Importation by an American Citizen of a Sailing Yacht Built in South Africa

HQ 110838 June 20, 1990 VES-12-02-CO:R:P:C 110838 LLB CATEGORY: Carriers Mr. Ralph Alter 121 Worcester Lane Waltham, Massachusetts 02154 RE: Importation by an American Citizen of a Sailing Yacht Built in South Africa Dear Sir: Reference is made to your letter of January 29, 1990, in which you request that we rule upon the consequences of your intended importation into the United States of a steel-hulled sail yacht of South African manufacture. FACTS: The yacht in question, a steel-hulled sail yacht with auxiliary engine, is currently documented under the flag of Great Britain. It is proposed that the yacht would be imported into the United States following purchase, and would have aboard at that time various articles comprising vessel equipment such as, sails, cushions, electronics, etc. It is stated that the yacht was built some years ago by a company named "Louw & Halvorson" which is not listed by the Treasury Department as a parastatal organization, the products of which are prohibited from importation. ISSUE: The extent of the Customs requirements associated with the importation of a South African yacht, together with its component equipment. LAW AND ANALYSIS: Sailboats, regardless of size or value, imported by a resident of the United States, are subject to an ad valorem duty of 1.5 per cent of the value of the vessel (Item 8903.91.00, Harmonized Tariff Schedule of the United States, copy enclosed). The result is likewise if the vessel is owned by a foreign corporation whose principal asset is the pleasure vessel or whose primary business relates to its use, so long as a substantial portion of the corporate stock is owned by one or more United States residents. (See Treasury Decision 54680 (14)(1958), as modified by Ruling Letter of March 2, 1965 (433.51 R). Also, Ruling Letter 107022 of March 8, 1985). There need be no concern that a separate accounting as to origin of each of the necessary components of the vessel will be required at the time of importation. The vessel, together with its equipment, will be considered as a single entity at the time that it is imported, and the country of manufacture of the vessel defines the origin of the importation as a whole. The request for ruling indicates general familiarity with the special procedures associated with importations from South Africa. The Office of Foreign Assets Control, Department of the Treasury, will require that a certain certification accompany your intended importation. Under section 545.807, Foreign Assets Control Regulations (31 CFR 545.807)(copy enclosed), you will have to certify that the yacht has no connection with any parastatal organization in South Africa. This will require that you certify that neither the builder of the vessel, nor the party from whom you purchased the yacht is such an organization. There is no blanket prohibition on importations of South African origin, but there is such a ban on such importations which are grown, produced, manufactured, marketed, or exported by a parastatal entity. HOLDING: A yacht built in South Africa may be imported, together with its usual and necessary equipment, and will be considered as a single entity upon its importation. The importation must be accompanied by a certification concerning parastatal organizations, as specified above. Sincerely, B. James Fritz Chief Carrier Rulings Branch