HQ 112512: Vessel Repair; Government Owned Vessels; Military Sealift Command; MSC; Undocumented Vessels; USNS ANTARES; Entry No. C15-0012343-0.

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 112512

                          May 27, 1993

VES-13-18  CO:R:IT:C  112512  JBW

CATEGORY:  Carriers

Deputy Assistant Regional Commissioner
Commercial Operations
c/o Regional Commissioner
New Orleans, LA 70130-2341

RE:  Vessel Repair; Government Owned Vessels; Military Sealift
     Command; MSC; Undocumented Vessels; USNS ANTARES; Entry No.
     C15-0012343-0.

Dear Sir:

     This letter is in response to your memorandum that forwards
for our review and ruling the above-referenced vessel repair
entry.

FACTS:

     The record reflects that the subject vessel, the USNS
ANTARES, arrived at the port of Wilmington, N.C., on May 26,
1991.  Vessel repair entry, number C15-0012343-0, was filed on
May 31, 1991.  The entry indicates that the vessel is owned by
the United States of America, Department of the Navy, Military
Sealift Command (MSC).  A letter accompanying the application
shows that the vessel is one of eight Fast Sealift Ships owned by
the Navy.  Letter of Richard Haynes, Counsel for the Military
Sealift Command, dated August 5, 1992.  The letter further states
that all the FSS ships owned by the Navy are undocumented and are
prohibited from engaging in commerical trade.

ISSUE:

     Whether undocumented MSC FSS vessels are intended to engage
in the foreign or coasting trade, thereby subjecting such vessels
to the provisions of 19 U.S.C.  1466.

 LAW AND ANALYSIS:

     Title 19, United States Code, section 1466, provides in
pertinent part for payment of duty in the amount of fifty 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 the foreign or
coastwise trade.  The Customs Regulations apply this provision to
government-owned or chartered vessels "if documented with a
registry, coastwise trade, or Great Lakes trade endorsement, or
if undocumented, intended to engage in foreign, coastwise, or
Great Lakes trade."  19 C.F.R.  4.14(a)(2)(ii) (1992)(emphasis
added).   

     To conclude that the repairs made to the undocumented
ANTARES are subject to duty, we must first determine whether the
vessel was intended to engage in the foreign or coastwise trade.
Foreign Trade is defined as the "[c]ommercial interchange of
commodities between countries; export and import trade."  Black's
Law Dictionary 583 (5th Ed. 1979).  Further, trade connotes
buying and selling for profit.  American Heritage Dictionary of
the English Language 1284 (2d Ed. 1985).  The Customs Service has
held that government-owned, but privately operated vessels
engaged exclusively in the carriage of government cargo are not
engaged in the foreign or coasting trade within the meaning of 19
U.S.C.  1466.  C.I.E. 202/48, dated June 4, 1948.  Moreover,
undocumented government vessels that are not intended to engage
in the foreign or coasting trade are not required to file a
vessel repair entry.  Id.; C.I.E. 2335/66, dated November 30,
1966.

     Whether an undocumented vessel is intended to engage in
trade must be established through the submission of evidence on
the use of the vessel.  MSC has submitted documents to
demonstrate that its FSS ships are not permitted to engage in
commercial trade.  Specifically, the General Counsel of the MSC
has stated by letter that the FSS ships are engaged exclusively
in the carriage of Department of Defense cargo in connection with
the military contingency operations and military exercises. 
Consequently, the subject vessel was not in commerical trade at
the time of its arrival.

     Based on these authorities, we find that undocumented MSC
FSS vessels are not intended to engage in the foreign or coasting
trade.  Such vessels are therefore not subject to vessel repair
duties under 19 U.S.C.  1466.  The USNS ANTARES, being an active
FSS ship, is not subject to duty under 19 U.S.C.  1466.  

     This determination applies only to undocumented FSS vessels
owned by MSC.  Documented vessels that are owned or operated by
MSC continue to be subject to vessel repair duties under 19
U.S.C.  1466.

HOLDING:

     Undocumented MSC FSS vessels do not carry commercial cargo
and are therefore not intended to engage in the foreign or
coasting trade.  Such vessels are therefore not subject to the
provisions of 19 U.S.C.  1466.  The USNS ANTARES, being an active
FSS ship, is not subject to duty under 19 U.S.C.  1466.  



                              Sincerely,




                              Acting Chief