19 U.S.C. 1466; 19 U.S.C. 1466(h)(3); PRESIDENT WILSON, V-011; Vessel Repair Entry No. C27-0171042-1; Petition

HQ 114860 December 21, 1999 VES-13-18-RR:IT:EC 114860 GOB CATEGORY: Carriers Port Director of Customs Attn.: Vessel Repair Liquidation Unit, Room 107 P.O. Box 2450 San Francisco, CA 94126 RE: 19 U.S.C. 1466; 19 U.S.C. 1466(h)(3); PRESIDENT WILSON, V-011; Vessel Repair Entry No. C27-0171042-1; Petition Dear Madam: This ruling is in response to your memorandum of October 28, 1999, which forwarded the petition submitted by American Ship Management LLC (“petitioner”) with respect to the above-referenced vessel repair entry. FACTS: The PRESIDENT WILSON (the “vessel”), a U.S.-flag vessel whose operating agent is the petitioner, arrived at the port of Los Angeles on June 27, 1999. The subject vessel repair entry was subsequently filed. The vessel underwent certain foreign shipyard work in Japan. ISSUE: Whether the subject item is dutiable pursuant to 19 U.S.C. 1466(a)? LAW AND ANALYSIS: 19 U.S.C. 1466(a) provides for the payment of duty at a rate of fifty percent ad valorem on the cost of foreign repairs to, and equipment purchased in a foreign country for, 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. 19 U.S.C. 1466(h)(3) provides: The duty imposed by section (a) of this section shall not apply to - ... (3) the cost of spare parts necessarily installed before the first entry into the United states, but only if duty is paid under appropriate commodity classifications of the Harmonized Tariff Schedules of the United States upon first entry into the United States of each such spare part purchased in, or imported from, a foreign country. The sole item at issue in the petition is described on the CF 226 as “one reconditioned connecting rod bearing.” The petitioner asserts that the item qualifies as a spare part for the purpose of the exemption under 19 U.S.C. 1466(h)(3). The Marine Turbo & Diesel, Inc. invoice provides: “lower half for connecting rod bottom end bearing (ihi-sulzer 9rta84m) reconditioned (remetal) bearing to specification ...” The ABS Miscellaneous Survey Report provides: “One (1) Re-Metaled Lower Half of Connecting Rod Bottom End Bearing.” In response to our request for further information, the petitioner stated: The vessel received one (1) piece of a remanufactured lower half connecting rod bearing on 18 June 1999 at Yokohama, Japan. ... Upon successful certification, Messrs. MTD (Marine Turbo Diesel) Inc., purchased the bearing from IHI Marine and resold it to the President Wilson so that necessary engine repairs could be carried out. The President Wilson then accepted this part from MTD due to the necessary engine repair requirement ... After a consideration of the documentation of record, we determine that the subject item is eligible for treatment under 19 U.S.C. 1466(h)(3). HOLDING: As detailed above, the petition is granted. The subject item is eligible for treatment under 19 U.S.C. 1466(h)(3). Sincerely, Jerry Laderberg Chief, Entry Procedures and Carriers Branch