HQ 112808: Vessel Repair; Application for Relief; Twistlocks; Modification; Guarantee Work Vessel Repair Entry No.: 110-0104416-0 Date of Arrival: February 19, 1993 Date of Entry: February 25, 1993 Port of Arrival: Tacoma, Washington Vessel: SEA-LAND TRADER V-58

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 112808

                           August 16, 1993

VES-13-18-CO:R:IT:C  112808 DEC

CATEGORY:  Carriers

Deputy Regional Commissioner
Commercial Operations - Pacific Region
One World Trade Center
Long Beach, California  90831

RE:  Vessel Repair; Application for Relief; Twistlocks;
     Modification; Guarantee Work
     Vessel Repair Entry No.:  110-0104416-0
     Date of Arrival:  February 19, 1993
     Date of Entry:  February 25, 1993
     Port of Arrival:  Tacoma, Washington
     Vessel:  SEA-LAND TRADER V-58

Dear Sir:

     This is in response to your memorandum dated July 9, 1993,
which forwards the application for relief from vessel repair duties
filed in connection with the above-referenced vessel for our review.

FACTS:

     The SEA-LAND TRADER is owned by the Connecticut National Bank
and operated by Sea-Land Service, Inc.  It is an American-flag
vessel.  While abroad, the SEA-LAND TRADER stopped in Kaohsiung,
Taiwan where it underwent various operations.  The following items
have been submitted for our review.

           Invoice        Description

             02           Twistlocks and miscellaneous items
             03           Bridge raising guarantee items
             04           45' container modification
             05           Completion of bridge raising

An application for relief from vessel repair duties dated April 14,
1993, was timely filed.

ISSUE:

     Whether the cost of foreign shipyard work completed aboard the
subject vessel is dutiable pursuant to Title 19, United States Code,
section 1466.

LAW AND ANALYSIS:

     Title 19, United States Code, section 1466(a) provides, in
pertinent part, for payment of a fifty percent ad valorem duty on
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the cost of foreign repairs to a vessel documented under United
States law to engage in the foreign or coastwise trade, or to a
vessel intended to be employed in such trade.

Twistlocks and Miscellaneous Articles

     The applicant has submitted an invoice from Taiyo Seiki Iron
Works Company, Ltd. for the acquisition of semi-automatic
twistlocks, "special jigs," "handling manual books," a "handling
manual video tape," and "caps for the ship" claiming that these
items are non-dutiable instruments of international traffic pursuant
to Title 19, United States Code, section 1322(a) (19 U.S.C.
 1322(a)) and Title 19, Code of Federal Regulations, section 10.41a
(19 C.F.R.  10.41a). 

     Title 19, United States Code, Section 1322(a) provides that
"[v]ehicles 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."  19 U.S.C.  1322(a)
(1992).

     Section 10.41a(a)(1) specifically designates certain items as
IITs and authorizes the Commissioner of Customs to designate other
items as IITs in decisions to be published in the weekly Customs
Bulletin.  Once designated as an IIT, these items may be released
without entry or the payment of duty, subject to the provisions of
 10.41a.

     To qualify as an IIT within the meaning of 19 U.S.C.  1322(a)
and the regulation issued thereunder (19 C.F.R.  10.41a), an article
must be used as a container or holder.  Additionally, the article
must be substantial, suitable for and capable of repeated use, and
used in significant numbers in international traffic.

     In Treasury Decision 82-147, it was determined that twist lock
stackers are IITs within the meaning of 19 U.S.C.  1322(a) and 19
C.F.R.  10.41a.  Since twist lock stackers are deemed to be an IIT,
the vessel repair statute is inapplicable.  Duty will not be
assessed on the cost of the foreign-purchased twist-locks.  However,
the remaining items contained in this invoice have not been
designated as IITs and, consequently, are subject to duty pursuant
to 19 U.S.C.  1466.

Guarantee Items
     Bridge Raising Guarantee Items
     45' Container Modification
     Completion of Bridge Raising

     The applicant is seeking relief from the assessment of vessel
repair duties arguing that the three above-referenced operations
were covered under a shipyard warranty provision.  These operations
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were performed several years after the vessel's original
construction.  In Sea-Land Service, Inc. v. United States, 12 C.I.T.
287, 683 F. Supp. 1404 (1988), the Court of International Trade
stated the following:

           Mindful of the legislative intent and purpose
           of section 1466, the court sets forth the follow-
           ing applicable standard or criterion to be used in
           determining whether a specific item is part of the
           original construction of the vessel or is a dutiable
           repair, under the foreign repair statute.  All work
           done and equipment added pursuant to the original
           specifications of the contract for construction of the
           vessel are not dutiable.  Hence, all work performed and
           equipment added, not required by the contract, are
           dutiable.  The basic standard is limited to work and
           equipment provided within a reasonable period of time
           after delivery of the vessel.

Sea-Land Service, 12 C.I.T. at 294, 683 F. Supp. at 1409.

     Customs interprets this decision to apply only to new vessel
construction warranties of one year or less.  One year is sufficient
time to permit the vessel owner to determine whether there has been
compliance with the construction specifications, and to ascertain 
whether the work performed pursuant to the warranty clause is
related to compliance with the specifications set forth in the
original contract for the construction of the vessel.

     The applicant is claiming duty-free treatment for work
performed under a warranty for an alleged modification and not a
warranty relating to the original construction of the vessel. 
Application of the Sea-Land Service decision, the theory that no
duty is owed because the work performed was under a warranty for an
alleged modification is, in our opinion, inapposite.  Accordingly,
these items are dutiable.

HOLDING:

     After a thorough review of the submitted evidence, this
application for relief is granted in part and denied in part for the
reasons detailed in the Law and Analysis section of this ruling.

                                Sincerely,




                                Acting Chief
                                Carrier Rulings Branch