HQ 109480: Determination of build of an inflatable boat of less than 5 net tons when the inflatable "tube" portion of the boat is built abroad

us-cbp-cross-rulings-hq-109480HQ 109480: Determination of build of an inflatable boat of less than 5 net tons when the inflatable "tube" portion of the boat is built abroadGuidance

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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 109480

                                     May 5, 1988

          VES-3-23/VES-3-02 CO:R:P:C  109480 PH

          CATEGORY:  Carriers

          Mrs. Suzanne Perry
          Blue Odyssey Adventures
          Post Office Box 10
          Hanalei, Hawaii 96746

          RE:  Determination of build of an inflatable boat of less than 5
          net tons when the inflatable "tube" portion of the boat is built
          abroad

          Dear Mrs. Perry:

              This in response to your letter of March 27, 1987, received
          in this office on April 26, 1988, concerning the replacement of
          the "tube" portion of your 1984 28 foot Motomar inflatable boat.
          Our ruling to you dated December 9, 1985 (file number:  107955),
          also concerned this matter.  In our letter of November 23, 1987
          (file number:  108917), we advised you that, although we had a
          record of having received your March 27, 1987, letter, we were
          unable to find it.  The letter we received on April 26, 1988, is
          apparently a duplicate copy of your original March 27, 1987,
          letter.

          FACTS:

              Our ruling of December 9, 1985 (file number:  107955), held
          that your 1984 28 foot Motomar inflatable boat would be consid-
          ered to have been built in the United States, for purposes of the
          coastwise laws, after undergoing the rebuilding processes de-
          scribed in your letter of October 1, 1985.  These processes were
          described in our ruling as follows:

                       ... [T]he console, motors, and floorboards were
                    removed, the boat was deflated, and the keel was re-
                    moved.  New floorboards, runners, stringers, gas box,
                    fish/ice box, storage boxes, console and keel were
                    made.  Rubber material was purchased to replace the
                    seams and heavily worn areas of the boat.  The center
                    section directly below the keel was retaped using a


















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                    full length patch for reinforcement.  The side seams
                    along the pontoons were all retaped and refinished with
                    gel-coat.  The lace cup was replaced with tow rings to
                    support the lifelines.  All above and below water seams
                    were retaped on the boat.  The bow tow ring was removed
                    and replaced.

                        ... [M]etal work ... consisting of the installation
                    of transom support bars and stainless backing plates
                    where they are through-bolted to the transom and deck
                    [was done].  Stainless channel support bars and corre-
                    sponding backing plates were manufactured for the run-
                    ners.  Stainless motor backing plates were installed on
                    the transom.  Stainless "L" brackets were manufactured
                    to mount the console and storage boxes.  Stainless
                    through-bolts were purchased to bolt down the runners
                    on the floorboards and drilled for cotter pins to se-
                    cure the new plates on the keel.  New stringers were
                    fitted with copper tubing inserts.  The runners were
                    epoxied and bolted to the floorboards.  Holes in the
                    support block for the keel, which serves as a bilge
                    outlet, were enlarged.

                        ... [T]he hull, including tube and transom, is
                    valued at $7,000.  The two 90 horsepower Mercury motors
                    purchased were valued at $10,000.  The total investment
                    made for boat reconstruction was $7,801.80 for parts
                    and labor.  Equipment purchased (radios, antennas,
                    PFD's, etc.) came to a total of $6,751 [resulting in]
                    the total cost of transforming the boat [being]
                    $24,552.

              You now state that you have found it necessary to replace the
          "tube," or the part of the boat which holds air.  You have pur-
          chased a new tube from the Motomar factory in Italy for $7,000.
          The same work that was done on the original tube has been done on
          the new tube.  The transom which came attached to the tube was
          cut down to size, refinished with epoxy marine resin, and new
          holes were drilled for through-bolts to mount the backing plates
          for the engines.  The transom was double taped where it meets the
          pontoons.

              Copies of receipts and photographs concerning the work
          originally done on the boat were included with the ruling request
          for our December 9, 1985, ruling but the photographs you state
          were enclosed with your March 27, 1987, letter did not arrive in
          this office.  We assume, as you state, that these photographs
          "coincide" or are similar to those enclosed with the ruling
          request for our December 9, 1985, ruling.












