VES-4-01-CO:R:IT:C 111434 GEV
Mark J. Buhler, Esq.
Holland & Knight
800 North Magnolia Avenue
P.O. Box 1526
Orlando, Florida 32802
RE: Foreign-flag Yacht; Importation; Cruising license; HTSUSA;
46 U.S.C. App. 104
Dear Mr. Buhler:
This is in response to your letter dated December 3, 1990
(your ref: file no. 33776-1) requesting a ruling as to whether
your client's foreign-flag yacht would be exempt from duty if and
when it should visit the United States. Our ruling on this
matter is set forth below.
FACTS:
Mi Gaea Limited, a company incorporated in the Island of
Jersey, Channel Islands, proposes to temporarily enter its
British-flag yacht, the MI GAEA, into the United States as part
of a long shakedown cruise that would involve a voyage from
Antibes, France, to South Florida, then on to the West Indies,
and returning to Antibes several months later. The vessel would
remain in Florida for up to three or four months during which
time the vessel would undergo various repairs and be used for
pleasure cruising. After this time the vessel would depart for
the West Indies to continue the shakedown cruise and would
eventually return to its permanent berth at Antibes, France, in
late spring, 1991.
ISSUE:
Whether the entry of a foreign-flag yacht into the United
States for three of four months for the purposes of repairs and
pleasure cruising constitutes an importation resulting in the
assessment of duty under the Harmonized Tariff Schedule of the
United States Annotated.
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LAW AND ANALYSIS:
According to Additional U.S. Note 1, Harmonized Tariff
Schedule of the United States Annotated (HTSUSA), vessels brought
into the Customs territory of the United States by nonresidents
thereof for their own use in pleasure cruising shall be admitted
without formal Customs consumption entry or payment of duty.
As long as a yacht or pleasure boat is brought into the
United States by a nonresident and is not offered for sale or
charter to a U.S. resident, it is not dutiable. It is
permissible to sell or charter such a vessel to a non-resident.
If, however, the yacht is offered for sale or lease to a resident
of the United States, a consumption entry must be filed.
You should know that section 4.94, Customs Regulations (19
CFR 4.94) concerns the issuance of cruising licenses which exempt
foreign yachts from formal entry and clearance procedures (e.g.,
filing manifests, obtaining permits to proceed and exemptions
from the payment of tonnage tax and entry and clearance fees) at
United States ports. Section 4.94 was promulgated pursuant to
title 46, United States Code Appendix, section 104 (46 U.S.C.
App. 104) which authorizes the issuance of cruising licenses to
pleasure vessels of countries which extend reciprocal privileges
to United States vessels. Great Britain is on the list of
countries appearing in section 4.94(b) whose yachts may be issued
cruising licenses. The length of the cruising license is usually
dependent upon the description of the vessel's cruise within
United States waters; however, pursuant to section 4.94(c) in the
discretion of the customs district director it may remain in
force for a period of up to one year from the date of its
issuance.
HOLDING:
The entry of a foreign-flag yacht into the United States for
three or four months for the purpose of repairs and pleasure
cruising does not constitute an importation resulting in the
assessment of duty under the HTSUSA.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch