Supporting Regulations

§ 4.14

19 CFR Ch. I (4–1–02 Edition)
(b) Applicability to specific types of vessels. (1) Fishing vessels. As provided in
§ 4.15, vessels documented under U.S.
law with a fishery endorsement are
subject to vessel repair duties for covered foreign expenditures. Undocumented American fishing vessels which
are repaired, or for which parts, nets or
equipment are purchased outside the
U.S. are also liable for duty.
(2) Government-owned or chartered vessels. Vessels normally subject to the
vessel repair statute because of documentation or intended use are not excused from duty liability merely because they are either owned or chartered by the U.S. Government.
(3) Vessels continuously away for two
years or longer. (i) Liability for expenditures throughout entire absence from U.S.
Vessels that continuously remain outside the United States for two years or
longer are liable for duty on any fish
nets and netting purchased at any time
during the entire absence. Vessels designed and used primarily for transporting passengers or merchandise,
which depart the United States for the
sole purpose of obtaining equipment,
parts, materials or repairs remain fully
liable for duty regardless of the duration of their absence from the United
States.
(ii) Liability for expenditures made during first six months of absence. Except as
provided in paragraph (b)(3)(i) of this
section, vessels that continuously remain outside the United States for two
years or longer are liable for duty only
on those expenditures which are made
during the first six months of their absence. See paragraph (h)(3) of this section. However, even though some costs
might not be dutiable because of the
six-month rule, all repairs, materials,
parts and equipment-related expenditures must be declared and entered.
(c) Estimated duty deposit and bond requirements. Generally, the person authorized to submit a vessel repair declaration and entry must either deposit
or transmit estimated duties or
produce evidence of a bond on Customs
Form 301 at the first United States
port of arrival before the vessel will be
permitted to depart from that port. A
continuous or single entry bond of sufficient value to cover all potential

that all the alcoholic liquors have been
landed at their foreign destination.
[28 FR 14596, Dec. 31, 1963, as amended by
T.D. 67–201, 32 FR 12557, Aug. 30, 1967; 32 FR
12750, Sept. 6, 1967; T.D. 84–213, 49 FR 41163,
Oct. 19, 1984; T.D. 92–74, 57 FR 35751, Aug. 11,
1992]

§ 4.14 Equipment purchases by, and repairs to, American vessels.
(a) General provisions and applicability.
Under section 466, Tariff Act of 1930, as
amended (19 U.S.C. 1466), purchases for
or repairs made to certain vessels while
they are outside the United States, including repairs made while those vessels are on the high seas, are subject to
declaration, entry and payment of ad
valorem duty. This does not apply to
reimbursement paid to members of the
regular crew of a vessel for labor expended in making repairs to the vessel.
These requirements are effective upon
the first arrival of affected vessels in
the United States or Puerto Rico. The
vessels subject to these requirements
include those documented under U.S.
law for the foreign or coastwise trades,
as well as those which were previously
documented under the laws of some
foreign nation or are undocumented at
the time that foreign shipyard repairs
are performed, but which exhibit an intent to engage in those trades under
Customs interpretations. Duty is based
on actual foreign cost. This includes
the original foreign purchase price of
articles which have been imported into
the United States and are later sent
abroad for use. For the purposes of this
section, expenditures made in American Samoa, the Guantanamo Bay
Naval Station, Guam, Puerto Rico, or
the U.S. Virgin Islands are considered
to have been made in the United
States, and are not subject to declaration, entry or duty. Under separate
provisions of law, the cost of labor performed, and of parts and materials produced and purchased in Israel are not
subject to duty under the vessel repair
statute.
Additionally,
expenditures
made in Canada or in Mexico are not
subject to any vessel repair duties.
Even in the absence of any liability for
duty, it is still required that all repairs
and purchases, including those made in
Canada, Mexico, and Israel, be declared
and entered.

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United States Customs Service, Treasury

