Vessel Repair Entry No. 718-0000430-2; 19 U.S.C. 1466; GREEN LAKE, V-48; U.S. Coast Guard inspection

HQ 113111 June 20, 1994 VES-13-18-CO:R:IT:C 113111 GOB CATEGORY: Carriers Deputy Regional Director Commercial Operations Pacific Region One World Trade Center Long Beach, California 90831 RE: Vessel Repair Entry No. 718-0000430-2; 19 U.S.C. 1466; GREEN LAKE, V-48; U.S. Coast Guard inspection Dear Sir: This is in response to your memorandum dated May 10, 1994, which forwarded the application for relief submitted by Central Gulf Lines, Inc. ("applicant") with respect to the above-referenced entry. FACTS: The record reflects the following. The GREEN LAKE ("vessel") is a U.S.-flag vessel owned and operated by the applicant. Certain foreign shipyard work was performed on the vessel on voyage 48. The vessel arrived at the port of Portland, Oregon on February 27, 1994 and filed a vessel repair entry dated March 2, 1994. You ask for our determination with respect to the following items: 1. U.S. Coast Guard inspection for low press. Co2 system. Arranged service men for the inspection. 5. Arranged mechanics to assist U.S. Coast Guard inspection for D.G. & popping test for air vessels. 8. U.S. Coast Guard inspection for electric system. Arranged electricians of TERASAKI, Electric for A.C.B. of E.S.B. and black out test for M.S.B. etc. Application The applicant states as follows: We claim the cost of the inspections are remissible based on the fact that the inspections were a part of the required - 2 - annual inspections by the U.S. Coast Guard. The labor supplied was used solely as support services for the U.S. Coast Guard Representative, by providing assistance with the inspection as required. Thus, in accordance with previous U.S. Customs decisions, these inspections meet criteria for remission of duty. ISSUE: Whether the subject items are dutiable pursuant to 19 U.S.C. 1466. LAW AND ANALYSIS: 19 U.S.C. 1466 provides for the payment of duty at a rate 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 be employed in such trade. It is Customs position that in certain cases the cost of a periodic and required inspection or survey by a governmental entity or classification society is nondutiable. However, where a periodic and required inspection or survey by a governmental entity or classification society is accompanied by repairs, the entire cost is dutiable if the repairs are not separately invoiced. In this case, the applicant has not submitted any invoices of a governmental entity or classification society. Further, the record indicates that repairs were accomplished as part of the foreign shipyard work. Accordingly, we find that the cost of the subject items is dutiable. HOLDING: The cost of the subject items is dutiable pursuant to 19 U.S.C. 1466. Sincerely, Arthur P. Schifflin Chief Carrier Rulings Branch