Application for Relief from Vessel Repair Duties for the Vessel CHERAMIE BOTRUC II; Entry Number C27-0075257-2, Port Hueneme, California; Arrived in the United States on July 22, 1989

HQ 110640 February 15, 1990 VES-13-18-CO:R:P:C 110640 CATEGORY: Carriers Chief, Technical Branch Commercial Operations Pacific Region One World Trade Center Long Beach, California 90831 RE: Application for Relief from Vessel Repair Duties for the Vessel CHERAMIE BOTRUC II; Entry Number C27-0075257-2, Port Hueneme, California; Arrived in the United States on July 22, 1989 Dear Sir: Reference is made to your memorandum of November 15, 1989, which forwards for our consideration the application for relief from vessel repair duties assessed under section 466, Tariff Act of 1930, as amended (19 U.S.C. 1466), filed by Mr. James Arness of Kenai, Alaska. Duties were assessed upon the cost of certain engine repairs made to the subject vessel in Panama. FACTS: In June, 1989, while in Panama, the vessel experienced oil cooler and port main engine problems. The deficiencies were attended to on three separate occasions over a seven day period. Finally, when it appeared that the mechanics in Panama would be unable to properly repair the vessel it was decided to have the vessel towed to California from Panama for repairs. Repairs were effected satisfactorily in California. ISSUE: Whether the repairs attempted in Panama are considered dutiable under section 1466. LAW AND ANALYSIS: Section 1466 provides, in pertinent part, for the 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. By issuance of C.I.E. 1128/60 on August 5, 1960 (reissued as Treasury Decision 55193 (24)) it was established that ineffective repairs which prove to be of no value to vessels are not dutiable under the vessel repair statute. This is to be distinguished from repairs which are made as a temporary expedient, until permanent repairs can be obtained. In this case there can be no question as to the value- lessness of the repairs to the vessel operator. Following some $8,300 in foreign expenditures for engine work, it was still necessary to tow the vessel from Panama to California for repairs to the engine. Towing costs of $40,000 were incurred for the services of a Louisiana firm to tow the vessel from Panama to California. This is a clear case of ineffective repairs which are not subject to vessel repair duties. HOLDING: The attempted repairs in Panama to the vessel CHERAMIE BOTRUC II were totally ineffective, and their cost should not be considered subject to duty under 19 U.S.C. 1466. Sincerely, B. James Fritz Chief Carrier Rulings Branch