§ 4.14

duty on the foreign repairs and purchases must be identified by surety,
number and amount on the vessel repair declaration which is submitted at
the port of first arrival. At the time
the vessel repair entry is submitted by
the vessel operator to the appropriate
VRU port of entry as defined in paragraph (g) of this section, that same
identifying information must be identified on the entry form. Sufficiency of
the amount of the bond is within the
discretion of Customs at the arrival
port with claims for reduction in duty
liability necessarily being subject to
full consideration of evidence by Customs. Customs officials at the port of
arrival may consult the appropriate
Vessel Repair Unit (VRU) port of entry
as identified in paragraph (g) of this
section or the staff of the Entry Procedures and Carriers Branch in Customs
Headquarters in setting sufficient bond
amounts. These duty, deposit, and bond
requirements do not apply to vessels
which are owned or chartered by the
United States Government and are actually being operated by employees of
an agency of the Government. If operated by a private party for a Federal
agency under terms whereby that private party is liable under the contract
for payment of the duty, there must be
a deposit or a bond filed in an amount
adequate to cover the estimated duty.
(d) Declaration required. When a vessel
subject to this section first arrives in
the United States following a foreign
voyage, the owner, master, or authorized agent must submit a vessel repair
declaration on Customs Form 226, a
dual-use form used both for declaration
and entry purposes, or must transmit
its electronic equivalent. The declaration must be ready for presentation in
the event that a Customs officer boards
the vessel. If no foreign repair-related
expenses were incurred, that fact must
be reported either on the declaration
form or by approved electronic means.
The Customs port of arrival receiving
either a positive or negative vessel repair declaration or electronic equivalent will immediately forward it to the
appropriate VRU port of entry as identified in paragraph (g) of this section.
(e) Entry required. The owner, master,
or authorized representative of the
owner of any vessel subject to this sec-

tion for which a positive declaration
has been filed must submit a vessel repair entry on Customs Form 226 or
transmit its electronic equivalent. The
entry must show all foreign voyage expenditures for equipment, parts of
equipment, repair parts, materials and
labor. The entry submission must indicate whether it provides a complete or
incomplete account of covered expenditures. The entry must be presented or
electronically transmitted by the vessel operator to the appropriate VRU
port of entry as identified in paragraph
(g) of this section, so that it is received
within ten calendar days after arrival
of the vessel. Claims for relief from
duty should be made generally as part
of the initial submission, and evidence
must later be provided to support those
claims. Failure to submit full supporting evidence of cost within stated
time limits, including any extensions
granted under this section, is considered to be a failure to enter.
(f) Time limit for submitting evidence of
cost. A complete vessel repair entry
must be supported by evidence showing
the cost of each item entered. If the
entry is incomplete when submitted,
evidence to make it complete must be
received by the appropriate VRU port
of entry as identified in paragraph (g)
of this section within 90 calendar days
from the date of vessel arrival. That
evidence must include either the final
cost of repairs or, if the operator submits acceptable evidence that final
cost information is not yet available,
initial or interim cost estimates given
prior to or after the work was authorized by the operator. The proper VRU
port of entry may grant one 30-day extension of time to submit final cost
evidence if a satisfactory written explanation of the need for an extension
is received before the expiration of the
original 90-day submission period. All
extensions will be issued in writing. Inadequate, vague, or open-ended requests will not be granted. Questions
as to whether an extension should be
granted may be referred to the Entry
Procedures and Carriers Branch in Customs Headquarters by the VRU ports of
entry. Any request for an extension beyond a 30-day grant issued by a VRU
must be submitted through that unit
to the Entry Procedures and Carriers

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§ 4.14

19 CFR Ch. I (4–1–02 Edition)

Branch, Customs Headquarters. In the
event that all cost evidence is not furnished within the specified time limit,
or is of doubtful authenticity, the VRU
may refer the matter to the Customs
Office of Investigations to begin procedures to obtain the needed evidence.
That office may also investigate the
reason for a failure to file or for an untimely submission. Unexplained or unjustified delays in providing Customs
with sufficient information to properly
determine duty may result in penalty
action as specified in paragraph (j) of
this section. Extensions granted for the
filing of necessary evidence may also
extend the time for filing Applications
for Relief (see paragraph (i)(1) of this
section).
(g) Location and jurisdiction of vessel
repair unit ports of entry. Vessel Repair
Units (VRUs) are responsible for processing vessel repair entries. VRUs are
located in New York, New York; New
Orleans, Louisiana; and San Francisco,
California. The New York unit processes vessel repair entries received
from ports of arrival on the Great
Lakes and the Atlantic Coast of the
United States north of, but not including, those located in the State of Virginia. The New Orleans unit processes
vessel repair entries received from
ports of arrival on the Atlantic Coast
from and including those in the State
of Virginia, southward, and from all
United States ports of arrival on the
Gulf of Mexico including ports in Puerto Rico. The San Francisco unit processes vessel repair entries received
from all ports of entry on the Pacific
Coast including those in Alaska and
Hawaii.
(h) Justifications for relief from duty.
Claims for relief from the assessment
of vessel repair duties may be submitted to Customs. Relief may be
sought under paragraphs (a), (d), (e), or
(h) of the vessel repair statute (19
U.S.C. 1466(a), (d), (e), or (h)), each
paragraph of which relates to a different type of claim as further specified in paragraphs (h)(1)–(h)(4) of this
section.
(1) Relief under 19 U.S.C. 1466(a). Requests for relief from duty under 19
U.S.C. 1466(a) consist of claims that a
foreign shipyard operation or expenditure is not considered to be a repair or

