HQ W116691

October 16, 2006

VES-13-18-RR:BSTC:CCI 116691 IDL

CATEGORY: Carriers

Supervisory Customs Entry Officer

U.S. Customs and Border Protection

1515 Poydras Street, 17^th^ Floor

New Orleans, Louisiana 70112

Re: 19 U.S.C. § 1466; Vessel Repair Entry C20-0060815-1; Protest No.
2002-

03-100043; MV R. J. PFEIFFER, V. 202

Dear Madam:

This is in response to your memorandum of June 22, 2006, forwarding for
our review the protest filed by counsel on behalf of Matson Navigation
Company with respect to Vessel Repair Entry C20-0060815-1. Our ruling on
this matter is set forth below.

**FACTS:**

The MV R. J. PFEIFFER, a U.S.-flagged vessel owned by the protestant,
incurred foreign shipyard costs. On November 12, 2001, the vessel
arrived at Los Angeles, California. A vessel repair entry was timely
filed. On October 25, 2002, a determination of duty occurred in the
amount of \$9,714.94. On January 21, 2003, the protestant filed Protest
No. 2002-03-100043.

**ISSUE:**

Whether the costs for which the protestant seeks relief are dutiable
under

19 U.S.C. § 1466?

**LAW AND ANALYSIS:**

Initially, we note that the information in the file indicates that the
protest, with application for further review, was timely filed under the
statutory and regulatory provisions for protests. 19 U.S.C. 1514(c)(3)
and 19 CFR 174.12(e).

Title 19, United States Code, section 1466(a) (19 U.S.C. 1466(a))
provides, in pertinent part, for the payment of an *ad valorem* duty of
50 percent of the cost of "...equipments, or any part thereof, including
boats, purchased for, or the repair parts or materials to be used, or
the expenses or repairs made in a foreign country upon a vessel
documented under the laws of the United States...."

Counsel for the protestant filed a supplemental submission, dated June
13, 2006, with the VRU, pursuant to section 1554 of the "Miscellaneous
Trade and Technical Corrections Act of 2004." Section 1554 of the
Miscellaneous Trade and Technical Corrections Act of 2004, signed by the
President on December 3, 2004, amended the vessel repair statute by
adding the following exemption to section 1466(a) found in 19 U.S.C. §
1466(h):

\(4\) the cost of equipment, repair parts, and materials that are
installed on

a vessel documented under the laws of the United States and engaged in

the foreign or coasting trade, if the installation is done by members of
the

regular crew of such vessel while the vessel is on the high seas.

Declaration and entry shall not be required with respect to the
installation, equipment, parts, and materials....

This legislation further provides for a retroactive effective date for
that equipment, repair parts, and materials installed on or after April
25, 2001.

Subsequently, Section 1631 of the "Pension Protection Act of 2006",
signed by the President on August 17, 2006, further amended section
1466(h)(4) by exempting from duty such costs if the installation is done
by members of the regular crew while the vessel is "in foreign waters,
or [in a foreign port]{.underline}, and does not involve foreign
shipyard repairs by foreign labor."

As noted above, the subject protest was received by the VRU on January
21, 2003, and counsel for the protestant filed a supplemental submission
dated June 13, 2006.

The items under examination, TR Nos. 547, 550, 590, 596, 615, 617, 619,
620-622, 634, 635, and 640 involve installation of spare repair parts to
the vessel by members of the regular crew of the vessel while the vessel
was in a foreign port, and such items are exempt from duties under
section 1466(h)(4). Accordingly, we find that these items are
non-dutiable.

**HOLDING:**

The costs for which the protestant seeks relief are non-dutiable under
19 U.S.C.

§ 1466. The protest should be GRANTED.

In accordance with the Protest/Petition Processing Handbook (CIS HB,
January 2002, pp. 18 and 21), you are to mail this decision, together
with the Customs Form 19, to the protestant no later than 60 days from
the date of this letter. Any reliquidation of the entry in accordance
with the decision must be accomplished prior to mailing of the decision.
Sixty days from the date of the decision the Office of Regulations and
Rulings will make the decision available to CBP personnel, and to the
public on the CBP Home Page on the World Wide Web at www.cbp.gov, by
means of the Freedom of Information Act, and other methods of public
distribution.\
\
Sincerely,

Glen E. Vereb

Chief

Cargo Security, Carriers and Immigration Branch