VES-13-18 CO:R:IT:C 111309 JBW
Deputy Assistant Regional Commissioner
Classification and Value Division
ATTN: Regional Vessel Repair Liquidation Unit
6 World Trade Center
New York, New York 10048-002980
RE: Vessel Repair; United States Manufacture; Documentation; 19
U.S.C. 1466; Vessel Entry 514-3004208-8.
Dear Sir:
This letter is in response to your memorandum of September
18, 1990, which forwards for our review and ruling the petition
for review of the above-referenced vessel repair entry.
FACTS:
The record reflects that your office denied remission of
duties claimed in an application for relief filed by the vessel
owner in connection with the SEA-LAND CRUSADER. Your office
concluded that the vessel owner filed insufficient evidence to
establish that paint supplied to the vessel owner was of United
States manufacture. By letter dated August 27, 1990, the vessel
owner submitted a letter signed by the Vice-President, Sales and
Marketing, of Hempel Coatings, Inc., in which the Vice-President
states that the products delivered to the vessel owner were
manufactured in either Wallington, New Jersey, or Houston, Texas.
Also included with the letter is a purchase order filed with
Hempel that requested delivery to the vessel owner in Port
Elizabeth, New Jersey.
ISSUE:
Whether the evidence submitted by the vessel owner
establishes United States manufacture of materials used in a
foreign vessel repair.
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 such trade.
This section provides for remission, conditioned on the
furnishing of good and sufficient evidence, for:
such equipments or parts thereof or repair
parts or materials, were manufactured or
produced in the United States, and the labor
necessary to install such equipments or to
make such repairs was performed by residents
of the United States, or by members of the
regular crew of such vessel.
19 U.S.C. 1466(d)(2) (1988). To meet the evidentiary
requirement for this section, the owner or master must submit
written documentation or other physical evidence, such as an
affidavit by the manufacturer, that the parts or materials were
manufactured in the United States. See Headquarters Ruling
Letter 106515, dated April 4, 1984. The submission of a signed
statement by the manufacturer that the products under
consideration were manufactured in the United States is
sufficient to meet the evidentiary requirements.
If the vessel under consideration is a cargo vessel, then
dutiablity of the paint would be analyzed under Section 484E of
the Customs and Trade Act of 1990, Pub. L. No. 101-382, 104
Stat. 629, 709-10 (1990)(to be codified at 19 U.S.C.
1466(h)(2)), which amended the vessel repair statute to except
from duty spare repair parts or materials that have been
manufactured in the United States or entered the United States
duty-paid and are used aboard a cargo vessel engaged in foreign
or coasting trade. For purposes of this section, where a part is
purchased from a party unrelated to the vessel owner, a United
States bill of sale constitutes sufficient evidence to
demonstrate that the part was either manufactured in the United
States or entered in the United States, duty-paid. In cases in
which the vessel operator or a related party has acted as the
importer of foreign materials, or where materials were imported
at the request of the vessel operator for later use by the
operator, the vessel repair entry will identify the port of entry
and the consumption entry number for each part installed on the
ship which has not previously been entered on a Customs Form 226.
Again, the signed statement submitted by the paint manufacturer
is sufficient to meet the evidentiary requirements of this
statute. The bill of sale, if submitted, would also constitute
sufficient evidence of United States manufacture.
We note for your information that the submission of the
purchase order carries little weight in our evaluation of the
evidence. Unlike an invoice, which is a document frequently
generated by a third party contemporaneously with delivery, a
purchase order is a less certain variable in the delivery chain.
A purchase order is subject to change, for example, by both the
buyer, whose needs may change, and the seller, whose stock may
change. Thus, absent any other documentation, the purchase order
submitted alone is insufficient to demonstrate United States
manufacture.
HOLDING:
The evidence submitted by the vessel owner establishes
United States manufacture of materials used in a foreign vessel
repair.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch