HQ 110871: Survey; inspection; requirements of governmental entity or classification society; segregation of dutiable and non- dutiable items Vessel: GREEN BAY V-17 Vessel Repair Entry No. 718-0000391-6

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 110871

                          July 27, 1990

VES-13-18-CO:R:P:C  110871 KVS

CATEGORY:  Carriers

Chief, Technical Branch
Commercial Operations Division
1 World Trade Center
Suite 705
Long Beach, CA  90831

RE:  Survey; inspection; requirements of governmental entity or
     classification society; segregation of dutiable and non-
     dutiable items
     Vessel:  GREEN BAY V-17
     Vessel Repair Entry No. 718-0000391-6

Dear Sir:

     This is in response to your memorandum of February 21, 1990,
which forwards for our consideration an Application for Relief
filed in connection with the GREEN BAY V-17, vessel repair entry
no. 718-0000391-6.  Our findings are set forth below.

FACTS:

     The GREEN BAY underwent foreign shipyard operations in
Yokosuka, Japan, from October 6-9, 1989.  The vessel arrived in
the United States on October 22, 1989, at Portland, Oregon.  The
application for relief currently under consideration was filed
January 22, 1990.  Although the records before us do not give any
indication that an extension was ever requested by the applicant,
we are told that an extension in excess of 30 days was granted by
the Vessel Repair Liquidation Unit in San Francisco due to
"special circumstances which warranted the extra time."

     Apparently, the transmittal of the entry from Portland was
delayed and the San Francisco Vessel Repair Liquidation Unit did
not receive it December 3, 1989.  To avoid prejudice to the
vessel owner, the applicant was given until January 22, 1990, (32
days after the time limitation provided in the regulations) to
file an application.  In the future, we would prefer that
decisions involving such procedural irregularities be referred to
Headquarters.

                              - 2 -


     In regard to the relief requested by the applicant, one
item has been submitted for our review.

ISSUE:

     Whether the foreign shipyard operations undertaken on the
subject vessel are dutiable under 19 U.S.C. 1466.

LAW AND ANALYSIS:

     Title 19, United States Code, section 1466(a), provides in
pertinent part for 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 the foreign or
coastwise trade, or vessels intended to be employed in such
trade.

     Customs has held, however, that surveys undertaken to meet
the specific requirements of a governmental entity,
classification society, insurance carrier, etc., are not
dutiable, even if dutiable repairs were effected as a result of
the survey. (See C.I.E. 429/61; C.S.D. 79-277).

     In the application under consideration, the applicant
alleges that the survey undertaken in Japan was performed
pursuant to U.S. Coast Guard regulations.  The documents
submitted by the applicant however, contain neither a copy of a
Coast Guard report indicating that a survey was completed
according to USCG requirements, nor a copy of a Coast Guard
invoice billing the owner for the cost of the survey.  Thus, we
are unable to determine whether the Coast Guard performed a
survey and, if a survey was performed, whether the survey was
conducted pursuant to the specific requirements of the Coast
Guards.

     The only documentation submitted that makes reference to the
contested survey is Maritime Engineering (Kobe office) shipyard
invoice #IB-1821, which states as part of its description,
"supplied missing gears."  No other information concerning the
gears has been furnished by the applicant.  Thus, it would appear
that repairs were performed in conjuction with the alleged Coast
Guard survey.  The invoice does not segregate the cost of
repairs made from the cost of the survey allegedly performed by
the Coast Guard pursuant to its specific requirements.

     The Customs Service has held that where items are not
segregated or separately shown but are lumped together, duty will
be assessed on the entire cost even though certain items may be
non-dutiable (see C.I.E. 565/55. C.I.E. 1325/58, C.D. 1836).


                              - 3 -


HOLDING:

     1).  Where an applicant submits no evidence which indicates
that a survey was performed pursuant to the specific requirements
of a governmental entity, classification society, insurance
carrier, etc., and repairs were performed, the cost of that
survey is dutiable.

     2).  In the absence of the segregation of the cost of
dutiable repairs from the cost of an inspection, which may or may
not be dutiable, duty will be assessed on the entire cost of the
item.

                                     Sincerely,




                                     B. James Fritz
                                     Chief
                                     Carrier Rulings Branch