purchase within the terms of the vessel
repair statute or as determined under
judicial or administrative interpretations. Example: a claim that the shipyard operation is a vessel modification.
(2) Relief from duty under 19 U.S.C.
1466(d). Requests for relief from duty
under 19 U.S.C. 1466(d) consist of claims
that a foreign shipyard operation or expenditure involves any of the following:
(i) Stress of weather or other casualty.
Relief will be granted if good and sufficient evidence supports a finding that
the vessel, while in the regular course
of its voyage, was forced by stress of
weather or other casualty, while outside the United States, to purchase
such equipment or make those repairs
as are necessary to secure the safety
and seaworthiness of the vessel in
order to enable it to reach its port of
destination in the United States. For
the purposes of this paragraph, a ‘‘casualty’’ does not include any purchase
or repair made necessary by ordinary
wear and tear, but does include the
failure of a part to function if it is
proven that the specific part was repaired, serviced, or replaced in the
United States immediately before the
start of the voyage in question, and
then failed within six months of that
date.
(ii) U.S. parts installed by regular crew
or residents. Relief will be granted if
equipment, parts of equipment, repair
parts, or materials used on a vessel
were manufactured or produced in the
United States and were purchased in
the United States by the owner of the
vessel. It is required under the statute
that residents of the United States or
members of the regular crew of the vessel perform any necessary labor in connection with such installations.
(iii) Dunnage. Relief will be granted
if any equipment, equipment parts, materials, or labor were used for the purpose of providing dunnage for the packing or shoring of cargo, for erecting
temporary bulkheads or other similar
devices for the control of bulk cargo, or
for temporarily preparing tanks for
carrying liquid cargoes.
(3) Relief under 19 U.S.C. 1466(e). Requests for relief from duty under 19
U.S.C. 1466(e) relate in pertinent part
to matters involving vessels normally

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United States Customs Service, Treasury

§ 4.14

subject to the vessel repair statute, but
that continuously remain outside the
United States for two years or longer.
Vessels that continuously remain outside the United States for two years or
longer may qualify for relief from duty
on expenditures made later than the
first six months of their absence. See
paragraph (b)(3)(ii) of this section.
(4) Relief under 19 U.S.C. 1466(h). Requests for relief from duty under 19
U.S.C. 1466(h) consist of claims that a
foreign shipyard operation or expenditure involves any of the following:
(i) Expenditures on LASH barges. Relief will be granted with respect to the
cost of equipment, parts, materials, or
repair labor for Lighter Aboard Ship
(LASH)
operations
accomplished
abroad.
(ii) Certain spare repair parts or materials. Relief will be granted with respect to the cost of spare repair parts
or materials which are certified by the
vessel owner or master to be for use on
a cargo vessel, but only if duty was
previously paid under the appropriate
commodity classification(s) as found in
the Harmonized Tariff Schedule of the
United States when the article first entered the United States.
(iii) Certain spare parts necessarily installed on a vessel prior to their first entry
into the United States. Relief will be
granted with respect to the cost of
spare parts only, which have been necessarily installed prior to their first
entry into the United States with duty
payment under the appropriate commodity classification(s) as found in the
Harmonized Tariff Schedule of the
United States.
(i) General procedures for seeking relief.
(1) Applications for Relief. Relief from
the assessment of vessel repair duty
will not be granted unless an Application for Relief is filed with Customs.
Relief will not be granted based merely
upon a claim for relief made at the
time of entry under paragraph (e) of
this section. The filing of an Application for Relief is not required, nor is
one required to be presented in any
particular format, but if filed it must
clearly present the legal basis for
granting relief, as specified in paragraph (h) of this section. An Application must also state that all repair operations performed aboard a vessel dur-

