VES-3-CO:R:IT:C 112800 LLB
Mr. T.W. Kennard, President
B.A. McKenzie & Company, Inc.
813 Pacific Avenue
Tacoma, Washington 98402
RE: Vessel entry and clearance; Fisheries; Guam; Vessel repair
declaration and entry; Two year rule; Foreign territory;
High seas; United States-flag fishing vessel
Dear Mr. McKenzie:
You have written requesting guidance on several issues
concerning the operation of a United States-flag tuna fishing
vessel. Your questions involve the entry and clearance laws, the
fisheries laws, and the vessel repair statute. We will recount
the facts presented in your letter and proceed to answer the
issues addressed.
FACTS:
Several operating scenarios are presented for consideration,
all involving the use of a United States-documented fishing
vessel. There are three geographical focus points presented,
which are San Diego, California, Guam or American Samoa, and New
Zealand. There are seven sailing itineraries presented, which
are as follows:
1. The vessel would depart San Diego and proceed to the high
seas to fish commercially. The vessel would return to San Diego
to off-load its own catch of fish.
2. The vessel would depart San Diego and proceed to the high
seas to fish commercially. The vessel would then proceed to Guam
to off-load its own catch of fish. The vessel would continue to
make fishing voyages out of and returning to Guam over a period
of 14 months, each time off-loading in Guam. After 14 months,
the vessel would return to San Diego, presumably in ballast.
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3. The vessel would engage in the same itinerary as described in
number 2, above, except that the period of its service after
departing from San Diego would be more than 24 months.
4. The vessel would engage in the same itinerary as described in
number 2, above, except that after repeatedly departing from and
returning to Guam to off-load catches the vessel would sail to
New Zealand to enter a drydock, this occurring within 6 months of
departure from San Diego. After the shipyard work is completed
the vessel would return to Guam for more fishing, ultimately
returning to San Diego before the expiration of 24 months from
the date it initially departed from there.
5. The vessel would engage in the same itinerary as described in
number 4, above, except that the period of its absence since
departing from San Diego would be longer than 24 months.
6. The vessel would engage in the same itinerary as described in
number 4, above, except that arrival in New Zealand would occur
more than 6 months after the vessel departs from San Diego, and
arrival in San Diego is less that 24 months from the date of
departure from there.
7. The vessel would engage in the same it.inerary as described
in number 4, above, except that arrival in New Zealand would be
more than 6 months after departure from San Diego, and arrival in
San Diego would occur more that 24 months after the date of
departure from that port.
ISSUE:
The issues for consideration are whether the vessel entry
and clearance statutes are applicable to any of the proposals,
whether a Customs Form 226 must be presented (either as a
declaration or an entry) in connection with any of the voyages,
and whether the vessel's logs must be available for Customs
inspection upon entry of the vessel in the United States.
LAW AND ANALYSIS:
Vessels of the United States are required to enter under
section 434, Tariff Act of 1930, as amended (19 U.S.C. 1434), and
to clear under section 4197 of the Revised Statutes of the United
States (46 U.S.C. App. 91), when arriving from or departing for a
foreign port or place. There is no requirement that a United
States-documented vessel clear for or enter upon return from a
voyage solely to the high seas unless a hovering vessel is
visited during the voyage.
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The phrase "foreign port or place" is not defined in the
Customs or navigation laws. There is a definition of the term
"United States" in the Customs laws which we adopt. Section
401(h), Tariff Act of 1930, as amended (19 U.S.C. 1401(h)),
states that the United States, "...includes all Territories and
possessions of the United States except the Virgin Islands,
American Samoa, Wake Island, Midway Island, Kingman Reef,
Johnston Island, and the island of Guam." Guam and American
Samoa are, therefore, considered to be foreign ports or places
for purposes of the issues raised in this ruling.
Since Guam and American Samoa are considered foreign ports
or places, it would be necessary for a vessel departing the
United States and intending to call at those locations to obtain
a clearance from Customs. Likewise, it would be necessary for a
vessel arriving from either of those locations to formally enter
with Customs. These requirements are not affected by the actual
or intended duration of a vessel's absence from the United
States.
Part of the vessel entry process for American-flag vessels
involves the submission of a Customs Form 226. This is a dual
use form and may be submitted either as a vessel repair
declaration or a vessel repair entry. As a part of the formal
entry package, the master of a U.S. vessel is required to include
a Form 226, submitted as a declaration. This submission is
required to be made as a negative declaration if no foreign
shipyard work was performed (see section 4.7(d)(1)(ii), Customs
Regulations (19 CFR 4.7(d)(1)(ii)). The vessel repair statute
itself, section 466, Tariff Act of 1930, as amended (19 U.S.C.
1466(e)(1)), provides that for American-flag vessels which return
to the United States two years or longer after last leaving, the
only purchases which are subject to duty are those for repairs,
parts, materials, and equipment made during the first six months
of the extended absence, and those made for fish nets and netting
at any time during the absence. Although it is necessary to file
a declaration for all purchases made during the absence, only
those items purchased within the time limitations described above
are required to be reported on a Form 226 submitted as an entry.
In light of the preceding discussion, it is possible to
summarize our findings as applied to the seven numbered scenarios
as follows:
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1. In the first scenario, the vessel would not be required to
clear when going to the high seas to fish. The vessel would not
be required to enter upon return from the high seas, since as a
U.S.-documented fishing vessel its own catch is considered a
product of the American fisheries and not unentered foreign
merchandise. There are, of course, no vessel repair
implications.
2. In the second scenario, the vessel would be required to clear
for Guam via the high seas upon departure from San Diego.
Likewise, entry would be required upon its return, and a negative
vessel repair declaration should be filed with Customs
3. In the third scenario, the findings applicable to number 2,
above, should be employed.
4. In the fourth scenario, the vessel would be required to clear
upon departure from and enter upon return to San Diego. A vessel
repair declaration as well as an entry would be required. All
purchases would be required to be reported, and all would
potentially be liable for duty under the statute.
5. In the fifth scenario, the vessel would be required to clear
and enter when leaving and returning to San Diego. A vessel
repair declaration would be required to cover the entire period
of the voyage, but the follow-up vessel repair entry would be
required to cover only those purchases occurring during the first
six months of the voyage.
6. In the sixth scenario, the vessel would be required to clear
and enter when leaving and returning to San Diego. A vessel
repair declaration would be required to cover the entire voyage,
and an entry would be required with potential liability for duty
extending to all purchases since the voyage was of less than 24
months duration.
7. In the seventh scenario, the vessel would be required to
clear and enter when leaving and returning to San Diego. A
vessel repair declaration would be required to cover the entire
voyage, and an entry would be required to be accompanied by
vessel log copies establishing an absence of longer that two
years with no repairs occurring within the first six months of
the extended absence from the United States.
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HOLDING:
Following a thorough review of the questions posed in light
of the applicable law and precedents, we have determined that the
laws regarding clearance, entry, and vessel repair liability have
varying applicability in the matter under consideration. Our
findings are reflected in the Law and Analysis portion of this
ruling.
Sincerely,
Arthur P. Schifflin
Chief
Carrier Rulings Branch