Vessel Repair; Protest; United States-Israel Free Trade Act; Presidential Proclamation 5924; 19 U.S.C. 1466; Vessel Repair Entry: 514-3004608-9 Protest No.: 1001-92-102546 Vessel: SS EXPORT PATRIOT Date of Entry: November 5, 1991 Date of Arrival: November 5, 1991 Date of Liquidation: March 6, 1992 Port of Arrival: Newark, New Jersey

HQ 112671 April 26, 1993 VES-13-18-CO:R:IT:C 112671 DEC CATEGORY: Carriers Deputy Assistant Regional Commissioner Classification and Value Division Attention: Residual Liquidation and Protest Branch New York, New York 10048-0945 RE: Vessel Repair; Protest; United States-Israel Free Trade Act; Presidential Proclamation 5924; 19 U.S.C. 1466; Vessel Repair Entry: 514-3004608-9 Protest No.: 1001-92-102546 Vessel: SS EXPORT PATRIOT Date of Entry: November 5, 1991 Date of Arrival: November 5, 1991 Date of Liquidation: March 6, 1992 Port of Arrival: Newark, New Jersey Dear Sir: This is in response to your memorandum of March 29, 1993, transmitting the above-referenced protest and supporting documentation submitted by Farrell Lines, Inc. Our ruling on this matter is set out below. FACTS: The record reflects that the SS EXPORT PATRIOT arrived at Newark, New Jersey, on November 5, 1991. A vessel repair entry indicating that work was performed on the vessel in Haifa, Israel, was timely filed. After the entry was liquidated, the vessel operator submitted a timely protest seeking remission of vessel repair duties based on newly submitted documentation establishing that the parts and materials used were products of Israel. ISSUE: Whether the protestant's claim for relief can be justified under the terms of the United States-Israel Free Trade Area Implementation Act of 1985, as partially implemented through Presidential Proclamation 5924 (Dec. 21, 1988). -2- LAW AND ANALYSIS: Title 19, United States Code, section 1466(a), provides, in pertinent part, for payment of an ad valorem duty of fifty percent on the cost of foreign repairs to a vessel documented under the laws of the United States to engage in the foreign or coasting trade, or a vessel intended to be employed in such trade. On December 21, 1988, the President issued Proclamation 5924 under authority of section 4(a) of the United States-Israel Free Trade Area Implementation Act of 1985. This Proclamation provides that vessel repair duties shall not be assessed on the cost of parts, equipment or materials for, or repairs to U.S. vessels if the subject expenditures are products of Israel or the work was performed in Israel. Customs interprets this to mean that the articles must be made in and installed on vessels in Israel. Articles imported from elsewhere do not qualify for the automatic duty exemption. Initially, this vessel repair was liquidated for $10,071 pursuant to 19 U.S.C. 1466. Subsequently, the vessel operator submitted this protest together with new documentary evidence stating that all parts and materials used to repair the subject vessel while in Israel are products of Israel. Consequently, Customs agrees with the protestant that remission with respect to the Israeli invoice is appropriate pursuant to the above- referenced authority. HOLDING: Customs is satisfied that the protestant has met its burden of proof by establishing that the parts used to repair the subject vessel were products of Israel. Accordingly, duty with respect to these repairs and parts is to be remitted. Sincerely, Acting Chief Carrier Rulings Branch