HQ 112708: United-States owned trucks; Foreign repairs; Running repairs; Dutiability of repairs; Reportability of repairs; Retention of repair records; 19 U.S.C. 1322; 19 CFR 123.17

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 112708

                          June 25, 1993


BOR-7-04-CO:R:IT:C  112708 LLB

CATEGORY:  Carriers

Ms. Rebecca A. Raleigh
Fredrikson and Byron
1100 International Centre
900 Second Avenue South
Minneapolis, Minnesota 55402-3397

RE:  United-States owned trucks; Foreign repairs; Running repairs;
     Dutiability of repairs; Reportability of repairs; Retention
     of repair records; 19 U.S.C. 1322; 19 CFR 123.17

Dear Ms. Raleigh:

     Reference is made to your letter of April 22, 1993, in which
you request that we rule on several issues concerning the operation
and repair of truck tractors.  The vehicles in question are owned
by a United States company, and engage in the hauling of
merchandise between the United States and Canada.

FACTS:

     Truck tractors owned by a domestic concern engage in the
hauling of merchandise between the United States and Canada.  On
occasion while in Canada, merchandise is hauled between points in
that country.  Additionally, the tractors are sometimes serviced
or repaired while in Canada.  While the incoming ruling request is
silent on the point, it is assumed for the purposes of this ruling
that the truck tractors in question are operating with the benefit
of Instrument of International Traffic designation.

ISSUES:

1.  Whether, upon re-entry into this country, there is any
liability for duty on truck tractors which are United States-owned
and which previously departed the United States to deliver
merchandise in Canada.

2.  Whether United States-owned truck tractors which depart this
country to deliver merchandise in Canada, and which are serviced
or repaired while abroad, are subject to duty in the United States
on the value of the repairs obtained.

3.  Whether records of any foreign repairs to United States-owned
truck tractors must be retained or filed with an agency of the
Federal Government.

                              - 2 -

LAW AND ANALYSIS:
               
     Title 19, United States Code, section 1322(a), as amended (19
U.S.C. 1322(a)), provides, in pertinent part:

          Vehicles and other instruments of
          international traffic, of any class specified
          by the Secretary of the Treasury, shall be
          excepted from the application of the customs
          laws to such extent and subject to such terms
          and conditions as may be prescribed in
          regulations or instructions of the Secretary
          of the Treasury....

     The relevant implementing regulations promulgated under
statutory authority appear in Parts 10 and 123 of the Customs
Regulations (19 CFR Parts 10 and 123), and regulate the use and
movement of designated instruments within the United States.  The
questions regarding use which are posed for our determination are
directed to activities occurring in Canada.  Actions taken with
regard to truck tractor operations in Canada by officials of Canada
Customs  have no effect on the status of such vehicles at the time
they enter or during the pendency of their operation inside the
United States.  Simply put, the fact that duty may have been
assessed by the Government of Canada in connection with the use of
a United States-owned vehicle in that country, does not subject
that vehicle to our entry and duty requirements as a vehicle which
has been diverted from international traffic under United States
law.  

     Conversely, certain foreign repair operations effected upon
United States-owned truck tractors are of interest to United States
Customs and may result in duty consequences.  Section 123.17(b),
Customs Regulations (19 CFR 123.17(b)), provides, in pertinent
part:

          A report of the first arrival in the United
          States of domestic trucks...and their
          equipment after repairs have been made in a
          foreign country, other than those required to
          restore such vehicle or equipment to the
          condition in which it last left the United
          States ("running repairs"), shall be made by
          the driver or person in charge of the vehicle
          promptly, in writing, to the Customs officer
          at the port of reentry.  The report shall
          state the time and place of arrival and the
          nature and value of the repairs.  Each such
          vehicle or its equipment when withdrawn from
          international traffic shall be subject to duty
          upon the value  of the repairs (other than
          "running repairs") made abroad at the 

                              - 3 -


          rate at which the repaired article would be 
          dutiable if imported.

     Customs interprets this regulation to mean that reports need
be made only with respect to other than running repairs, and that
no duty is assessed upon the value of running repairs.  Further, 
repair receipts should be retained for presentation to United
States Customs at such time that a vehicle is withdrawn from
international traffic.

HOLDINGS:

1.  No duty is owed to the United States upon reentry into this
country of a domestic truck tractor operating as an instrument of
international traffic, upon which duty has been assessed by Canada
Customs in connection with the operation of that vehicle in Canada. 
In light of this finding, issues regarding any applicable foreign
tax credit associated with double duty assessment are moot.

2.  United States-owned truck tractors returning to this country
after having been repaired or serviced while aborad, are assessed
duty only upon the value of those repairs which are not "running
repairs" as defined in 19 CFR 123.17(b).

3.  Records of foreign repairs to domestic truck tractors should
be retained for presentation to United States Customs at such time
as those vehicles may be withdrawn from international traffic.

                                  Sincerely,




                                  Acting Chief
                                  Carrier Rulings Branch