HQ 110640: Application for Relief from Vessel Repair Duties for the Vessel CHERAMIE BOTRUC II; Entry Number C27-0075257-2, Port Hueneme, California; Arrived in the United States on July 22, 1989

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 110640

                        February 15, 1990

VES-13-18-CO:R:P:C 110640

CATEGORY: Carriers

Chief, Technical Branch
Commercial Operations
Pacific Region
One World Trade Center
Long Beach, California 90831

RE:  Application for Relief from Vessel Repair Duties for the
     Vessel CHERAMIE BOTRUC II; Entry Number C27-0075257-2,
     Port Hueneme, California; Arrived in the United States on
     July 22, 1989

Dear Sir:

     Reference is made to your memorandum of November 15, 1989,
which forwards for our consideration the application for relief
from vessel repair duties assessed under section 466, Tariff Act
of 1930, as amended (19 U.S.C. 1466), filed by Mr. James Arness
of Kenai, Alaska.  Duties were assessed upon the cost of certain
engine repairs made to the subject vessel in Panama.

FACTS:

     In June, 1989, while in Panama, the vessel experienced oil
cooler and port main engine problems.  The deficiencies were
attended to on three separate occasions over a seven day period.
Finally, when it appeared that the mechanics in Panama would be
unable to properly repair the vessel it was decided to have the
vessel towed to California from Panama for repairs.  Repairs were
effected satisfactorily in California.

ISSUE:

     Whether the repairs attempted in Panama are considered
dutiable under section 1466.

LAW AND ANALYSIS:

     Section 1466 provides, in pertinent part, for the payment of
duty in the amount of 50 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.
     By issuance of C.I.E. 1128/60 on August 5, 1960 (reissued as
Treasury Decision 55193 (24)) it was established that ineffective
repairs which prove to be of no value to vessels are not dutiable
under the vessel repair statute.  This is to be distinguished
from repairs which are made as a temporary expedient, until
permanent repairs can be obtained.

     In this case there can be no question as to the value-
lessness of the repairs to the vessel operator.  Following some
$8,300 in foreign expenditures for engine work, it was still
necessary to tow the vessel from Panama to California for repairs
to the engine.  Towing costs of $40,000 were incurred for the
services of a Louisiana firm to tow the vessel from Panama to
California.  This is a clear case of ineffective repairs which
are not subject to vessel repair duties.

HOLDING:

     The attempted repairs in Panama to the vessel CHERAMIE
BOTRUC II were totally ineffective, and their cost should not be
considered subject to duty under 19 U.S.C. 1466.

                                Sincerely,




                                B. James Fritz
                                Chief
                                Carrier Rulings Branch