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          ISSUE:

              Is an inflatable boat, the "tube" portion of which was built
          abroad, which was originally modified or rebuilt in the United
          States substantially enough to be considered built in the United
          States, for purposes of the coastwise laws, still considered to
          have been built in the United States when the original foreign-
          built tube portion of the boat is replaced with another such
          foreign-built tube portion?

          LAW AND ANALYSIS:

              Generally, the  coastwise laws prohibit the transportation of
          merchandise or passengers between points in the United States em-
          braced within the coastwise laws in any vessel other than a ves-
          sel built in, documented under the laws of, and owned by citizens
          of the United States.  The passenger coastwise law, 46 U.S.C.
          App. 289, provides that:

                    No foreign vessel shall transport passengers between
                    ports or places in the United States, either directly
                    or by way of a foreign port, under a penalty of $200
                    for each passenger so transported and landed.

              Pursuant to 46 U.S.C. 12106 and 12110 and their predecessors
          (46 U.S.C. 65i and 65m and, before them, 46 U.S.C. 11) and
          consistent with 46 U.S.C. App. 883, the coastwise merchandise
          law, the Customs Service has consistently held that the prohibi-
          tion in 46 U.S.C. App. 289 applies to all non-coastwise-qualified
          vessels.  Non-coastwise-qualified vessels include any vessel oth-
          er than a vessel built in, properly documented under the laws of,
          and owned by citizens of the United States, with certain excep-
          tions (see 46 U.S.C. 12106(a)(2)(B) and 19 CFR 4.80(a)(2) and
          (3)).

              Usually, the United States Coast Guard determines whether a
          vessel is built in the United States, for purposes of documenta-
          tion of the vessel, and this determination is followed by Customs
          for purposes of the requirement that vessels engaging in the
          coastwise trade must be built in the United States.  Vessels
          which are of less than 5 net tons, as we understand to be true of
          the Motomar inflatable boat under consideration, cannot be
          documented under the United States flag by the Coast Guard.

              Qualified vessels of less than 5 net tons are not precluded
          from engaging in the coastwise trade simply because they cannot
          be documented under the laws of the United States, however.  Sec-
          tion 4.80(a), Customs Regulations (19 CFR 4.80(a)), enumerates
          the vessels which may engage in the coastwise trade.  Subpara-
          graph (a)(2) of this section (i.e., 19 CFR 4.80(a)(2)) provides











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          that no vessel exempt from documentation (e.g., of less than 5
          net tons) shall transport any passengers or merchandise between
          United States coastwise points unless the vessel is owned by a
          citizen of the United States and is entitled to or, except for
          its tonnage, would be entitled to be documented with a coastwise
          license.  As stated above, to be entitled to be documented with a
          coastwise license a vessel must, among other things, be built in
          the United States (46 U.S.C. 12106(a)(2)), with an exception
          inapplicable in this case.

              Thus, foreign-built inflatable boats may not be used in the
          coastwise trade.  Customs has ruled, however, that inflatable
          boats which, although originally built abroad, have been suffi-
          ciently modified or rebuilt in the United States may be consid-
          ered built in the United States, for purposes of the coastwise
          laws.  We so held with regard to the work done on your Motomar
          inflatable boat in our ruling of December 9, 1985, citing as au-
          thority the initial such ruling, dated March 1, 1985 (file number
          107435/106756).  Since the imported portion of your Motomar in-
          flatable boat after the replacement of the original tube with the
          new tube will not be any greater than was the imported portion of
          the boat before replacement of the original tube, we conclude
          that the boat would still be considered built in the United
          States, for purposes of the coastwise laws.

          HOLDING:

              An inflatable boat, the "tube" portion of which was built
          abroad, which was originally modified or rebuilt in the United
          States substantially enough to be considered built in the United
          States, for purposes of the coastwise laws, is still considered
          to have been built in the United States when the original
          foreign-built tube portion of the boat is replaced with another
          such foreign-built tube portion.

                                        Sincerely,




                                        Kathryn C. Peterson
                                        Chief
                                        Carrier Rulings Branch












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