ing the one-year period prior to the
current submission have been declared
and entered. A valid Application is required to be supported by complete evidence as detailed in paragraphs
(i)(1)(i)–(vi) and (i)(2) of this section.
Except as further provided in this paragraph, the deadline for receipt of an
Application and supporting evidence is
90 calendar days from the date that the
vessel first arrived in the United States
following foreign operations. The provisions for extension of the period for
filing required evidence in support of
an entry, as set forth in paragraph (f)
of this section, are applicable to extension of the time period for filing Applications for Relief as well. Applications
must be addressed and submitted by
the vessel operator to the appropriate
VRU port of entry and will be decided
in that unit. The VRUs may seek the
advice of the Entry Procedures and
Carriers Branch in Customs Headquarters with regard to any specific
item or issue which has not been addressed by clear precedent. If no Application is filed or if a submission which
does not meet the minimal standards
of an Application for Relief is received,
the duty amount will be determined
without regard to any potential claims
for relief from duty (see paragraph (h)
of this section). Each Application for
Relief must include copies of:
(i) Itemized bills, receipts, and invoices for items shown in paragraph (e)
of this section. The cost of items for
which a request for relief is made must
be segregated from the cost of the
other items listed in the vessel repair
entry;
(ii) Photocopies of relevant parts of
vessel logs, as well as of any classification society reports which detail damage and remedies;
(iii) A certification by the senior officer with personal knowledge of all relevant circumstances relating to casualty damage (time, place, cause, and
nature of damage);
(iv) A certification by the senior officer with personal knowledge of all relevant circumstances relating to foreign
repair expenditures (time, place, and
nature of purchases and work performed);
(v) A certification by the master that
casualty-related
expenditures
were

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§ 4.15

19 CFR Ch. I (4–1–02 Edition)

necessary to ensure the safety and seaworthiness of the vessel in reaching its
United States port of destination; and
(vi) Any permits or other documents
filed with or issued by any United
States Government agency other than
Customs regarding the operation of the
vessel that are relevant to the request
for relief.
(2) Additional evidence. In addition,
copies of any other evidence and documents the applicant may wish to provide as evidentiary support may be
submitted. Elements of applications
which are not supported by required
evidentiary elements will be considered
fully dutiable. All documents submitted must be certified by the master,
owner, or authorized corporate officer
to be originals or copies of originals,
and if in a foreign language, they must
be accompanied by an English translation, certified by the translator to be
accurate. Upon receipt of an Application for Relief by the VRU within the
prescribed time limits, a determination
of duties owed will be made. After a decision is made on an Application for
Relief by a VRU, the applicant will be
notified of the right to protest any adverse decision.
(3) Administrative protest. Following
the determination of duty owing on a
vessel repair entry, a protest may be
filed under 19 U.S.C. 1514(a)(2) as the
only and final administrative appeal.
The procedures and time limits applicable to protests filed in connection
with vessel repair entries are the same
as those provided in part 174 of this
chapter. In particular, the applicable
protest period will begin on the date of
the issuance of the decision giving rise
to the protest as reflected on the relevant correspondence from the appropriate VRU.
(j) Penalties—(1) Failure to report,
enter, or pay duty. It is a violation of
the vessel repair statute if the owner
or master of a vessel subject to this
section willfully or knowingly neglects
or fails to report, make entry, and pay
duties as required; makes any false
statements regarding purchases or repairs described in this section without
reasonable cause to believe the truth of
the statements; or aids or procures any
false statements regarding any material matter without reasonable cause

to believe the truth of the statement.
If a violation occurs, the vessel, its
tackle, apparel, and furniture, or a
monetary amount up to their value as
determined by Customs, is subject to
seizure and forfeiture and is recoverable from the owner (see § 162.72 of this
chapter).
(2) False declaration. If any person required to file a vessel repair declaration or entry under this section, knowingly and willfully falsifies, conceals or
covers up by any trick, scheme, or device a material fact, or makes any materially false, fictitious or fraudulent
statement or representation, or makes
or uses any false writing or document
knowing the same to contain any materially false, fictitious or fraudulent
statement, that person will be subject
to the criminal penalties provided for
in 18 U.S.C. 1001.
[66 FR 16397, Mar. 26, 2001]

§ 4.15 Fishing vessels touching and
trading at foreign places.
(a) Before any vessel documented
with a fishery license endorsement
shall touch and trade at a foreign port
or place, the master shall obtain from
the port director a permit on Customs
Form 1379 to touch and trade.
When a fishing vessel departs from the
United States and there is an intent to
stop at a foreign port (1) to lade vessel
equipment which was preordered, (2) to
purchase and lade vessel equipment, or
(3) to purchase and lade vessel equipment to replace existing vessel equipment, the master of the vessel must either clear for that foreign port or obtain a permit to touch and trade,
whether or not the vessel will engage
in fishing on that voyage.28 Purchases
of such equipment, whether intended at
the time of departure or not, are subject to declaration, entry, and payment
of duty pursuant to section 466 of the
Tariff Act of 1930, as amended (19
U.S.C. 1466). The duty may be remitted
if it is established that the purchases
28 If such a vessel puts into a foreign port
or place and only obtains bunkers, stores, or
supplies suitable for a fishing voyage, it is
not considered to have touched and traded
there. Fish nets and netting are considered
vessel equipment and not vessel supplies.
29–61 [Reserved]

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