Application for Further Review; 19 U.S.C. § 1466; Vessel Repair Entry NN3-0001407-7; Protest 2002-15-100036; M/V MAERSK ATLANTA (ex-M/V MAERSK KOWLOON)

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H267553 May 18, 2017 VES-3-18-OT-RR:BSTC:CCR H267553 ASZ CATEGORY: Carriers Supervisory Liquidation Specialist C/o Vessel Repair Unit U.S. Customs and Border Protection 423 Canal Street, Suite 246 New Orleans, LA 70130 RE: Application for Further Review; 19 U.S.C. § 1466; Vessel Repair Entry NN3-0001407-7; Protest 2002-15-100036; M/V MAERSK ATLANTA (ex-M/V MAERSK KOWLOON) Dear Madame: This is in response to your memorandum dated July 7, 2015, forwarding for our further review the protest filed by the law offices of Givens & Johnston, on behalf of their client, Maersk Line, Limited, (“Maersk”) with respect to Vessel Repair Entry NN3-0001407-7. Our decision is set forth below. FACTS The M/V MAERSK ATLANTA is a U.S.-flag vessel that was previously registered in Singapore as the M/V MAERSK KOWLOON. While the vessel was registered in Singapore, it incurred certain foreign shipyard costs for maintenance, repairs, and equipment. On July 18, 2013, the vessel was re-flagged into the U.S.-flagged fleet and was entered into the Port of Newark, New Jersey the following day. One day later, Maersk filed an incomplete CBP Form 226 (Record of Vessel Foreign Repair or Equipment Purchase) to document the foreign shipyard costs as required by 19 C.F.R. § 4.14. Maersk subsequently requested and was granted two 30-day extensions to submit evidence of these costs. Maersk was thus required to submit a complete vessel repair entry supported by evidence showing the cost of each item entered by December 16, 2013, which it did on December 12, 2013. On December 13, 2013, Maersk submitted an application for relief of duty on some of the foreign shipyard costs. While that application was under consideration with the port and over four months after the deadline for submitting evidence of the costs of foreign vessel repairs under 19 C.F.R. § 4.14(f) had passed, Maersk submitted an amendment to the cost information. This amendment added additional costs that Maersk also contends are eligible for a duty refund. The port denied duty relief for the costs included in Maersk’s amendment because the costs were not submitted before the deadline imposed by 19 C.F.R. § 4.14(f). A protest was filed May 22, 2015, and is now before us for further review. ISSUE Whether, when determining the amount of duty owed for foreign vessel repairs under 19 U.S.C. § 1466(a), U.S. Customs & Border Protection (“CBP”) must consider cost information submitted after the deadline imposed by 19 C.F.R. § 4.14(f). LAW AND ANALYSIS 19 U.S.C. § 1466(a) requires the payment of a 50% ad valorem duty on the “[t]he equipments, or any part thereof . . . or the repair parts or materials to be used, or the expenses of repairs made in a foreign country upon 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 . . . .” This provision is carried out by 19 C.F.R. § 4.14, which also provides for bond requirements, entry requirements, and deadlines for submitting evidence of the cost of foreign repairs. Under 19 C.F.R. § 4.14(f), “[a] complete vessel repair entry must be supported by evidence showing the cost of each item entered.” If, as here, the vessel repair entry is incomplete when it is first submitted, “evidence to make it complete must be received by the appropriate VRU port of entry as identified in paragraph (g) of this section within 90 calendar days from the date of vessel arrival.” Id. The port may grant one 30-day extension to this deadline, with any further requests for an extension requiring approval from CBP headquarters. Id. Here, both the port and CBP headquarters granted Maersk 30-day extensions to submit the information required by 19 C.F.R. § 4.14(f) after the M/V MAERSK ATLANTA entered the port of Newark on July 19, 2013. The due date for the information was thus originally October 17, 2013, which was then extended to December 16, 2013. Despite these extensions, Maersk failed to submit the required information until over four months after the deadline and over six months after the vessel’s arrival in the United States. Pursuant 19 C.F.R. § 4.14(i)(1), “relief from the assessment of vessel repair duty will not be granted unless an Application for Relief is filed with CBP.” Furthermore, “if no Application is filed or if a submission which does not meet the minimal standards of an Application for Relief is received, the duty amount will be determined without regard to any potential claims for relief from duty.” Id. In its protest, Maersk does not advance an argument as to why CBP should consider the untimely information that it provided. Instead, it makes the substantive argument that the costs are not dutiable under 19 U.S.C. § 1466(a) because they were incurred before the M/V MAERSK ATLANTA was re-flagged or intended to be reflagged into the U.S.-flag fleet. Based on these facts and the clear deadline imposed by the customs regulations, we hold that CBP is not required to consider cost information submitted after the deadline imposed by 19 C.F.R. § 4.14(f). Consequently, because Maersk did not timely submit the cost information that forms the basis of Maersk’s protest, those costs will be dutiable under 19 C.F.R. § 4.14(i). Maersk’s protest on this issue is therefore denied. HOLDING CBP is not required to consider cost information submitted after the deadline imposed by 19 C.F.R. § 4.14(f); those costs will be dutiable under 19 C.F.R. § 4.14(i). You are instructed to deny the protest with respect to the costs discussed in this ruling. In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2007), you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any final duty determination of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Lisa L. Burley Chief/Supervisory Attorney-Advisor Cargo Security, Carriers and Restricted Merchandise Branch Office of International Trade, Regulations and Rulings U.S. Customs and Border Protection