, published October 1, 1997.) The factors discussed within the aforementioned authority are not by themselves necessarily determinative, nor are they the only factors which may be relevant in a given case. However, in a given case, these factors may be illustrative, illuminating, or relevant with respect to the issue of whether certain work may be a modification of a vessel which is nondutiable under 19 U.S.C. § 1466.

With respect to the 18 items submitted for our consideration, upon reviewing the record in its entirety, we are of the opinion that with the exception of four of these items, all constitute nondutiable modifications. The four items which do not constitute modifications are as follows: 129 (Waste Heat Boiler Insulation Removal); 130 (PME Silencer Insulation Removal); 131 (Waste Heat Boiler Insulation Installation); and 132 (PME Silencer Insulation Installation). The work covered by these four items as described in the shipyard invoice and supporting documentation constitutes the removal and replacement of asbestos insulation. Customs has long-held such work to be a dutiable repair/maintenance operation rather than a nondutiable modification. (see Customs ruling letters 108366, dated March 4, 1987, and 113122, dated March 20, 1996)


With the exception of Items 129, 130, 131, and 132, the work in question for which the petitioner seeks relief constitutes modifications to the subject vessel and is therefore nondutiable under 19 U.S.C. § 1466 as discussed in the Law and Analysis portion of this ruling.


Acting Chief
Entry Procedures and Carriers Branch

Previous Ruling Next Ruling