Vessel Repair; Spare Parts; Invoices; 19 U.S.C. 1466; GREEN ISLAND, v-1; Entry No. C14-0022805-7.

HQ 112496 March 1, 1993 VES-13-18 CO:R:IT:C 112496 JBW CATEGORY: Carriers Deputy Assistant Regional Commissioner Commercial Operations c/o Regional Commissioner New Orleans, LA 70130-2341 RE: Vessel Repair; Spare Parts; Invoices; 19 U.S.C. 1466; GREEN ISLAND, v-1; Entry No. C14-0022805-7. Dear Sir: This letter is in response to your memorandum that forwards for our review the petition for review filed in conjunction with the above-referenced vessel repair entry. FACTS: The record reflects that the subject vessel, the GREEN ISLAND, arrived at the port of Newport News, Virginia, on December 26, 1991. A timely vessel repair entry was filed. The petitioner filed an application for relief on February 12, 1992, in which the petitioner sought relief for the cost of various parts claimed to have been purchased in the United States and installed on the vessel. The application for relief was denied in part, for the vessel operator failed to submit United States invoices for certain parts purchased from third party vendors. The petitioner now supplements its application for relief by filing certain documents that it claims demonstrates that the parts were either manufactured in the United States or imported duty-paid into the United States. ISSUE: Whether the petitioner has submitted adequate evidence to demonstrate that spare parts sent to the subject vessel for use in foreign repairs were either manufactured in the United States or imported duty-paid into the United States. LAW AND ANALYSIS: Title 19, United States Code, section 1466, provides in pertinent part for payment of duty in the amount of fifty 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. The vessel repair statute exempts from duty spare repair parts or materials that have been manufactured in the United States or entered the United States duty-paid and are used aboard a cargo vessel engaged in foreign or coasting trade. 19 U.S.C. 1466(h). For purposes of this section, where a part is purchased from a party unrelated to the vessel owner, a United States bill of sale constitutes sufficient evidence to demonstrate that the part was either manufactured in the United States or entered in the United States, duty-paid. In cases in which the vessel operator or a related party has acted as the importer of foreign materials, or where materials were imported at the request of the vessel operator for later use by the operator, the vessel repair entry will identify the port of entry and the consumption entry number for each part installed on the ship which has not previously been entered on a Customs Form 226. Under item 1, the petitioner has submitted documentation, in the form of United States bills of sale from third party vendors, to substantiate its claim that certain parts were either manufactured in the United States or entered duty-paid. We agree with your assessments regarding the non-dutiability of these parts. Under item 6, the petitioner has not submitted United States bills of sale to establish the United States origin of the parts. Rather, the petitioner has submitted a letter from Copes-Vulcan Inc., the United States manufacturer of the parts, to establish United States origin. We have held in the context of installation of United States parts by United States labor that written documentation or other physical evidence, such as an affidavit by the equipment manufacturer, may be submitted to establish that equipment was manufactured in the United States. See Headquarters Ruling Letter 110953, dated September 19, 1990. Given the penalties that would follow false statements regarding origin, we believe that such statements should also be sufficient to establish United States manufacture for purposes of 19 U.S.C. 1466(h). The letter submitted by Copes Vulcan Inc. establishes United States origin of the parts; the cost of the parts is therefore not subject to duty. HOLDING: Parts for which United States bills of sale from third party vendors were submitted are not subject to duty pursuant to 19 U.S.C. 1466(h). Parts for which a letter from the United States manufacturer certifies domestic manufacture of the part is submitted also meet the evidentiary requirements and are not subject to duty. Sincerely, Acting Chief